Pro-energy policies could have significant economic impact

By The Bakken Magazine Staff | August 14, 2015

A recent study on U.S. energy policy shows that over the next 20 years, pro-development oil and gas policies could create 2.3 million jobs, add $443 billion to the economy, increase tax revenue by $1.1 trillion and save the average household $360 a year in energy expenses.

The study—conducted by Houston-based Wood Mackenzie for the American Petroleum Institute (API)—also warns that proposed regulatory policies could have the opposite effect—reducing jobs, tax revenues and economic activity while raising energy costs and making the U.S. more dependent on foreign energy sources.

Wood Mackenzie analyzed the likely economic outcomes of U.S. energy policies that either remain relatively unchanged, become more constraining or become more favorable toward oil and gas development. Policies considered were offshore drilling, increased federal permits, approval of Canadian pipelines, repeal of the crude export ban and market-level exports for LNG and condensates.

With energy policies that put more constraints on oil and gas development, the firm projected that over the next 10 years, U.S. oil production would fall by 2.8 million barrels per day, 800,000 jobs would be lost, tax revenues would fall by $33 billion and average energy costs per household would increase $255 per year.

“The study contrasts the tremendous difference between the benefits from pro-energy policies and the negative effects of policy decisions that are anti-energy,” API president and CEO Jack Gerard said. “Energy is fundamental to our society, and thanks to American innovation and entrepreneurial spirit, our nation stands among the world’s leaders in energy production. America will remain a global energy leader only if we get our nation’s energy policy right today.”

Karen Kerrigan, president and CEO Small Business & Entrepreneurship Council, and Paula Jackson, president and CEO, American Association of Blacks in Energy, each joined Gerard earlier this year to speak on a panel regarding pro-energy policies.

According to Kerrigan, business failures in the U.S. currently outpace business startups. She said small businesses will be significantly impacted either positively or negatively depending on the direction of national energy policies and cost of energy.

“Low energy prices have been a lifeline given the challenging economic climate,” Kerrigan added.

Jackson said that when it comes to energy policies beneficial to minorities and people at all economic levels, her organization supports an “all of the above” approach which includes a diverse portfolio of energy options. She gets exasperated with those who claim that one energy source can simply be replaced by another.

Jackson stressed that the key to getting people to make more informed choices on energy policy and voting for candidates who support energy development is communications and education. She said that many people get “sucked into the media narrative” and Washington, D.C, politics, but tend to make better choices when they know the full story.

“We should not have to choose between energy and the environment,” Jackson said. “It’s my great frustration that we have to choose one or the other.”