Released January 14, 2022 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--For the better part of two decades in the middle of the 20th century, General Electric Company (NYSE:GE) (Boston, Massachusetts) had a very successful slogan: "Progress is our most important product." In his annual "State of American Energy" (SOAE) speech on January 12, Mike Sommers, president and chief executive at the American Petroleum Institute (API) (Washington, D.C.), borrowed heavily from GE's brand legacy, invoking the word "progress" 10 times. In the 28-page report that accompanied Sommers' keynote, the word "progress" was used 43 times.
That slogan worked for GE at the time. And it may work again. The industry API represents, oil and gas, indeed lies near the heart of the American economy. Beyond fueling vehicles, heating homes and acting as a feedstock for the production of petrochemicals, oil and gas finds its way into laptops, cosmetics, cell phones, and millions of other consumer and industrial products.
"Here's one thing we know for sure," Sommers said January 12. "The path to American prosperity, security and progress must include American natural gas and oil."
He continued: "API members have taken the U.S. from chronic dependence on foreign energy to a net exporter of energy for the first time in nearly seven decades -- and, in the process, made America stronger and safer. We've narrowed the trade deficit. We've revived entire communities and regional economies. We've given the world cleaner fuels. We offer practical climate solutions to policymakers on both sides of the aisle, and the natural gas we produce has made America the world's leader in reducing carbon dioxide emissions."
"When a country becomes the leading producer of oil and natural gas, and has reduced carbon dioxide emissions from electricity generation by 40% in 15 years, it is clearly doing many things right," Sommers said.
Favorable geology would mean nothing without the engineering know-how to extract oil and gas from those rocks. But similarly, all the engineering know-how in the world would be of little use if a country lacked huge deposits of oil and gas. Sommers praised the "engineers, entrepreneurs, skilled craft workers and problem-solvers" who have made the U.S. a world leader in oil and gas production, but he did overlook America's good geologic fortune.
Faced with a Democratic president committed to decarbonization, a narrowly divided Congress that, on occasion, has found a way to support those aspirations, and an investment community focused on environmental, social and governance (ESG) measures, Sommers has good reason to be concerned, even defensive. Compared to his full-throated embrace of then-President Donald Trump's goal of "energy dominance," the tone of Sommers' 2022 SOAE address is more cautious and circumspect: Let's not mess up a good thing with too much regulation.
"Our nation has the resources and expertise it takes to meet our energy needs, support millions of jobs, continue to address the risks of climate change, and keep America free from the dangers of dependence on unreliable foreign sources," Sommers said. "Even so, we begin 2022 with Americans viewing energy and its costs as major concerns. This is in part because lately, we've seen policies aimed at restricting production and delivery of U.S. natural gas and oil."
He cited the cancellation of the Keystone XL import permit and lengthy litigation that has delayed, even terminated, other pipeline projects. He did not mention, though it is doubtless among one of his concerns, the interest a majority of commissioners at the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) have in factoring a proposed energy project's greenhouse gas emissions into its permitting decisions. A Democratic majority on that agency is not something that sits easily with the Republican-leaning oil and gas industry. For more on that, see November 30, 2021, article - Back at Full Strength, FERC Faces a Full Regulatory Docket.
But the API chief did criticize the temporary halt to energy leasing on federal lands, and proposals in Congress to increase taxes on natural gas and enact more restrictions on U.S. energy development.
"These decisions exacerbate Americans' concerns and put upward pressure on their energy prices," he said. "Lawmakers should avoid such policies, which don't put America on a path to progress -- nor help us meet basic energy needs.
Sommers said the API "reject(s) efforts to scale back domestic energy development, and prevent new infrastructure to deliver energy to families and industries. ... As a country, do we really want to stay on the path of restricting production, denying permits, closing off access and returning to the days of dependence on foreign sources? This is short-sighted energy policy and we must consider those it's impacting."
Even as alternate energy sources like wind and solar increase their share of the electric fuel market, Sommers noted they are intermittent. Until battery energy storage technology matures and scales, natural gas will be needed as a backup.
In his SOAE address, Sommers said, "We share with global leaders the goal and urgency of reduced (carbon dioxide) emissions across the broader economy and, specifically, those from energy production, transportation and use by society. Our industry brings the scale and expertise to make a lower-carbon future a reality. This is about addition, not subtraction. America needs all the reliable, affordable, lower-carbon energy we can get. And we're working to bring carbon capture to commercial scale so that America can more quickly achieve its emissions reductions targets -- this industry is making it happen."
The API's embrace of carbon capture and sequestration (CCS) comes just three weeks after as the General Accountability Office (GAO) issued a scathing report on the Department of Energy's funding decisions for CCS demonstration projects at coal-fired power plants, though it found little to criticize in CCS projects installed at industrial facilities. For more on that, see January 6, 2022, article - GAO Report Slams Energy Department on CCS Grants at Coal-Fired Power Plants. Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas), one of API's largest members, is one of several oil and gas companies that is investing heavily in CCS. For more on that, see December 2, 2021, article - ExxonMobil Ups Decarbonization, Capital Discipline Commitments Amid Fresh Concerns. Also see January 13, 2022, article - U.S. Ready for Offshore CCS if Policies are Right, Industry Says.
"One of America's strengths is how it has repeatedly shown the way in technology and environmental progress," Sommers said. "Time and again, we've illustrated that some major breakthroughs come not by forced regulations and mandates, but through innovation and technology."
