Energy, Jobs, and The Economy: Powering America's Future

Energy, Jobs & the Economy: Powering Americas Future
June 2011
Table of Contents
Who is Consumer Energy Alliance? Introduction Executive Summary Trucking Steel Manufacturing Oil & Gas Development Air Transport Electricity Manufacturing The Business of Chemistry Independent Oil & Gas Production Agriculture & Fertilizer Offshore Energy Development Highway Users Nuclear Energy Energy Research & Development Retirees Alternative Energy Development Conclusion Acknowledgements 3 5 6 8 11 13 16 19 21 23 25 28 30 33 35 38 40 43 45 47
ConsumerEnergyAlliance
Who is Consumer Energy Alliance?
ConsumerEnergyAlliance(CEA)isanindependent, nonprofit,nonpartisanorganizationwhosemissionisto expandthedialoguebetweentheenergyandconsuming sectorsandtoadvanceabetterunderstandingofenergy security.CEAadvocatesforthethoughtfuldevelopmentand utilizationofenergyresourcesinordertohelpcreatea
balancedenergypolicyandmaintainstablepricesfor consumers.CEAhas161affiliatedmembersfromairlines totruckingtomanufacturingtoenergyproducersand nearly300,000individualconsumeradvocates.CEA appreciatesthesupportitreceivesfromitsaffiliate membersandisproudtorepresentthem.
CONSUMERS/BUSINESS/AGRICULTURE/INDUSTRY/ENDUSERS
AgricultureEnergyAlliance AirConditioningContractorsofAmerica AirTransportAssociation AlternativeEnergyBuilders AmericanBusAssociation AmericanChemistryCouncil AmericanForest&PaperAssociation AmericanHighwayUsersAlliance AmericanIron&SteelInstitute AmericanTruckingAssociations Amway AndersonColumbiaCo.,Inc AppliedFiberManufacturing,LLC. ArrMazCustomChemicals AssociatedIndustriesofFlorida AssociationofCorporateTravelExecutives BayerCorporation BeneficiationTechnologies BetterRoadsInc. BodGraduateSchoolofEnergyManagement(Norway) BritishAmericanBusinessCouncil BugWare,Inc. CanadianAmericanBusinessCouncil CaterpillarGlobalPetroleumGroup CFIndustries ChamberShippingofAmerica ColoradoFarmBureau CulbrethFinancialGroup DecisionStrategies DHL(DeutschePostWorldNetUSA) Dow DynamotiveUSA,Inc. TheEarthQuestInstitute EnergyPeopleConnect Ernst&Young TheFertilizerInstitute FloridaChamberofCommerce FloridaFamilyAssociation,Inc. FloridaFertilizerandAgrichemicalAssociation FloridaMineralsandChemistryCouncil FloridaRestaurantandLodgingAssociation FloridaTaxpayersUnion FloridaTransportationBuildersAssociation GCIIndustrialTelecomGroup GreaterHoustonPartnership GroceryManufacturersAssociation GulfCountyEconomicDevelopmentCouncil TheHispanicLeadershipFund HoustonRestaurantAssociation HoustonTechnologyCenter IllinoisChamberofCommerce InternationalFoodserviceDistributorsAssociation InternationalWindowFilmAssociation IowaAssociationofBusiness&Industry IowaMotorTruckAssociation J.B.CoxwellContracting,Inc. ManufacturersAssociationofFlorida McDonaldConstructionCompany Mosaic MowellFinancialGroup,Inc. NationalAssociationofConvenienceStores NationalAssociationofHomeBuilders
NationalAssociationofManufacturers NationalAssociationofNeighborhoods NationalAssociationofTruckStopOperators NationalEnergyEducationDevelopmentProject NationalSmallBusinessAssociation NebraskaChamberofCommerce NucorSteel OnDeckSeafood PCSPhosphate ThePeace&ProsperityProject PlumbingHeatingCoolingContractorsNational Association PortstoPlainsTradeCorridorCoalition ResearchPartnershiptoSecureEnergyforAmerica ResourceDevelopmentCouncil RingPowerCorporation RivereSeafoods RobinsonFans
SantaBarbaraCountyEnergyCoalition Science&EngineeringFairofHouston 60PlusAssociation SouthCarolinaChamberofCommerce SouthCarolinaTruckingAssociations SoutheasternFisheries SteelManufacturersAssociation TexasProsperityProject TownsendMarine U.S.ChamberofCommerce UnionContractorsandSubcontractorsAssociation,Inc. UnitedMotorcoachAssociation UniversityofTexas,CenterforEnergyEconomics VirginiaManufacturersAssociation W.W.GayMechanicalContractor,Inc. WardPackagingandAssociates WisconsinManufacturersandCommerce
ENERGYPROVIDERSANDSUPPLIERS
AlyeskaPipelineServiceCompany AmericanAssociationofPetroleumGeologists AmericanExploration&ProductionCouncil AmericanGasAssociation AmericanPetroleumInstitute AmericanPublicGasAssociation AmericanPublicPowerAssociation ApacheCorporation AssociationofOilPipeLines BarneysPumps,Inc. BP CCCGroup,Inc. TheCenterforNorthAmericanEnergySecurity Chevron Choice!Energy Comanco DeltaAmericanFuels DevonEnergyCorporation ElPasoEnergyCorporation EnvironmentallyConsciousConsumersforOilShale EnvironmentallyFriendlyDrillingProject ExelonCorporation ExxonMobil FloridaHandlingSystems FloridaPetroleumCouncil ForesightWind GasTechnologyInstitute GreenEarthFuels GreenlineIndustries GulfCoastCleanEnergyApplicationCenter Halliburton HDSupply HessCorporation 4
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HoustonBioDiesel HoustonCleanEnergyPark HoustonRenewableEnergyNetwork HT/DcREngineering,Inc. IndependentPetroleumAssociationofAmerica InterstateOil&GasCompactCommission LakeridgeEnergyCorporation MarathonCorporation MaterialTransferIndustries,LLC MetalTreatingInstitute Moretrench MSIndustrialCorporation NationalAlgaeAssociation NationalOceanIndustriesAssociation NationalPetrochemicalandRefinersAssociation NaturalGasSupplyAssociation NewEnglandFuelInstitute NuclearEnergyForTexans NuclearEnergyInstitute OceanEnergyInstitute OffshoreEnergyCenter Peabody Petrohawk Sasol ShellOil SmithBrothersOil SocietyforMining,Metallurgy&Exploration Statoil TampaTanks,Inc. TexasAllianceofEnergyProducers TransPacificOilCorporation U.S.Oil&GasAssociation
Introduction
TheUnitedStateseconomyisindirestraits:Ournational debtisover$14trillionandgrowing;thenational unemploymentrateis9.1percentandhasbeenstuckabove 8percentfortwoyears;andtheincreasingcostofenergy threatenstomaketheseproblemsevenworse. Toputthisintogreaterperspective,therecentsurgeofoil, gasoline,dieselandjetfuelpriceshavehitthepocketbooks ofmillionsofAmericanswhoareoutofworkorhavefallen onhardtimes.Meanwhile,manysectorsthatfuelour economyrangingfromagriculture,manufacturing, transportation,steel,construction,leisureandhospitality, andenergycontinuetostruggletomeetpayroll obligationsandmakeendsmeet.Onerousregulations, endlesslayersofredtape,restrictedaccesstocritical suppliesofdomesticenergy,andalackofdirectionfrom governmentareonlyafewofthemanyexamplesofartificial barriersthatparalyzebusinessandmakeitdifficultfor Americatogrowandprosper. WhilethereisnosilverbulletforAmericaseconomicwoes, itisclearthatwemustembraceprogrowthpolicies poweredbyaffordabledomesticenergysourcesincluding wind,solar,oil,naturalgas,biofuelsandnuclear.Anational energypolicythatrightfullyencouragestheresponsible productionofeveryformofdomesticenergyisawinfor America.Afterall,thereisnoquickerpathtoeconomic resurgencethanthroughproperdevelopmentofour abundantnaturalresourcesandtheeconomicgrowththat theycreate.
Energy,Jobs&theEconomy:PoweringAmericasFuture, preparedbyConsumerEnergyAlliance(CEA)andits members,capturesvividlyhowdomesticenergyproduction isvitalformaintainingstablepricesforconsumers,creating muchneededjobs,andgrowingtheeconomy.Thereport showshowrestrictionsonenergydevelopmentcan negativelyaffectnotonlytheenergyindustry,butalsoevery sectoroftheeconomy,frommanufacturingto transportationtoagriculture.Thisreportrevealsthe collectiveconcernsthateachsectoroftheeconomyhas withregardtohighenergycostsandourcontinuedreliance onunstablesourcesofenergy,andalsoprovidesoptionsfor lawmakerstomoveAmericatowardabetterenergyfuture withabalancedandresponsibleenergypolicy. AboutConsumerEnergyAlliance
ConsumerEnergyAllianceisanonprofit,nonpartisan organization,comprisedofmorethan160affiliatemembers, includingenergyconsumersandproducers,andhundredsof thousandsofconsumeradvocates,thatsupportsthethoughtful utilizationofenergyresourcestohelpensureimproved domesticandglobalenergysecurity,stablepricesfor consumersandabalancedenergypolicyforAmerica.
