Hands Off, Oil Industry Warns Government
As long as Congress and the Obama administration don’t mess it up, he warned.
In a broad-gauge speech in Washington on the state of the American oil and gas industry, Mr. Gerard said that because of new petroleum finds and new drilling techniques – chiefly directional drilling and hydraulic fracturing in shale formations – the United States could become the world’s leading energy producer.
“North America could become self-sufficient in liquid fuels in roughly 12 years,” Mr. Gerard said, citing figures from the International Energy Agency. “And as a potential energy exporter, we can help bring greater stability to the geopolitics of energy, to say nothing of the positive impacts increased U.S. supply would have for U.S. businesses, workers and consumers.”
But he cautioned that this rosy future was dependent on the federal government’s not interfering with his industry, by, say, raising taxes on oil companies, or imposing new environmental regulations on fracking operations, or limiting greenhouse gas emissions from refineries.
“The most important thing is to do no harm,” Mr. Gerard said in a question-and-answer period after his speech. “Don’t overreact and do anything that would impede or discourage what we see going forward state by state today.”
He said that North Dakota, Texas and Pennsylvania had seen a huge boom in job creation and economic activity tied to drilling operations on private lands in recent years, while exploration on federal lands and waters has been stagnant or falling. He attributed the discrepancy to more business-friendly regulatory and tax policies at the state level, and he encouraged Congress and federal regulators to follow the lead of officials in state capitals.
He urged the Obama administration to open more federal land and water to drilling, but said that this did not have to include national parks and environmentally sensitive areas.
Mr. Gerard bristled at a suggestion that major oil companies benefit from billions of dollars in tax subsidies, saying that the Obama administration’s assertion that the industry enjoys $4 billion in unnecessary tax breaks is a “myth.”
“The oil and gas industry gets no subsidies, zero, nothing,” he said. “We get cost-recovery benefits, much like other industries. You can go down the road of allowing economic activity, generating hundreds of billions to the government, or you can take the alternative route by trying to extract new revenue from industry by increasing their cost to do business.”
He added, “We not only pay our fair share, we pay more than our fair share.”