He called on President Joe Biden, Congress and lawmakers in all 50 states to work together with oil and gas companies to implement policies that address the challenge of climate change. "Through public-private partnerships, incorporating innovation, and lending scale and expertise of our industry and others, together we can meet the goals of a lower-carbon future."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
That slogan worked for GE at the time. And it may work again. The industry API represents, oil and gas, indeed lies near the heart of the American economy. Beyond fueling vehicles, heating homes and acting as a feedstock for the production of petrochemicals, oil and gas finds its way into laptops, cosmetics, cell phones, and millions of other consumer and industrial products.
"Here's one thing we know for sure," Sommers said January 12. "The path to American prosperity, security and progress must include American natural gas and oil."
He continued: "API members have taken the U.S. from chronic dependence on foreign energy to a net exporter of energy for the first time in nearly seven decades -- and, in the process, made America stronger and safer. We've narrowed the trade deficit. We've revived entire communities and regional economies. We've given the world cleaner fuels. We offer practical climate solutions to policymakers on both sides of the aisle, and the natural gas we produce has made America the world's leader in reducing carbon dioxide emissions."
"When a country becomes the leading producer of oil and natural gas, and has reduced carbon dioxide emissions from electricity generation by 40% in 15 years, it is clearly doing many things right," Sommers said.
Favorable geology would mean nothing without the engineering know-how to extract oil and gas from those rocks. But similarly, all the engineering know-how in the world would be of little use if a country lacked huge deposits of oil and gas. Sommers praised the "engineers, entrepreneurs, skilled craft workers and problem-solvers" who have made the U.S. a world leader in oil and gas production, but he did overlook America's good geologic fortune.
Faced with a Democratic president committed to decarbonization, a narrowly divided Congress that, on occasion, has found a way to support those aspirations, and an investment community focused on environmental, social and governance (ESG) measures, Sommers has good reason to be concerned, even defensive. Compared to his full-throated embrace of then-President Donald Trump's goal of "energy dominance," the tone of Sommers' 2022 SOAE address is more cautious and circumspect: Let's not mess up a good thing with too much regulation.
"Our nation has the resources and expertise it takes to meet our energy needs, support millions of jobs, continue to address the risks of climate change, and keep America free from the dangers of dependence on unreliable foreign sources," Sommers said. "Even so, we begin 2022 with Americans viewing energy and its costs as major concerns. This is in part because lately, we've seen policies aimed at restricting production and delivery of U.S. natural gas and oil."
He cited the cancellation of the Keystone XL import permit and lengthy litigation that has delayed, even terminated, other pipeline projects. He did not mention, though it is doubtless among one of his concerns, the interest a majority of commissioners at the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) have in factoring a proposed energy project's greenhouse gas emissions into its permitting decisions. A Democratic majority on that agency is not something that sits easily with the Republican-leaning oil and gas industry. For more on that, see November 30, 2021, article - Back at Full Strength, FERC Faces a Full Regulatory Docket.
But the API chief did criticize the temporary halt to energy leasing on federal lands, and proposals in Congress to increase taxes on natural gas and enact more restrictions on U.S. energy development.
"These decisions exacerbate Americans' concerns and put upward pressure on their energy prices," he said. "Lawmakers should avoid such policies, which don't put America on a path to progress -- nor help us meet basic energy needs.
Sommers said the API "reject(s) efforts to scale back domestic energy development, and prevent new infrastructure to deliver energy to families and industries. ... As a country, do we really want to stay on the path of restricting production, denying permits, closing off access and returning to the days of dependence on foreign sources? This is short-sighted energy policy and we must consider those it's impacting."
Even as alternate energy sources like wind and solar increase their share of the electric fuel market, Sommers noted they are intermittent. Until battery energy storage technology matures and scales, natural gas will be needed as a backup.
In his SOAE address, Sommers said, "We share with global leaders the goal and urgency of reduced (carbon dioxide) emissions across the broader economy and, specifically, those from energy production, transportation and use by society. Our industry brings the scale and expertise to make a lower-carbon future a reality. This is about addition, not subtraction. America needs all the reliable, affordable, lower-carbon energy we can get. And we're working to bring carbon capture to commercial scale so that America can more quickly achieve its emissions reductions targets -- this industry is making it happen."
The API's embrace of carbon capture and sequestration (CCS) comes just three weeks after as the General Accountability Office (GAO) issued a scathing report on the Department of Energy's funding decisions for CCS demonstration projects at coal-fired power plants, though it found little to criticize in CCS projects installed at industrial facilities. For more on that, see January 6, 2022, article - GAO Report Slams Energy Department on CCS Grants at Coal-Fired Power Plants. Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas), one of API's largest members, is one of several oil and gas companies that is investing heavily in CCS. For more on that, see December 2, 2021, article - ExxonMobil Ups Decarbonization, Capital Discipline Commitments Amid Fresh Concerns. Also see January 13, 2022, article - U.S. Ready for Offshore CCS if Policies are Right, Industry Says.
"One of America's strengths is how it has repeatedly shown the way in technology and environmental progress," Sommers said. "Time and again, we've illustrated that some major breakthroughs come not by forced regulations and mandates, but through innovation and technology."
He called on President Joe Biden, Congress and lawmakers in all 50 states to work together with oil and gas companies to implement policies that address the challenge of climate change. "Through public-private partnerships, incorporating innovation, and lending scale and expertise of our industry and others, together we can meet the goals of a lower-carbon future."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
