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SOAE Summary

SOAE Summary

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Published by: editorial.online on Jan 04, 2011
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Te State o American Energy 
 
 
The State of American Energy:
 A Summary
Energy’s Role inEconomic Growth,Job Creationand Providingfor the Future
Our energy uture depends on theability o America’s energy companiesto saely and reliably provide the oiland natural gas the United Statesneeds to grow the economy, create jobs and enhance energy security.It is time or a new ocus on energy policy, and we remain committedto working with all policymakers toidentiy solutions that will advanceour country’s economic interests andsustain our way o lie.
Safely Providing America’s Energy
Te U.S. oil and natural gasindustry has always had a strongsaety perormance record, and wecontinue to improve upon it.Following the Gul oil spill, ourindustry demonstrated its commit-ment to ensuring the saety o ouroperations. Our response to the spillin ships, materials and manpower was unprecedented. We createdindustry-wide task orces to identiy and learn rom any gaps in operationsor practices. Recommendationsrom these task orces have already helped improve the industry’ssaety perormance. Across our industry—rom explorationand production to distribution andrening—we develop and constantly improve best practices or sae opera-tions, including training, operationalprocedures, equipment improvements,industry standards and technology—allowing access to new energy resources while enhancing saety, eciency andenvironmental protection.
The Oil and NaturalGas Industry, anEconomic Enginefor Our Nation
Te oil and natural gas industry’simpact on the U.S. economy issignicant, supporting more than
$1 trillion
to the economy annually and
9.2 million
U.S. jobs.
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Developingmore o America’s oil and naturalgas resources will help meet growingdemand, create hundreds o thousandso jobs, provide revenue to ederal andstate governments, and enhance ournation’s energy security.
Economic growth opportunitiesassociated with oil and natural gasdevelopment are signicant. A new study rom Wood Mackenzie showsthe greater potential or highergovernment revenue rom increased energy production compared tohigher taxes on energy companies:
4
Te study ound that rom2011 to 2025, negative economicconsequences o higher taxes will, in the long run, more thanofset any short-term tax revenuegains. Under higher taxation,revenues are estimated to decreaseby 
$128 billion
,
 
but increasedaccess could generate an estimated
$149 billion
in additionalgovernment revenue.
4
More importantly, as millions o  Americans struggle to nd work,in 2025
more than 400,000
additional jobs are possible
 
in theincreased access scenario. Te highertax scenario could result in job loss—estimated at almost
170,000
in thepeak job loss year o 2014.
1
 
Bettina J.
Environmental, Health and Safety Technician 
 
One of 9.2 million Americans whose jobs aresupported by the oil and natural gas industry.
 
2
Te State o American Energy 
 
Tousands o U.S.
businesseslarge and small depend 
on oil andnatural gas operations. Te industry supports businesses well outside theGul region—vendors that providevital support and services to Gul operations are located as ar away as Pennsylvania and Illinois.
Creating Good Jobs
Te oil and natural gas industry supports more than
9.2 million
U.S. jobs, including
2.1 million
 direct jobs and
7.1 million
indirect jobs rom the purchase o goodsand services.
In 2008 and 2009, industry salariesin the exploration and productionsectors were
more than double
thenational average or all U.S. jobs.
Te number o direct oil andnatural gas industry employeesis larger than the populationso 
15 states.
6
Allowing oil and natural gascompanies to access domesticresources currently of-limitscould create
hundreds o thousands o new jobs
inthe uture.
with the right publicpolicies and partnershipbetween industry andpolicymakers, we canenhance our economic,environmental andenergy security
 API and its member companiesare committed to working withpolicymakers to pursue a thoughtul,commonsense energy agenda—one that promotes U.S. economicgrowth, job creation and sae, reliable,afordable energy or the uture.
What the Industry is Doing
In addition to the development andimprovement o saety standards andoperations, the oil and natural gasindustry is at the oreront o:
Developing
advanced energy technologies
, putting us on thecutting edge o exploring or, ndingand producing energy resources;
Increasing
energy eciency 
; and
 