Executive Summary
Asmart,balancedenergypolicyhastheabilitytojumpstart economicgrowthandensurethateverysectorofthe Americaneconomyhasaccesstoaffordable,reliable energy.Asthispublicationdemonstrates,thereareseveral energyrelatedpoliciesandpracticesthatcouldbeadopted tocreatejobs,ensuregreaterenergysecurityandgrowthe economy.Whilemanyofthesepolicieswilltaketimeto createsignificant,lastingimpacts,thefracturedstateofthe U.S.economyshouldcompelpolicymakerstorespond immediatelywithrealisticandeffectivesolutions,solutions thatmustincludeaforwardthinkingplantoexpand domesticenergy. Asthesechapterswillshow,thelackofanationalenergy policyhassevereconsequencesfortheeconomynowand inthefuturecostinghundredsofthousandsofjobsand billionsofdollarsinlostrevenue.Fromoilandnaturalgas developmenttonewnuclearpowerfacilitiesandexisting electricityplants,hurdlestodomesticenergyproduction couldresultinthelossofover500,000existingorpotential jobs.Norareenergyproducerstheonlyoneswhosuffer: Betweenthetruckingandairlineindustriesalone,higher crudeoilpriceswillcostthetransportationsector$51 billionmorein2011thanin2010.Whenyouconsiderthat theUnitedStateshastoimportaroundhalfoftheoilwe consume,thesehighercoststranslatetobillionsofdollars flowingoutoftheAmericaneconomyandintothecoffers offoreignnations.Mostimportantly,asignificantamount ofthesecostswillbepassedalongtoconsumersintheform ofhigherpricesforeverydaygoodsandservices.Inother words,itisconsumerswhoultimatelysufferthemostfrom badenergypolicies. Inthefollowingchapters,adiverserangeofbusinessesand organizationsdiscusshowasmarterenergypolicywillhelp createandsupportmillionsofAmericanjobs,generate billionsofdollarsinrevenueforcashstrappedfederal,state andlocalgovernments,providepricestabilityfor consumersandbolsterournationsenergysecurity.
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Inparticular,thefollowingpageswilldiscusshow: TheU.S.steelindustryconsumed14.6milliontonsof coalandcoke,214billioncubicfeetofnaturalgasand 36.4billionkilowatthoursofelectricityin2009.In ordertoreduceitsenergycosts,theindustryhas lowereditsenergyintensityby30percentsince1990.
Onshoreindependentoilandgasupstreambusinesses contributed$320.6billion(2.2percentofU.S.GDP)in 2010,andthisfigureisprojectedtoriseto$466.7 billion(2.4percentofU.S.GDP)by2020. BasedonthecurrentEnergyInformation Administration(EIA)forecastfor2011,theAmerican TruckingAssociationsprojectsthatthetrucking industrywillspendanastonishing$138.7billiononfuel thisyear,up$37.2billionfrom2010. AccordingtotheNuclearEnergyInstitute,buildinga newnuclearplantintheUnitedStateswouldresultin thecreationof1,400to1,800jobsduringconstruction, withpeakemploymentashighas2,400jobs. Increaseddomesticshalegasproductioncouldleadtoa reinvigoratedmanufacturingbaseintheUnitedStates. A25percentincreaseinethanesupplyanaturalgas liquidderivedfromshalegaswouldgenerate17,000 newjobsintheU.S.chemicalindustry. Since2000,whenenergypricesbegantoclimb,the UnitedStateshaslostmorethan5.5millionhighwage manufacturingjobs. Oilandnaturalgascompaniespaid$1trillionintotal incometaxesfrom1980through2008andmorethan $178billiontothegovernmentinrent,royaltyand bonuspaymentsfrom1982through2009.Theoiland naturalgasindustryprovidestheU.S.Treasury,on average,withwellover$86millioneachday.
Annually,a1centincreaseinthepriceofagallonofjet fuelcostsU.S.airlines$175million.Fromtheendof 2010totheendofApril2011,thepriceofjetfuelrose 84centspergallon. Forseniorcitizens,mostofwhomliveonafixed income,highenergycostscanbedevastating. AccordingtoaMay2011Galluppoll,76percentof seniorssurveyedexpressedfinancialhardshipoverhigh gasolineprices. Fertilizermanufacturersandfarmerswhodependon theirproductwouldbesignificantlyaffectedbyvolatility innaturalgaspricessincenaturalgasaccountsforas muchas90percentofthecostofnitrogenfertilizer. Potentialnewregulationsonelectricalutilitiescould resultintheclosureofasubstantialamountof generatingcapacity.TheAmericanPublicPower AssociationcitesaNorthAmericanElectricReliability Corporationstudythatpredictsfourpotentialrulesby theU.S.EnvironmentalProtectionAgency(EPA)could resultintheclosureof40to76gigawattsofgenerating capacityacrossthecountryby2018. AccordingtotheAmericanAssociationofPetroleum Geologists,thenextgenerationworkforceisinshort supplyinmanyenergysectors,includingoilandnatural gas,coal,andnuclear.Togetherthesesources represent93percentofournationsenergy consumption,andmanyofthosecurrentlyemployedby theseindustriesareeithereligibleforretirementorwill beinthenextfewyears. TheNationalOceanIndustriesAssociationcitesthat theoffshoreenergypotentialoftheUnitedStatesis estimatedat44billionbarrelsofoiland183.2trillion cubicfeetofnaturalgas.Thisenergyisenoughto reduceourimportsbymorethanonethird,whichhas beenastatedgoaloftheObamaAdministration.
Byutilizingstateofthearttechnologytoproduce syntheticfuelsfromnaturalgas,Sasolandother companiescanprovidecleanburningfuelfor consumersaswellasgenerateeconomicbenefitsfor localcommunities.Anaveragegastoliquidsfacilityis expectedtosupport600permanentjobs,inadditionto significantconstructionandindirectjobs. Highwayusersacrossthecountrysufferwhengasoline anddieselpricesrise.Butsomecansuffermorethan others:Ruralresidentsincludingfarmers,ranchersand othersmustlimitthedistancetheycantransport themselvesandthegoodstheyproduce,greatlylimiting theireconomicopportunitiesand,inturn,thosewho dependontheirbusiness.
Asthesechaptersillustrate,onesimple,immediatesolution doesnotexist.Rather,policiesmusttakeintoaccountboth theshorttermandlongtermimplicationsofenergy development,includingaccesstoavastarrayofabundant domesticresources,consumptionandtheirimpacton Americanconsumers.Anythinglessjeopardizesthehealth ofoureconomyandholdsAmericahostagetothewhimsof volatileglobaleventsandforeignsourcesofenergyfrom unfriendlycountries.
Trucking
American Trucking Associations

Thetruckingindustryisthebackboneofthisnations TheEnergyInformation economy,accountingfornearly82percentofthenations Administration(EIA) freightbillwith6.8millionhardworkingAmericansin projectsthatdieselwill truckingrelatedjobs.Fromfoodtogasoline,clothingto average$3.89in2011, medicine,thetruckingindustrydeliversvirtuallyallofthe whichis90centsor30percenthighermorethanoneyear consumergoodsintheUnitedStates.Truckingisan ago. extremelycompetitiveindustrycomprisedlargelyofsmall businesses.Roughly96percentofallinterstatemotor BasedonthecurrentEIA carriersoperate20orfewertrucks. forecastfor2011,ATAprojectsthatthetruckingindustry willspendanastonishing$138.7billiononfuelthisyear,up Dieselfuelisthelifebloodofthetruckingindustry.The $37.2billionfrom2010.Today,itcancostupto$1,200to truckingindustryconsumesmorethan35billiongallonsof completelyrefuelatruck.Asaresultofthisdramatic increaseinthepriceofdiesel,whichhascoincidedwitha dieselfuelannually.Thismeansthataonecentincreasein theaveragepriceofdieselcoststhetruckingindustryan slowlyrecoveringeconomy,manytruckingcompaniesare additional$350millionayearinfuelexpenses. strugglingtosurvive. NationalDieselFuelPrice 4.25 2010 4.00 2011 YTD 3.75 3.50 3.25 3.00 2.75 2.50 EnergyInformationAdministrationSurvey
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In2010,morethan1,700truckingcompanieswithatleastfivetrucksfailed.Itisverylikelythatsignificantlymoretruckers (withlessthanfivetrucks)turnedintheirkeysaswell. TruckingCompanyFailuresversusDieselFuelPrices Q200Q111 Note:Onlyincludesfleetswithfivetrucksormore. Sources:AvondalePartners,U.S.DepartmentofEnergy,andAmericanTruckingAssociations Thishardshipsurprisesfewintheindustry.Formanytruckers,fuelhassurpassedlaborastheirlargestoperatingexpense. Overthepastfouryears,totalindustryconsumptionofdieselfuelhasgonedownroughly10percent,yetthepriceofdiesel hasmorethandoubledduringthesametimeperiod.Nearlyallofthemilesthattruckersdrivearenondiscretionary. TruckingDieselCostversusConsumption TotalCosttotheIndustry(inbillionsofdollars)vs.TotalIndustryConsumption(inbillionsofgallons)
Truckingisalowmarginindustry;therefore,itiseasytosee whymanymotorcarriersarereportingthathigherfuel priceshavegreatlysuppressedprofits,iftheyaremakinga profitatall.Theindustrycantabsorbthesefuelincreases, whichmustbepassedonandultimatelyshowupashigher pricesofgoodsonstoreshelves. Againstthisbackdrop,ATAhasbeenadvocatingfora comprehensivedomesticenergypolicy.Werecognizethat thereisnosinglesolutiontohighoilprices.Wearenot goingtobeabletoconserveourwaytoenergy independence,substituterenewablefuelsorsimplydrillour wayoutofthiscrisis.Wemustadoptanalloftheabove approach. Truckingcompaniesrecognizetheimportanceoffuel conservationtotheirbottomlineandhaveembracedslower speeds,routeoptimization,driverincentiveprograms, antiidlingdevices,moreproductivetrucks,congestion mitigationandothertechnologiestoreducetheirfuel bills.Earlierthisyearthefederalgovernment,withATAs support,proposedthefirsteverfuelefficiencystandardsfor newheavytrucks. Thegovernmentalsohascreatedamarketforrenewable fuels.Thesegovernmentmandatestousealternativefuels areexpensiveandcreatechallengesforconsumers; however,alternativefuelsrepresentanimportantpartof thealloftheaboveapproachtoenergypolicyandwe shouldsupporteffortstoovercomethesechallengesand ensurealternativefuelsareaffordableandaccessiblefor consumers. Whileconservationandalternativefuelsaretwolegsofa threeleggedstool,ourgovernmentseemstohaveturned itsbackonthethirdlegofthestoolbyfailingtoaggressively developourdomesticpetroleumresources.Infact, domesticpetroleumproductionintheGulfofMexicoand Alaskaandevennaturalgasproductionhascomeunder attackbyoppositiongroups.
