LITTLE ROCK — Domestic oil and gas production can fuel economic recovery if government regulation doesn’t stand in the way, the president and chief executive of the American Petroleum Institute said Friday in Little Rock.
The government should encourage more domestic fuel production by further opening public lands to more oil exploration and streamlining the regulatory process, said the American Petroleum Institute’s Jack Gerard, speaking at the University of Arkansas Clinton School of Public Service.
The institute is a Washington, D.C.-based trade association that represents the oil and natural-gas industry.
Given the likelihood of rising demand for oil and natural gas in the foreseeable future, even as use of alternative-energy sources rises, there are two choices, Gerard said.
“We can encourage more production of our own supplies ... putting Americans back to work and delivering substantial revenue to our government. Or the alternative, choice No. 2, we can accept policies that discourage development here at home, forcing us to import even more.”
Gerard cited figures froma 2008 report from ICF International, a consulting firm, which found that full development of federal onshore and offshore lands could lead to creation of as many as 160,000 jobs by 2030, and increase oil production by about 2 million barrels a day.
ICF International works with government and commercial clients to “deliver professional services and technology solutions in the energy and climate change; environment and infrastructure; health, human services, and social programs; and homeland security and defense markets,” according to its website.
In Arkansas, he noted, the Fayetteville Shale formation in the north-central part of the state has boosted jobs and tax revenue through natural-gas production.
And development of domestic oil and gas resources does not exclude focusing on alternative fuels, Gerard said. Traditional big oil companies have made significant investments in alternative energy projects - Gerard pointed to Exxon Mobil’s $600 million investment in algae technology as an example.
But, Gerard said, constantly changing government regulations can “chill” investment and the development of technology. He pointed to the Environmental Protection Agency’s decision to regulate greenhouse gases as well asuncertainty about drilling on some federal lands as policies that are difficult to navigate.
EPA Administrator Lisa Jackson said last spring that the regulation of greenhousegases is a necessary measure, and one that will help build a more ‘green’ economy, “There is no denying our responsibility to protect the planet for our children and grandchildren. It’s long past time we unleashed our American ingenuity and started building the efficient, prosperous clean-energy economy of the future.”
While changes in safety regulations in the Gulf of Mexico are important in the wake of the Deepwater Horizon spill last spring, Gerard said,uncertainty about enforcement of new rules could effectively stop drilling there.
“We’re concerned ... we could get to a point where governmenthasn’t provided enough certainty for us to apply for and get a permit, and therefore we’re left in no-man’s land, where we’re not quite sure what the rules of the game are, we’re not quite sure what’s required of us, and therefore nothing happens,” Gerard said in an interview after his speech.
“Harmonization” between industry and government is important to foster the kinds of new technologies that will allow the private sector to explore new resources and to make strides in addressing environmental issues, Gerard said.
Just as horizontal drilling and hydraulic fracturing, as in the Fayetteville Shale, have allowed the exploration of gas to be more profitable than many would have predicted a decade ago, further innovations will allow extraction of more resources.
Business, Pages 33 on 10/23/2010