Diversiying energy resources
,
 
drawing upon a ull range o energy sources, includingalternatives and renewables.Industry investments in technologiessuch as cogeneration and carboncapture and storage (CCS), have reducedgreenhouse gas (GHG) emissions by more than
48 million metric tons
o carbon dioxide equivalent rom 2007to 2008, a reduction comparable totaking
9.7 million cars
of the roads.
7
 Te industry is also researching,developing and marketing alternativeand renewable sources o energy,including solar, geothermal, biouels,uel cells, hydrogen power and wind energy.
Growing the Economyby Developing America’sEnergy Resources
Oil and natural gas companiespaid
$1 trillion
2
in total incometaxes rom 1980 through 2008and more than
$178 billion
3
tothe government in rent, royalty and bonus payments rom 1982through 2009.
Te oil and natural gas industry provides the U.S. reasury,on average, with well over
$20 million
each day.
4
 Allowing companies to accessoil and natural gas resourcescurrently of-limits could generatean additional
$1.7 trillion
5
 in government revenue.
Industry taxes, royalties, rentalpayments and other developmentees
und community needs
,including roads, schools and parks.
 
Millions o Americans benet 
 rom the industry’s strong economicperormance as shareholders in thesecompanies through pension plans,mutual unds, IRAs and 401k plans.
Who Owns “Big Oil?”(Holdings of Oil Stocks, 2007)
Source: SONECON,
“The Distribution of Ownership of U.S. Oil and Natural Gas Companies,” 
September 2007.
 
3
 
Develop America’sEnergy Resources
Developing North America’s vast oil and natural gas resources, bothofshore and onshore, will helpmeet growing energy demand, createhundreds o thousands o new U.S. jobs, provide billions in criticalrevenue to ederal, state and localgovernments, and enhance ourenergy security. With this in mind,policymakers should:
Re-examine and reconsider limitingofshore exploration and productionin the eastern Gul o Mexico and inthe Atlantic and Pacic.
Continue plans or on- and ofshore Alaska development, which willgenerate thousands o jobs through-out the country—rom pipelinemanuacturers in the Midwestand computer technicians on thecoast to labor union workers orconstruction and maintenance.
Expeditiously process and approvedrilling plans and permits orpending and uture lease areas.
Support the onshore developmento natural gas, including shale gas,and rerain rom imposing unnec-essary new regulations or taxes onnatural gas operations.
Promote policies and a regulatory environment that will support thegrowth and ree trade o Canadianoil sands, a reliable, sae and readily available energy source, includingthe approval o key pipeline projectsthat will help create jobs in both theUnited States and Canada.
 Avoid PunitiveNew Energy Taxes
 With policies that create and sustain a level playing eld orall energy options, the oil and natural gas industry will createnew jobs and help uel the nation’seconomy. Conversely, adding billions o dollars in new and punitive taxes on our industry  will have a devastating impact on American jobs and economicgrowth. With this in mind,policymakers should:
 Advance policies that encouragecompany investment—creating jobs and making U.S. companiesmore competitive.
Resist eforts to impose punitivenew taxes or costly and unnecessary regulations on American energy companies that would kill jobs,slow or reverse economic growthand harm American businesses andconsumers alike.
Enact Smart EnergyPolicy Based on SoundEconomic Principles
Burdensome and unnecessary EPA regulations could erode industry environmental and eciency gainsand have unintended consequencesor the U.S. economy. Our nationneeds policies that provide or energy exploration, energy production and environmental protection. With thisin mind, policymakers should:
Prevent the unintended consequenceso EPA proposals. EPA’s mission canand should be met through scienti-cally sound, cost-efective measuresthat allow or continued economicgrowth and job creation.
 Allow Congress to commit to athoughtul and balanced approachto climate change that involves allstakeholders, rather than continueEPA eforts to regulate GHGemissions under the Clean Air Act. 
What Policymakers Should Do
IndustryEmploymentLabor Income( $ millions) Value Added( $ millions)
Direct Impact of the Oil and Natural Gas Industry2,123,291199,344456,971Indirect
 
and Induced Impacts on Other Industries7,114,090358,916580,089Services3,399,474149,462181,720Wholesale and Retail Trade1,174,76249,71180,915Finance, Insurance, Real Estate, Rental and Leasing828,90447,48773,322Manufacturing680,83449,93673,322Transportation and Warehousing276,49213,89218,746Construction220,92311,18513,722Information165,85915,20629,324 Agriculture122,542,2,1935,197Utilities26,2724,30914,652Mining10,8981,0372,068Other207,13014,49916,122Total Impact9,237,381558,2601,037,060
 As a % of U.S. Total5.2%6.3%7.5%
The Economic Impacts of the Oil and Natural GasIndustry on the U.S. Economy in 2007 by Industry
Source: PricewaterhouseCoopers,
“The Economic Impacts of the Oil and Natural Gas Industry on the U.S. Economy,” 
September 2009.

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