Aswebeginatransitiontoalternatives,wemustnotforget thatthetruckingindustryandoureconomywillcontinueto dependupondieselfuelfortheforeseeablefuture.The failuretoboostdomesticfossilfuelsuppliesduringthis transitionwillincreaseourdependenceonforeignsources ofoil,leadtodamagingfuelpricespikesandposea continuingthreattooureconomyandnationalsecurity. ThetruckingindustryandAmericanconsumersneedour governmenttoprovideaccesstoourdomesticoilresources tomeetourneedforfueluntilalternativeenergysources arereadyforprimetime.
AboutAmericanTruckingAssociations
TheAmericanTruckingAssociationsrepresentseverytypeand classofmotorcarrierintheUnitedStates.ATAsmissionisto serveandrepresenttheinterestsofthetruckingindustrywith oneunitedvoice;toinfluenceinapositivemannerfederaland stategovernmentalactions;toadvancethetruckingindustrys image,efficiency,competitivenessandprofitability;toprovide educationalprogramsandindustryresearch;topromotesafety andsecurityonournationshighwaysandamongourdrivers; andtostriveforahealthybusinessenvironment.
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Steel Manufacturing
American Iron and Steel Institute

Energypolicyisincrediblyimportanttothedomesticsteel industry,astheproductionofsteelisenergyintensive.In 2009,thelatestyearforwhichAISIenergydataisavailable, thedomesticsteelindustryconsumed14.6milliontonsof coalandcoke,214billioncubicfeetofnaturalgasand36.4 billionkilowatthoursofelectricity.Somecompaniesare predominantlydependentonelectricitytheelectricarc furnace(EAF)segmentofourindustryaccountedfor84 percentofourindustryselectricityconsumption. Conversely,integratedproducersaccountedfor94percent ofallcoalandcokeconsumedbythesector.Naturalgasis importantforbothEAFandintegratedproducers.Fuel prices,choicesandavailabilityinfluenceeachcompanys profitabilityindifferentways. Inordertoreduceitsenergycosts,theindustryhaslowered itsenergyintensityby30percentsince1990.Infact,a recentDepartmentofEnergysponsoredreportconcluded thatthesteelindustryintheUnitedStatesisthemost energyefficientofanymajorsteelproducingcountry. Nevertheless,asmajorconsumersofenergy,steel companiesarenegativelyimpactedbyhighprices.Reliable andplentifulsourcesofenergyareessentialtoourcurrent productivity,futuregrowthandinternational competitiveness. CongressandtheAdministrationhavebeforethema numberofenergypolicyoptions,includingthoseregarding renewableelectricity,aCleanEnergyStandard(CES),energy efficiencyandenhancedaccesstooilandnaturalgas resources.AISIbelievesthatCongressshouldcrafta comprehensiveandmarketdrivenenergyandclimate changepolicybuiltaroundpromotinggreaterdevelopment ofdomesticenergysources,incentivesforefficiency improvementsandadditionalsupportforindustryeffortsto developbreakthroughtechnologies.Inparticular,suchan agendashould:
Createanabundantandaffordableenergysupply bydevelopingdomesticoil,naturalgas,nuclear powerandcleancoalresourcesandfullymakeall thesesourcesofenergypartofthenationsenergy independencestrategymovingforward.In particular,naturalgasisastrategicresourcethat canhelpdriveeconomicrecovery.Furthermore, steelpipeandtubingareintegraltoboththe gatheringandtransmissionofoilandnaturalgas.It isessentialthatthesematerialsbeproducedinthe UnitedStates,ratherthaninothernationswith lowerratesofenergyefficiency,sothatAmerican manufacturingcanbenefitfromdomesticenergy explorationandproduction.Environmental regulationsonshalegasdrillingshouldmaximize thepotentialbenefitwhilebalancingimpactonthe environment. Inparticular,AISIsupportsH.R.1861,thebipartisan InfrastructureJobsandEnergyIndependenceAct introducedbyReps.TimMurphy(RPA),BillShuster (RPA),JimCosta(DCA)andTimWalz(DMN).This legislationwillmoveforwardwiththeleasing programoftheOuterContinentalShelf(OCS), puttingusonapathtoenergyindependence,while alsousingtherevenuegeneratedtoaddress nationalinfrastructure,alternativeenergyand energyefficiencygoals.Itproperlyfocuseson expandingaccesstoAmericasdomesticoiland naturalgassourcesandrebuildingAmericas transportationsystem.H.R.1861willlowerenergy costsfordomesticmanufacturing,likethesteel industry,allowingustomaximizeourproductivity andinternationalcompetitiveness,while maintainingvaluableAmericanjobs.
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Maximizetheenergyefficiencyofexistingindustrial facilitiesinthenearterm.Thiscanbeachievedby incentivizingthecaptureandconversionto electricityofwastedheatandbyproductgasesat industrialfacilities,throughthetaxcode,grantand loanprogramsandrenewableenergypolicy. Measuresthatpromotecombinedheatandpower (CHP)shouldbepursuedaswell.Therelationship betweenutilitiesandindustrialcustomersshould alsobestructuredinsuchawayastomaximize energyandenvironmentalbenefitsfromefficiency investments.incentivizingthecaptureand conversiontoelectricityofwastedheatand byproductgasesatindustrialfacilities,throughthe taxcode,grantandloanprogramsandrenewable energypolicy.Measuresthatpromotecombined heatandpower(CHP)shouldbepursuedaswell. Therelationshipbetweenutilitiesandindustrial customersshouldalsobestructuredinsuchawayas tomaximizeenergyandenvironmentalbenefitsfrom efficiencyinvestments. Includecleansourcesofenergyincludingnuclear, naturalgas,hydroelectricandcleancoalcarbon captureandstorage(CCS)inpoliciespromoting renewablesourcesofelectricity,suchaswindand solar.Incentives,includingtargetedtaxcreditsand otherfiscalmeasures,shouldbeusedtopromote investmentincleanenergyprojects,ratherthan relyingonmandates,suchasanoverlyrestrictive andnarrowrenewableelectricitystandard.The costsassociatedwithadditionalrenewableelectricity capacityshouldnotbedisproportionatelyborneby largemanufacturingpurchasers. Supportbreakthroughresearchforlongerterm benefits.Steelandotherenergyintensive manufacturershavemadegreatstridesinenergy efficiencytothepointthattodaysprocessesare optimized.Tofurtherlowerenergyintensityandto substantiallyreduceemissions,newprocessesmust bedevelopedthatdonotrelyoncarbonfuels.Steel hasalreadybegunthislongrangeresearch.Cost sharing,taxincentivesandfavorabledepreciation schedulesarealsoimportantforthisworkandfor transformingtheenergysector.
ProductionofsteelintheUnitedStatesversusotherpartsof theworldisthereforegoodfortheenvironmentandshould beencouraged,notlimited.Numerousstudiesconfirm steelsessentialroleinglobalinfrastructure,energy generationandtransmission,andtransportation.Steelwill continuetobeessentialtothegreeningofU.S infrastructureanditsenergysupplythroughatleast2050. ThesteelindustryworldwideiscommittedtoCO2reduction viaincreasedrecycling,sharingofbestavailabletechnology, developingbreakthroughtechnologiesfromwhichfuture steelsmaybemadeemittinglittleornoCO2andbythe continueddevelopmentoflighter,strongerandmoredurable steelswhichenableourcustomerstoreducetheirCO2 emissions. Policymakersmustrecognizethatifclimatechangeisa problem,itcanonlybeaddressedeffectivelyonaglobal basis.Thismustbetheguidingprincipleifwearetoactually lowerCO2emissionsgloballyanddosowithoutlesseningthe competitivenessofU.S.manufacturersintheglobal marketplace.Domesticclimateandenergypolicymusttake intoaccountourinternationalcompetitorsorhowthecostof ourcompliancewillalterthecompetitivebalanceinthe marketplace.Specifically,theenactmentofanyCO2 reductionlegislationorregulationsintheUnitedStatesmust applythesamelevelofstringencytoothermajorsteel producingnations,suchasChina,onacontemporary timeline.Forexample,EPAregulationofgreenhousegases (GHGs)fromstationarysourcesundertheCleanAirActwill likelyharmthecompetitivenessofdomesticmanufacturing, shiftingAmericanjobsandemissionstounregulatednations. TheCleanAirActstatutewasnotintendedfortheregulation ofGHGs,andisnottheproperstatutoryschemeforseeking reductionsinGHGemissionsbecauseofitslocalizedmethods ofregulationandenforcementanddisregardforcompetitive economicimpacts. AboutAmericanIronandSteelInstitute
Inaddition,thesteelindustryintheUnitedStateshasthe lowestenergyconsumptionandlowestCO2emissionsperton ofproductionofanysteelproducingindustryintheworld.
AISIservesasthevoiceoftheNorthAmericansteelindustryin thepublicpolicyarenaandadvancesthecaseforsteelinthe marketplaceasthepreferredmaterialofchoice.AISIalsoplays aleadroleinthedevelopmentandapplicationofnewsteelsand steelmakingtechnology.AISIiscomprisedof25member companies,includingintegratedandelectricfurnace steelmakers,and118associateandaffiliatememberswhoare supplierstoorcustomersofthesteelindustry.AISI'smember companiesrepresentmorethan80percentofbothU.S.and NorthAmericansteelcapacity.
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Oil & Gas Development
American Petroleum Institute

Americasenergyfuturedependsontheabilityofitsenergy companiestoprovidetheoilandnaturalgastheUnited Statesneedstogrowtheeconomy,createjobsandenhance energysecurity.Itistimeforanewfocusonenergypolicyto advanceourcountryseconomicinterestsandsustainour wayoflife. Ournationspolicymakersneedtorecognizethattheoiland naturalgasindustryisaneconomicengineforournation.Its impactontheU.S.economyissignificant,supportingmore than$1trilliontotheeconomyannuallyand9.2millionU.S. jobs.DevelopingmoreofAmericasoilandnaturalgas resourceswillhelpmeetgrowingdemand,createhundreds ofthousandsofjobs,providerevenuetofederalandstate governments,andenhanceournationsenergysecurity. Economicgrowthopportunitiesassociatedwithoiland naturalgasdevelopmentaresignificant.Arecentstudyfrom WoodMackenzie,forinstance,showsthegreaterpotential forhighergovernmentrevenuefromincreasedenergy productioncomparedtohighertaxesonenergycompanies. Thestudyfoundthatfrom2011to2025,negativeeconomic consequencesofhighertaxeswill,inthelongrun,more thanoffsetanyshorttermtaxrevenuegains.Underhigher taxation,revenuesareestimatedtodecreaseby$128 billion,butincreasedaccesscouldgenerateanestimated $194billioninadditionalgovernmentrevenue. Moreimportant,asmillionsofAmericansstruggletofind work,in2025morethan530,000additionaljobsare possibleintheincreasedaccessscenario.Thehighertax scenariocouldresultinjoblosses,estimatedatalmost 170,000inthepeakjoblossyearof2014. Thosewhoadvocatehighertaxesonoilandnaturalgas companiesignorethefactthatthesecompaniesalready providealotofrevenuetothegovernment.Oilandnatural gascompaniespaid$1trillionintotalincometaxesfrom 1980through2008andmorethan$178billiontothe governmentinrent,royaltyandbonuspaymentsfrom1982 through2009.Theoilandnaturalgasindustryprovidesthe U.S.Treasury,onaverage,withwellover$86millioneach day. Allowingcompaniestoaccessoilandnaturalgasresources currentlyofflimitscouldgenerateanadditional$1.7trillion ingovernmentrevenueoverthelifeoftheresource. Industrytaxes,royalties,rentalpaymentsandother developmentfeesfundcommunityneeds,includingroads, schoolsandparks. Inaddition,millionsofAmericansbenefitfromtheindustrys strongeconomicperformanceasshareholdersinthese companiesthroughpensionplans,mutualfunds,IRAsand 401kplans. ThousandsofU.S.businesseslargeandsmalldependonoil andnaturalgasoperations.Theindustrysupports businesseswelloutsidetheGulfregionvendorsthat providevitalsupportandservicestoGulfoperationsare locatedasfarawayasPennsylvaniaandIllinois. The9.2millionU.S.jobssupportedbyourindustryinclude 2.2milliondirectjobsand7.0millionindirectjobsfromthe purchaseofgoodsandservices.In2008and2009,industry salariesintheexplorationandproductionsectorswere morethandoublethenationalaverageforallU.S.jobs.The numberofdirectoilandnaturalgasindustryemployeesis largerthanthepopulationsof15states. Allowingoilandnaturalgascompaniestoaccessdomestic resourcescurrentlyofflimitscouldcreatehundredsof thousandsofnewjobsinthefuture. APIanditsmembercompaniesarecommittedtoworking withpolicymakerstopursueathoughtful,commonsense energyagendaonethatpromotesU.S.economicgrowth, jobcreationandsafe,reliable,affordableenergyforthe future.
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Ourcompaniesarealsolookingtothefuture.Inadditionto thedevelopmentandimprovementofsafetystandardsand operations,ourindustryisattheforefrontofdeveloping advancedenergytechnologies,puttingusonthecutting edgeofexploringfor,findingandproducingenergy resources,increasingenergyefficiency,anddiversifying energyresources,drawinguponafullrangeofenergy sources,includingalternativeandrenewablefuels. Industryinvestmentsintechnologiessuchascogeneration andcarboncaptureandstorage,havereducedgreenhouse gasemissionsbymorethan48millionmetrictonsofcarbon dioxideequivalentfrom2007to2008,areduction comparabletotaking9.7millioncarsofftheroads. Theindustryisalsoresearching,developingandmarketing alternativeandrenewablesourcesofenergy,including solar,geothermal,biofuels,fuelcells,hydrogenpowerand windenergy. So,then,whatshouldpolicymakersdo? Firstofall,theyshouldsupportthedevelopmentofNorth Americasvastoilandnaturalgasresources,bothoffshore andonshore.Thatwillhelpmeetgrowingenergydemand, createhundredsofthousandsofnewU.S.jobs,provide billionsincriticalrevenuetofederal,stateandlocal governments,andenhanceourenergysecurity.Withthisin mind,policymakersshould:
Promotepoliciesandaregulatoryenvironmentthatwill supportthegrowthandfreetradeofCanadianoil sands,areliable,safeandreadilyavailableenergy source,includingtheapprovalofkeypipelineprojects thatwillhelpcreatejobsinboththeUnitedStatesand Canada.
Policymakersshouldalsoavoidpunitivenewenergytaxes. Withpoliciesthatcreateandsustainalevelplayingfieldfor allenergyoptions,theoilandnaturalgasindustrywill createnewjobsandhelpfuelthenationseconomy. Conversely,addingbillionsofdollarsinnewandpunitive taxesonourindustrywillhaveadevastatingimpacton Americanjobsandeconomicgrowth. Policymakersshouldadvancepoliciesthatencourage companyinvestmentcreatingjobsandmakingU.S. companiesmorecompetitive.Andtheyshouldresistefforts toimposepunitivenewtaxesorcostlyandunnecessary regulationsonAmericanenergycompaniesthatwouldkill jobs,sloworreverseeconomicgrowthandharmAmerican businessesandconsumersalike. Finally,policymakersshouldenactsmartenergypolicy basedonsoundeconomicprinciples.Burdensomeand unnecessaryEPAregulationscoulderodeindustry environmentalandefficiencygainsandhaveunintended consequencesfortheU.S.economy.Ournationneeds policiesthatprovideforenergyexploration,energy productionandenvironmentalprotection. Policymakersshouldpreventtheunintendedconsequences ofEPAproposals.EPAsmissioncanandshouldbemet throughscientificallysound,costeffectivemeasuresthat allowforcontinuedeconomicgrowthandjobcreation.In addition,theyshouldallowCongresstocommittoa thoughtfulandbalancedapproachtoclimatechangethat involvesallstakeholders,ratherthancontinueEPAeffortsto regulateGHGemissionsundertheCleanAirAct. Ourleadersmustpursueathoughtful,commonsenseenergy agendathatpromotesU.S.jobcreation,economicgrowth andenergysecurity,andavoidsharmfultaxesor regulations.Weencouragepolicymakerstoincreaseenergy productionbysupportingpoliciesthatpromoteallenergy sources.Weaskthattheypursuepoliciesthatencourage investmentinnewenergyprojectsandprovidemarket basedsolutionstomeetenergydemand. Inshort,policymakersshouldalsorejectnewenergytaxes andturnasideunnecessaryregulationsonoilandnatural
Reexamineandreconsiderlimitingoffshoreexploration andproductionintheeasternGulfofMexicoandinthe AtlanticandPacific. ContinueplansforonandoffshoreAlaska development,whichwillgeneratethousandsofjobs throughoutthecountryfrompipelinemanufacturers intheMidwestandcomputertechniciansonthecoast tolaborunionworkersforconstructionandmainte nance. Expeditiouslyprocessandapprovedrillingplansand permitsforpendingandfutureleaseareas. Supporttheonshoredevelopmentofnaturalgas, includingshalegas,andrefrainfromimposing unnecessarynewregulationsortaxesonnaturalgas operations. Supportgreateruseofoilshaleproduction,whichcould addasmanyas100,000newjobs,millionsintax revenuesandroyaltiesandleasepaymentstopping$2 billionayear.
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gasdevelopment,andtheyshouldabandoneffortsbythe EPAtoregulategreenhousegasesundertheCleanAirAct; instead,allowCongresstocommittoathoughtfuland balancedapproachtoclimatechangethatinvolvesall stakeholders. Oilandnaturalgasareenginesofeconomicdevelopment aroundtheworld.Forthenextseveraldecadesatleast,we willcontinuetorelyonoilandnaturalgastomeetgrowing energydemand,evenasweincreaseourenergyefficiency, andasrenewablesandalternativesplayanincreasingly importantroleinachangingenergylandscape. Giventhisenergyreality,thenationhasimportantdecisions tomakeaboutitsenergyfuture.Whatweneedtodayand tomorrowarepolicychoicesthatincrease,notdecrease, energyproduction.Weneedincreasedaccesstowhereoil andnaturalgasarefound,whileprotectingnationalparks andfragileecosystems.Governmentpoliciesshould harmonizeourenergyandenvironmentalgoals,encouraging responsibledevelopmentthatcreatesjobsandhelpsdrive oureconomy. Asasociety,wecannotremainpassivetoenergy,the environmentoreconomicgrowth.Eachwillfallshortofits fullestpromisewithoutconstructiveindustrygovernment partnershipscommittedtoprovidingournationwitha workableenergysecuritypolicy.
AbouttheAmericanPetroleumInstitute
TheAmericanPetroleumInstituteistheonlynationaltrade associationthatrepresentsallaspectsofAmericasoiland naturalgasindustry.Ourmorethan470corporatemembers, fromthelargestmajoroilcompaniestothesmallestof independents,comefromallsegmentsoftheindustry.Theyare producers,refiners,suppliers,pipelineoperatorsandmarine transporters,aswellasserviceandsupplycompaniesthat supportallsegmentsoftheindustry.
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Air Transport
Air Transport Association

industryfuelconsumptionbymorethan12percentoverthe In2011,airlineshavebeencontendingwithrapidlyclimbing pastfiveyearsalone. jetfuelpricesthathaveoutpacedcrudeoilpricestoreach theirhighestlevelsinceSeptember2008.ThroughMay, U.S.JetFuelPrices:1991Present Source:EIAWeeklyPetroleumStatusReportforU.S.GulfCoastjetfuelpricespergallon U.S.GulfCoastjetfuelwasaveragingfor$3.00pergallon Annually,a1centincreaseinagalloncostsU.S.airlines outofrefinery,notincludingtaxes,transportationcosts,and $175million;a$1increaseinabarrelcoststhem$415 intoplanestorage. million.Toputthisintosomecontext,in2010,U.S.airlines postedanestimatednetprofitof$3billionwithameager2 Thecostofjetfuelistypicallyanairlineslargestcostcenter, percentmargin,oneofonlythreeprofitableyearsinthe andinthefirstquarterof2011itconstituted33percentof entiredecade.From20012010,U.S.airlinesincurred airlineoperatingcosts,trailedbylabor,at25percent.The cumulativenetlossesofapproximately$54billion. U.S.EnergyInformationAdministration(EIA)isprojecting $3.08forthefullyear.Accordingly,U.S.passengerand Havingtheairlineslargestcostcenterremainsovolatile cargoairlinesareprojectedtospend$53billiononfuelin makesbusinessplanningextremelydifficult.Fromtheend 2011,upfrom$39billionin2010despitesubstantial of2009totheendof2010,thepriceofjetfuelrose44cents gainsinfuelefficiencythathashelpedreduceannual pergallon.Fromtheendof2010totheendofApril2011, thepriceofjetfuelrose84centspergallon.
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U.S.AirlineIndustryFuelConsumptionandExpense
Unfortunately,fuelhedgingprogramsareincreasingly expensiveandprovideonlylimitedprotectionwhenjetfuel pricesareoutpacingcrudeoilprices.Consequently,airlines havebeenforcedtoreducethelevelofairservice,as demonstratedbythefollowingcharts:
ScheduledDomesticFlightsPerDay
Note:Valueinparenthesesisaveragepricepaidpergallonexcludingtaxes, intoplanefees,pipelinetariffsandhedgingcosts;Sources:ATA,Energy InformationAdministrationandDOT(forU.S.passengerandallcargoair
Whenjetfuelpricesriserapidly,airlineshavelimited optionstomitigatethesecosts,principallygeneratingmore revenueordecreasingnonfuelexpenses.Asfuelprices increase,flightsbecomelessprofitablesoairlinesmayalso reducecapacity,andsomecarriersalreadyhavereported downwardgrowthplans.
ScheduledInternationalFlightsPerDay
NetIncome($Billions)andProfitMargin(%) forU.S.Airlines
ScheduledU.S.andnonU.S.airlineflightsdepartingU.S.airportsfornonU.S. destinations Source:Innovata(viaAPG)publishedschedulesasofMay27,2011
AllU.S.passengerairlinesandcargoairlinesreportingtoDOTForm41P12, Accounts9899and4999
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Jobs(FullTimeEquivalents)AtU.S.Scheduled PassengerAirlines:1999Present Also,highandvolatilefuelpriceshaveforcedtheairlinesto cutjobs,whichhavefallenbymorethan160,000fulltime AboutAirTransportAssociation equivalentssincetheMay2001peakof544,400. Foundedin1936,theAirTransportAssociationofAmerica,Inc. (ATA)isthenation'soldestandlargestairlinetradeassociation. Theairlinesandthereforeairlinecustomersremain Theassociation'sfundamentalpurposeistofosterabusiness vulnerabletohighandvolatilefuelprices.Athoughtful, andregulatoryenvironmentthatensuressafeandsecureair balanced,comprehensivenationalenergypolicyanda disciplinedlegislativeandregulatorypostureareessentialto transportationandenablesU.S.airlinestoflourish,stimulating begintoreestablishaneconomicallyvibrantairlineindustry. economicgrowthlocally,nationallyandinternationally.By workingwithitsmembersinthetechnical,legalandpolitical Ifseriousstepsarenottakenimmediatelytostemthe arenas,ATAleadsindustryeffortstofashioncrucialaviation economicdamagefromsoaringfuelprices,amuchsmaller policyandsupportsmeasuresthatenhanceaviationsafety, airtransportnetworkwillbecomeapermanentreality, securityandwellbeing.ATAhasseentheairlineindustrygrow hinderingeconomicgrowthandseriouslycrimpingAmerican fromthesmall,pioneeringcompaniesofthe1930sinto mobility,justintimemovementofgoodsandthelifestyle indispensablefacilitatorsoftheglobaleconomy.ATAandits towhichallofushavebecomeaccustomed. memberscontinuetoplayavitalroleinshapingthefutureof airtransportation. Alongwiththeairlines,policymakersandthepublicatlarge mustrecognizethatinordertoenhancethetravel experience,renewfleets,expandanddevelopnew infrastructure,retaintalentedemployeesandpromote economicwellbeing,theindustrysfinancialconditions mustimprovemarkedly.Publicpoliciesthathavelong contributedtoindustryinstabilitywillneedtobe abandoned,andairlinerestructuringmustcontinuewithout interference.Morethan10millionU.S.jobsaredepending onit.
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Electricity
American Public Power Association

TheU.S.electricutilitysectorisfacingnumerousmajor environmentalregulationsbetween2011and2020.The mostonerousoftheseregulationsfacingmostutilitiesare thosependingorbeingimplementedundertheCleanAir Act,butotherspendingundertheCleanWaterActandthe ResourceConservationandRecoveryActalsoposemajor challenges.Collectivelytheseair,waterandwaste regulationswillseektoreducehazardousairpollutants (includingmercury);reducegreenhousegases(GHGs) withoutcommerciallydeployabletechnologytocaptureand storetheseGHGs;potentiallyregulatecoalashashazardous waste;reviseregulationstothewatermediabyimposing newintakedevices;andreviseeffluentdischargelimitsby loweringdischargetemperatures.Thiscomplexsetof anticipatedU.S.EnvironmentalProtectionAgency(EPA) regulationswillcollectivelyimposethebiggestexpenseon theelectricpowersectorinthehistoryofthesector.These costscomeatanunprecedentedtimeofreduced commercialandmanufacturingload,highunemployment, reducedpropertyvaluesandtaxrevenueincities,and concernsabouteconomicvitalitybothlocallyandnationally.
MaximumAchievableControlTechnologyStandardsfor HazardousAirPollutants; CleanAirTransportRule1; CleanAirTransportRule2; CoalCombustionResiduals(CCR)DisposalRule; CleanWaterActEffluentGuidelines; GHGPreventionofSignificantDeterioration(PSD) PermittingRequirements;and
Background TheEPAisexpectedtopromulgateseveralmajorregulations overthenextfewyearsthatwillhaveasignificantimpacton utilityresourceplanning,operationsandthecostof electricity.Theseimpacts,coupledwiththetimingoftheir developmentandimplementation,iscausingincreasing concern.Belowisachartdelineatingthesemajorrules: MajorEPARegulationsAffectingUtilityindustry (ExpectedSchedule): CoolingWaterIntakeStructures,Section316(b)ofthe CleanWaterAct;
Section111GHGNewSourcePerformanceStandards. Thelikelyimpactontheelectricutilityindustryofthe neartermconvergenceoftheseregulationswillbean unprecedentedsetofnewcostlyandcapitalintensive requirementsthatcouldforcesignificantplantclosures,the lossofjobsandtherestructuringofourindustry.Usually, suchasignificantoverhaulofanindustryisdonethrough thelegislativeprocesswherelawmakerscanweighthe cumulativeimpactstoassurethatprogressismadeatan acceptablerateconsideringboththebenefitsandcostsof acting.Inthiscase,however,anumberofindependent regulatoryprogramswillmoveforwardwithnostructured capabilityorstatutoryauthoritytoassesscumulative impactsonourindustry,includingourresponsibilityto produceelectricityinareliableandaffordablemanner. IndependentanalysisbytheNorthAmericanElectric ReliabilityCorporation(NERC)predictsthatfourofthese majorrulescoalashmanagement(CoalCombustion ResidueRule,CCR),coolingwatertowers(Section316(b) Rule),airtoxics(MaximumAchievableControlTechnology orMACT)andcriteriapollutantcontrols(Transport1Rule) couldresultintheclosureof40to76gigawattsof generatingcapacityacrossthecountryby2018.According toNERC,thecombinationofthefourrulesassessedshows
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PlanningReserveMarginsmaybesignificantlyimpacted withdeterioratingresourceadequacyinamajorityofthe NERCregions/subregions.BecauseNERConlyevaluated fourrules,itsestimatedrangeofexpectedcapacity retirementsmayunderestimatethetotalimpactofallthe anticipatedenvironmentalregulatoryrequirements expectedtobeissuedoverthenewfewyears.Forinstance, becauseofthetimingofNERCsreport,itsanalysisdidnot evaluatetheimpactofgreenhousegas(GHG)controlson theindustry,includingthenewsourcereviewpermitting controlsthatwentintoeffectonJanuary2,2010,fornew andmodifiedelectricitygeneratingunitsandEPAs proposedscheduletofinalizerulesfornewandexisting unitsunderSection111oftheCleanAirActby2012.The NERCanalysisalsodidnotaddressthepotentialimpactof EPAsannouncedTransport2rulethatwillrequirefurther reductionsinNOxandSO2emissionsbeyondthereductions expectedinthefirsttransportrule. PotentialImpactsonPublicPower Inadditiontothelikelyplantclosures,joblossesandfurther negativeimpactstoaweakenedeconomy,APPAis concernedthattheimpactofthecumulativeburdenof EPAsscheduledregulationscouldhavethefollowing undesirableoutcomes: ManyofEPAsNewestRulesWillConflictwithPre existingNewSourceReviewRules Aftermultiplecourtdecisionsandinterpretativeguidance, EPAsrulesaffectingwhenexistingplantsmustinstallnew controlshasgonethroughmanydifferentrevisions.Under thecurrentrulesandguidance,energyefficiencychanges andtheinstallationofmanypollutioncontroldevicesto meetthenewGHG,airtoxicsandcriteriapollutant regulationswouldlikelytriggeradditionalcontrolsunder NewSourceReviewwhichwilladdsignificantcoststoan alreadyhighcompliancepricetag.Thiscounterproductive regulatoryconflictisjustoneofmanyexamplesofwhythe cumulativeimpactsoftheserulesmustbeassessedand discussed. TheChallengeofAddressingNonTraditionalAir PollutantsundertheCleanAirAct WhenCongressenactedthemajorprovisionsofthecurrent CleanAirActin1970,1977and1990,themainfocusofthe legislationwasaddressingtraditionalcriteriapollutants, suchassoot(particulatematter)andsmog(ozone)and hazardousairpollutants.Thereisnoclearrecordthat
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legislatorsanticipatedthatonedaythesesameregulatory structureswouldbeforcedtocontrolasubstanceas ubiquitousascarbondioxide,wheretherearenoclear controltechnologies.Aclassicsquarepeginaroundhole situation,EPAandthecourtscouldendupforcing nonsensicalrequirementsonindustryatthesametimethe agencyisstrugglingtoaddressanumberofverydifficult traditionalandcostlyairpollutionproblems. APPAPosition APPAisconcernedthatEPAhasnotlookedatthe cumulativeimpacttheseregulationswillhaveontheelectric utilitysectorandoveralleconomy.Manyofthese regulationswillresultinpermanentplantclosures,aswellas shutdownsforretrofits,thatwillimpactreliability,increase electricratesforconsumersandaffectournations economicrecovery.Americahasmadegreatstridesover thelastseveraldecadesinreducingairpollutionwhileboth theeconomyandpopulationhavegrown.Thestrengthof theUnitedStatesliesincarefullybalancingenvironmental progressandeconomicgrowthtoassurethatbothcango forward.Technologyinnovationflourishesunderboth incentivesandagrowingeconomy.Reliableandaffordable electricitypricesarekeyingredients.Thepending convergenceofregulationsthatarenowaffectingtheutility industryundertheCleanAirAct,theCleanWaterActand theResourceConservationandRecoveryActwillset cumulativepressuresinmotionthatarelikelyto substantiallyalterelectricityproductionwhichwillleadto higherelectricityprices,plantclosuresandthelossofjobs throughoutthiscountry. APPAencouragesCongresstolookatthecumulative impactsoftheseregulationsontheelectricitysectorand beyond.Also,Congressshouldextendthecompliance deadlinestotheseregulationssothattheindustrycandeal withalltheregulationsinarealisticmanner.Ifnot,these regulationswillcollectivelybethelargestnumberand largestexpenseinthehistoryoftheelectricpowersector. Thesecostscomeatanunprecedentedtimeofreduced commercialandmanufacturingload,highunemployment, reducedpropertyvaluesandtaxrevenueincities,and concernsabouteconomicvitalitybothlocallyandnationally.
AboutAmericanPublicPowerAssociation
BasedinWashington,DC,APPAisthenationalserviceorganiza tionforthenationsmorethan2,000communityandstate ownednotforprofitelectricutilitiesserving46million customers.
Manufacturing
National Association of Manufacturers

TheU.S.manufacturingsector,whichgenerates$1.6trillion ofGrossDomesticProduct(GDP),consumesonethirdofall energyinthecountryandisespeciallyvulnerabletohigh energyprices.Notonlydomanufacturersuseenergy sources,especiallyoilandnaturalgas,asameansto generateelectricity,butthesectoralsousessomeformsof energysuchasnaturalgasasfeedstocktomakeproducts rangingfromplasticstopharmaceuticals.Affordableenergy is,therefore,essentialtothecompetitivenessofthisvery importantsectorofeconomy. AccordingtotheBureauofLaborStatistics2010data,the manufacturingsectoremploysmorethan11.5million Americanswithanaveragecompensationofmorethan $69,000peryear,whichismorethan50percenthigherthan othernonfarmemployers.Since2000,whenenergyprices begantoclimb,theUnitedStateshaslostmorethan5.5 millionhighwagemanufacturingjobs.Muchofthisis attributedtotheincreasingcostofenergy. EndUseSectorSharesof TotalConsumption,2009 However,theUnitedStatescanretainthesehighwagejobs anditscompetitiveedgeifitexpandsitsdomesticsourcesof energywhichcanprovideaffordableandreliableenergyfor manufacturers. Asthechartsonthispagedemonstrate,industryaccounts foralargeshareofenergyuseinthiscountry,withmuchof thatenergycomingfromfossilfuels. IndustrialSectorEnergyConsumptionin PercentageofTotal Onewaythiscanbeachievedisbyexpandingleasinginthe OuterContinentalShelf(OCS).Anincreaseinfederalleasing cancreateadditionalhighpayingjobs.Theoilandgas industrydirectlyemploys2.1millionAmericans.Inaddition, theindustrygeneratessomesevenmillionU.S.jobsthat supporttheoilandgassectorthroughserviceor construction.Sinceliftingthedeepwaterdrillingmorato riuminNovember2010,theDepartmentoftheInteriorhas beenslowinissuingpermitsforoffshoredrilling,particularly
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fordeepwaterprojects.Asaresult,anumberofoilrigs havebeenleftidleandtensofthousandsofpeoplehave losttheirjobs. Theseandotherflawedfederalpoliciesthatbanaccessto domesticsourcesofnaturalgasandoilhaveposedother challengestotheUnitedStates,rangingfromaballooning tradedeficittoincreasingvulnerabilityandrelianceon politicallyvolatileregionsintheworldforenergy.In2010, U.S.oilandgasimportsaccruedadeficitof$273billion. Thisoilandgasdeficitnowaccountsfor55percentofthe U.S.totaltradedeficitingoodsandservices.In2009,im portsaccountedforapproximately51percentofour petroleumconsumption,and24percentofournettotal energyconsumption.U.S.consumptionofliquidfuelsis predictedtocontinueincreasethrough2035to21.9million barrelsaday,andthiswillrequiremoreimportsunless accesstodomesticenergysourcesincreases. Becausethemanufacturingsectorreliesonnaturalgasasa feedstockforproductsrangingfromplasticsto pharmaceuticals,theincreaseindemandfornaturalgasfor electricitygenerationhasresultedinaspikeinbasic overheadcostsfordomesticenergy. LikeallU.S.consumers,manufacturersarealsovulnerable tovolatilepetroleummarkets.Americanmanufacturing uses22percentofallpetroleumconsumedintheUnited States.Volatilityinoilmarketscanbereducedbyincreasing accesstodomesticenergysupplies. TwoExamples:DecreasedAccess,IncreasedPrices TheU.S.DepartmentoftheInterior(DOI)estimatesthatthe OuterContinentalShelf(OCS)containsmorethan420 trillioncubicfeetofnaturalgasand86billionbarrelsofoil. Unfortunately,federalpolicieshaveblockedaccessto resourcesonmorethan85percentoftheOCS. TheUnitedStateshasthelargestreservesofoilshaleinthe world,providinganothersignificantsourceofdomestic energytobolsterthecompetitivenessoftheindustrial sector.U.S.demandforpetroleumproductsisabout20 millionbarrelsperday.Ifoilshalecouldbeusedtomeeta quarterofthatdemand,800billionbarrelsofrecoverable resourceswouldlastformorethan400years,accordingto someestimates. AccordingtotheUnitedStatesDepartmentofEnergy(DOE), thenationsproductioncapacityforoilshaleisaround2.5 millionbarrelsperdayby2030.Underahighgrowth
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scenarioconductedbytheRandCorporation,in30yearsthe UnitedStatescouldpotentiallyreachproductionlevelsof threemillionbarrelsofoilperdayfromoilshale.Oilprices couldfallbythreepercenttofivepercentatproductionat theselevels.Assumingathreepercenttofivepercentfallin worldoilprices,theresultingbenefitstoconsumersand businessusersintheUnitedStateswouldberoughly$15 billionto$20billionperyear.IfU.S.policiesallow innovativeenergyprocessessuchasoilshaledevelopment tomoveforward,theU.S.manufacturingsectorwillbeable toretainitscompetitiveedgeamongitsstrongest internationalcompetitors. Increasingaccesstodomesticenergysourceswilldomore thanincreasethecompetitiveedgeofthecountrys manufacturingsector.Newpolicieswouldbenefitthe nationseconomyonseveralfronts.Bydevelopingourvast reservesofoilandnaturalgasontheOCSandoilshale,the UnitedStatescanreduceprices,thetradedeficitand dependenceonforeignenergysources. AboutNationalAssociationofManufacturers
TheNationalAssociationofManufacturers(NAM)isthe preeminentUSmanufacturersassociationaswellasthe nationslargestindustrialtradeassociation,representingsmall andlargemanufacturersineveryindustrialsectorandinall50 states.Manufacturingemploysnearly12millionworkers, contributesmorethan$1.6trilliontotheU.S.economy annually,isthelargestdriverofeconomicgrowthinthenation andaccountsforthelionsshareofprivatesectorresearchand development. TheNAMunderstandsthatitsroleasthemostinfluentialU.S. manufacturersassociationistobethepowerfulvoiceofthe manufacturingcommunityandtheleadingadvocatefora policyagendathathelpsmanufacturerscreatejobs.TheNAM amanufacturersassociationconsistingof11,000manufactur ingcompaniesisastrongforceforsensiblegovernment policiesthatwillreducethecostofproductionandteardown barrierstoexports. TheNAM'sworldclassstaffofpolicyexpertsprovides unmatchedaccessandinformationonthekeyissuesaffecting yourbusinessandyourbottomline.Weareonthefrontlines ofawiderangeofpolicybattles,fromhealthcarereformand laborrelationstoenergyandtheenvironmenttotradepolicy andtaxes.Ateveryturn,weareworkingonbehalfof manufacturersinAmericatoadvancepoliciesthathelp manufacturersdowhattheydobest:createeconomicstrength andjobs.
The Business of Chemistry
American Chemistry Council

ShaleGasandNewPetrochemicalsInvestment: BenefitsfortheEconomy,JobsandU.S.Manufacturing Introduction Chemistrytransformsrawmaterialsintotheproductsand processesthatmakemodernlifepossible.Americas chemicalindustryreliesonenergyderivedfromnaturalgas notonlytoheatandpowerourfacilities,butalsoasaraw material,orfeedstock,todevelopthethousandsofproducts thatmakeAmericanliveshealthier,saferandmore sustainable. Accesstovast,newsuppliesofnaturalgasfrompreviously untappedshaledepositsisoneofthemostexciting domesticenergydevelopmentsofthepast50years.After yearsofhigh,volatilenaturalgasprices,theneweconomics ofshalegasareagamechanger,creatingacompetitive advantageforU.S.petrochemicalmanufacturers,leadingto greaterU.S.investmentandindustrygrowth. Americaschemicalcompaniesuseethane,anaturalgas liquidderivedfromshalegas,asafeedstockinnumerous applications.LowethanepricesgiveU.S.manufacturersan advantageovermanycompetitorsaroundtheworldthat relyonnaphtha,amoreexpensive,oilbasedfeedstock. Growthindomesticshalegasproductionishelpingto reduceU.S.naturalgaspricesandcreateamorestablesup plyofnaturalgasandethane. Asaroughruleofthumb,U.S.GulfCoastbased petrochemicalsaremorecompetitivevisvisothermajor producingregionsaroundtheworldwhentheoiltogas priceratioisabove7:1.Thepriceratiohasbeenabove7:1 forseveralyears,andrecentlyreached22:1,creatingmore favorableconditionsfordomesticpetrochemicalinvest ment. In2010,theU.S.Gulf Coastcostposition improvedsomuch thattheregionnowissecondonlytotheMiddleEastin termsofcompetitiveness.Asaresult,Americasplastic exportsareupnearly10percent.Furthermore,ethane suppliesaretighteningintheMiddleEast.Theeraoflow costfeedstocksisoverforsomeproducingnationsinthat region.ThiswillalsoaidU.S.competitivenessandmay inducecapitalinvestmentintheUnitedStates. NewACCReport Inanewreport,ShaleGasandNewPetrochemicals Investment:BenefitsfortheEconomy,JobsandU.S. Manufacturing,theAmericanChemistryCouncil(ACC) uncoveredatremendousopportunityforshalegasto strengthenU.S.manufacturing,boosteconomicoutputand createjobs. ACCsreportanalyzedtheimpactofahypothetical,but realistic25percentincreaseinethanesupplyongrowthin thepetrochemicalsector.ItmeasurednewU.S.chemistry outputandjobsgeneratedbyincreasedchemistry investment(directimpacts);newproductionandjobs createdinchemistryssuppliersectors(indirectimpacts); andnewoutputandjobsinthebroaderU.S.economyasa resultofspendingbynewemployees(inducedimpacts) Thereportfoundthata25percentincreaseinethanesup plywouldgenerate:
17,000newjobsintheU.S.chemicalindustry; $32billionincreaseinU.S.chemicalproduction; $16.2billioninnewcapitalinvestmentbythechemical industrytobuildnewpetrochemicalandderivatives capacity;
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395,000newjobsoutsidethechemicalindustry (165,000jobsinotherindustriesthatarerelatedtothe increaseinU.S.chemicalproductionand230,000jobs fromnewcapitalinvestmentbythechemicalindustry); $132.4billioninU.S.economicoutput($83.4billion relatedtoincreasedchemicalproduction(includes additionalsupplierandinducedimpacts)plus$49.0 billionrelatedtocapitalinvestmentbyU.S.chemical industry);and $4.4billioninfederal,state,andlocaltaxrevenue annually($43.9billionover10years).
ThescenariooutlinedinACCsreportiscorroboratedby trendsinthechemicalindustry.AnumberofACCmember companies,includingTheDowChemicalCompany,Shell Chemical,LyondellBasell,BayerMaterialScienceandothers, haveannouncednewinvestmentsinU.S.petrochemical capacitytobenefitfromavailableresourcesandgrowtheir chemicalbusinesses.Someoftheseinvestmentsarebeing madeinareasofthecountrythathavebeenhardesthitby declinesinmanufacturing,improvingtheoutlookin economicallydepressedareasofthecountry.Further developmentofthenationsshalegasandethanecandrive anevengreaterexpansionindomesticpetrochemical capacity,providedthatpolicymakersavoidunreasonable restrictionsonsupply. NewEconomicOutputandJobCreation Additionalethaneuseinthepetrochemicalandderivative industrieswouldgeneratesignificantU.S.outputand employment.Itwouldgeneratehighpaying,desirablejobs inthechemicalindustryoneofthemostknowledge intensiveindustriesinthemanufacturingsector. Knowledgeworkerisatermcoinedbymanagementguru PeterDruckerseveraldecadesago.Itreferstoemployees withuniversitydegreesortrainingwhodeveloporapply specializedknowledgeintheworkplace.Accordingtoa studybyIndustryCanada,38percentofallU.S.chemistry industryemployeeshaveatleastauniversitydegree.Thisis nearlydoubletheaverageinU.S.manufacturing. Increasedethaneusebythechemicalindustrywouldalso generatepurchasesofrawmaterials,servicesandother suppliesthroughoutAmericassupplychain,andthewages earnedbynewworkersbothwithinandbeyondthe chemicalindustrywouldbespentonhouseholdpurchases andtaxes,generatingevenmorenewjobs.Alltold,new investmentsresultingfromexpandedethanesupplieswould generateapayrollof$27.3billion.Thiscomesatatime
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when15millionAmericansareoutofwork.Moreover,the newjobswouldprimarilybeintheprivatesector. ACCsPolicyPosition Thebusinessofchemistryisattheheartofmanufacturing. Accesstonaturalgasfromshaledepositshasthepotential todramaticallyboostAmericascompetitivenessandhelp meetournationsgoalsforincreasedexportsandnewjobs. Americasenergypolicymustincludetimelyaccesstoour owndomesticenergyresources,includingshalegas, coupledwithsensibleregulatorypoliciesthatprotectour environment. Tomaximizethenationalbenefitsofshalegas,energy policymustavoidunduerestrictionsonnaturalgas suppliesfromshaledeposits.
Stateoversightofhydraulicfracturingisappropriate sincestategovernmentshavetheknowledgetooversee theprocessintheirjurisdictions. Theuseofvariousproductsofchemistryinhydraulic fracturingmustbetransparentwhileprotecting proprietaryinformation.
ACCsupportsacomprehensiveenergypolicythatpromotes energyefficiencyandconservation,energydiversity,and expandeddomesticoilandnaturalgassupply,onshoreand offshore. FormoreinformationaboutACCsreport,pleasevisit www.americanchemistry.com/Policy/Energy/ShaleGas
AboutAmericanChemistryCouncil
TheAmericanChemistryCouncil(ACC)representstheleading companiesengagedinthebusinessofchemistry.ACCmembers applythescienceofchemistrytomakeinnovativeproductsand servicesthatmakepeople'slivesbetter,healthierandsafer. ACCiscommittedtoimprovedenvironmental,healthandsafety performancethroughResponsibleCare,commonsense advocacydesignedtoaddressmajorpublicpolicyissues,and healthandenvironmentalresearchandproducttesting.The businessofchemistryisa$674billionenterpriseandakey elementofthenation'seconomy.Itisoneofthenations largestexporters,accountingfortencentsoutofeverydollarin U.S.exports.Chemistrycompaniesareamongthelargest investorsinresearchanddevelopment.Safetyandsecurityhave alwaysbeenprimaryconcernsofACCmembers,andtheyhave intensifiedtheirefforts,workingcloselywithgovernment agenciestoimprovesecurityandtodefendagainstanythreat tothenationscriticalinfrastructure.
Independent Oil & Gas Production
Independent Petroleum Association of America

WeallknowthatastrongU.S.oilandnaturalgasindustry Americanworkforceandeconomy.Thefiguresare yieldsastrongAmericaneconomy.Afterall,energyisthe remarkable.In2010,almost4millionjobsweresupported lifebloodoftheAmericanandglobaleconomies.And,when bytheindependentsbusinessecosystemthatsmorethan itcomestoenergy,theUnitedStatesneedsit;theU.S.has 3percentofallU.S.jobs. it;andAmericasthousandsofindependentproducers acrossthecountrycandeliverit,safelyandaffordably.Not Whatexactlyistheindependentsbusinessecosystem? onlyisthisthekeytoeconomicgrowth,butAmerican Well,itfostersjobcreationonthreelevels.Firstarethe energyisalsofundamentaltoournationalsecurityandthe directjobscreatedwithintheiroperations.Next,purchasing verywayoflifeinournationtoday. suppliesandbusinessservicescreatejobswithintheir suppliernetworks.Finally,thedirectandindirectworkers Independentoilandnaturalgasproducersplayamajorrole spendtheirwagesinthegeneraleconomybuyhousing, paytaxesandsoon.Thishelpskeeparangeofothers inthedevelopmentofAmericasenergyresources.The employed,frommomandpopshopownerstodoctorsto IndependentPetroleumAssociationofAmerica(IPAA) teachers. representsmorethan6,000independentproducers operatingin32states;theseindependentsdrillcloseto94 Theonshoreindependentsupstreambusinessecosystem percentofthewellsintheUnitedStates.Itisnosecretthat contributed$320.6billion(2.2percentofU.S.GDP)in2010 Americasindependentproducershavealonghistoryof andwillriseto$466.7billion(2.4percentofU.S.GDP)by creatingjobsandeconomicgrowthforthenation.Their entrepreneurialspiritandwillingnesstotakeonriskspawns 2020.Thisleadstothepaymentof$37billion(2010)and innovationlikeopeningupshaleplaysthatwillyielda100 $54billion(2020)ofcorporateandseverancetaxesaswell plusyearsupplyofcleanburningnaturalgaswhile asfederalroyalty,bonusandrentpaymentsof$1.4billion creatingjobsandcontributingtoU.S.GDP.However,these and$2.4billion,respectively. greatbenefitscannotberealizedif IndependentsVersusOtherProducers soundnationalenergypoliciesarenot putforthbylawmakerstoencouragethe responsibledevelopmentofenergy spurringgrowthandinvestmenthereat home. HowMuchDoIndependentProducers ContributetotheEconomy? AnewstudyfromIHSGlobalInsight,Inc., commissionedbyIPAA,hasquantified justhowsignificantthecontributionof independentsoperatingonshoreistothe
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Thisstudy(combinedwithanearlier,similarIHSstudyon offshoreindependents)hasrevealedthatindependents collectivelyproduce54percentofU.S.oiland85percentof Americasnaturalgas,accountingfor67percentoftotalU.S. productionofoilandnaturalgasresources. WhatDoesThisMeanfortheNation?
legislativeandregulatoryuncertaintybypushingforpolicies thatwouldinhibitenergydevelopmentintheUnitedStates. Forexample,theObamaAdministrationandsomein Congressareonceagaincallingformassivetaxhikesonthe oilandnaturalgasindustry.Increasingtaxesonindependent producerswillcostAmericanjobs,reducetaxandroyalty revenuetoAmericangovernments,hurtAmerican manufacturers,aswellasAmericanretirees,andharm Americasindependentoilandnaturalgasproducersstand Americanenergysecurity. readytojumpstartastagnantAmericaneconomybycreating jobsandgeneratingrevenue.Astrongoilandgasindustry ManyinWashingtonclaimthattheoilandgasindustry alsostrengthensnationalsecurity,providesacleaner receivestaxsubsidies;however,thiscouldntbefartherfrom environmentandimprovesthenationsbalanceoftradeby thetruth.Theprincipalexplorationandproductiontax greatlyreducingourdependenceonforeignsourcesof provisionsaredeductionsforordinaryandnecessary energy. businessexpensesdrillingcostsexpensingandpercentage depletion.Thesedeductionshavebeenapartofthetaxcode However,noneofthiscanhappeniftheUnitedStates formorethan80years.Drillingcostsare20to35percentof doesnthaveanenergypolicyinplacethatwillencouragethe thecapitalexpenditurebudgetsofindependentproducers, developmentofourenergyresources.Whileallformsof meaningwithouttheabilitytoexpensethesecosts,an energywillbeneededtomeettherisingfuturedemand,the independentwouldhavetoreducetheirdrillingbudgetsby factremainsthatoilandnaturalgasmeetmorethan60 asmuchasonethirdalmostimmediately. percentofourenergyneedstodayandwillcontinuetodoso fordecadestocome. Foroilandnaturalgas,onlyindependentproducersand royaltyownersareallowedpercentagedepletion,andonly Despitealloftheeconomicbenefits,theObama onU.S.production.Further,thedeductionislimitedtothe AdministrationandsomeinCongresscontinuetocreate first1,000barrels/dayofproduction(alongwithotherlimits), therebymakingitaprovisionthat islargelyusedbysmallbusiness CurrentU.S.EnergySupplyis83%FossilFuels; producersandroyaltyowners. DemandisBroadlyDistributedamongtheMajorSectors Smallbusinessproducersarethe (2009TotalU.S.EnergyUse=94.6quadrillionBtu) primaryoperatorsofAmericas marginaloilwells(19percentof Energy demand Energy supply U.S.production)andmarginal naturalgaswells(12percentof Industrial 30% Nuclear U.S.production).Theseare Industrial 9% calledmarginalwellsbecause (non-electric) Renewable 20% theyaremarginallyprofitable, 8% Petroleum Transportation barelyeconomictooperate. Electricity 37% 29% Additionalcostscouldshutthem Industrial 10% down.Therefore,anyproposed Coal 21% taxhikesonoilandnaturalgas Electricity Commercial producerswouldharmAmericas 15% Residential & smallbusinessproducers,not Commercial Electricity (non-electric) Natural Gas BigOil. Residential 25% 11% 15% Anotherareaofconcernforoil andnaturalgasproducersis Residential & Commercial environmentalregulations.In 42% Richard Newell December 16 2010 S EIA A lE R i 2009 8 particular,severalfederal EnergyInformationAdministration,AnnualEnergyReview2009 agenciesaretargetingtheuseof
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hydraulicfracturing.Hydraulicfracturing,whichisthelinch pintoshalegasandshaleoilproductionisbeing aggressivelytargetedbyantidevelopmentgroups. Althoughthestateshaveeffectivelyregulatedhydraulic fracturingformorethan60years,withoutasinglecaseof watercontaminationlinkedtotheuseofhydraulic fracturing,manyinCongressarecallingforfederal regulations.TheIPAAcontinuestoworkwithfederal agencies,aswellascongressionalmembers,topresentthe factsabouthydraulicfracturingandtoeducatethemabout whystatesarebetterequippedforregulatinghydraulic fracturingratherthanthefederalgovernment. Inadditiontohydraulicfracturing,awholehostofother federalenforcementinitiativescontinuetothreaten Americanenergyproducers,includingclimatechange, revisingCleanWaterActpermittingguidelines, implementingnewSpillPreventionControland Countermeasureregulations,revisingstormwater managementregulations,reworkingozonestandardand implementinggreenhousegasregulations,onshoreand offshore(shallowanddeepwater)permittingissues,the WildLandsprogram,anagencywidebanontheuseof categoricalexclusions,newEndangeredSpeciesAct designationsandfinancialreform.Alloftheseregulations poseuncertaintyfortheindustry,andasaresulthinder investment,whichcostsjobsandleadstolessrevenue collected. Ourpolicyleadersshouldencouragethesuccessofall Americanbusinessesnotpickwinnersandlosers. Americasoilandnaturalgasindustryprovidesthousandsof goodpayingjobs,muchneededrevenueforlocal,stateand federalgovernments,andimprovesourbalanceoftradeby reducingourdependenceonforeignresourceswhile strengtheningournationalsecurity.IPAAwillcontinueto
workdirectlywiththeAdministration,thefederalagencies andthoseinCongressbothDemocratsandRepublicans whorecognizethevaluethatindependentAmericanenergy producerscandeliverifgiventheopportunitytodoit. Unfortunately,muchofthelegislationthathasbeenput forthrecentlywouldcreatecostly,bureaucratichurdlesthat wouldfurtherimpedetheproductionoftaxpayerowned resourcesintheUnitedStates. AbouttheIndependentPetroleumAssociation ofAmerica IPAAistheleading,nationalupstreamtradeassociation representingtheoilandnaturalgasproducersthatdrill95 percentofthenationsoilandgaswells.Thesecompanies accountfor54percentofAmericasoilproductionand85 percentofitsnaturalgasproduction. Withmorethan6,000membersin740cities,across45states, IPAAisdedicatedtoensuringastrong,viableAmericanoiland naturalgasindustrythroughfederalleveladvocacyand awardwinninggovernmentrelations.Itsnationalmedia outreachprogramseducatethepubliconthevitalrolethis industryplaysinthenationaleconomyandnationalsecurity. Formoreinformation,pleasevisitwww.ipaa.org.Youcanalso followIPAAonTwitter,orvisitourblog(http://www.ipaa.org/ blog)ornewoilindependentswebsite (www.oilindependents.org).
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Agriculture & Fertilizer
The Fertilizer Institute

vitalcomponentofthedeliverysystemthatbeginsatthe Foodsecurityhavingenoughfoodtofeedagrowing plantormineandendsatthefarmersfield. populationremainsoneofthegreatchallengesfacing humanity.AccordingtotheUnitedNations,theglobal Transportationcostsaffectfertilizercostsbecausefertilizer populationwillincreasebymorethantwobillionpeoplein isabulkyandheavyproductthatmustoftenbeshipped thenext40years,andmanyreportshaveindicatedthat greatdistancesbyavarietyofcarriers,includingocean foodproductionneedstodoubleby2050. goingships,railroads,trucksandriverbarges.Petroleum Because40to60percentoftheworldsfoodproductionis pricesdirectlyimpactthepriceofplantfoodbecauseships, madepossiblethroughtheeffectiveuseoffertilizer,this trainsandtrucksrunonpetroleumandhigheroilprices naturalresourceandtheindustrythatprovidesitisatthe raisetransportationcosts. centeroftheglobalsolution. ManufacturingCostsandPlantFoodValue TransportationCostsImpacttheFertilizerIndustry Naturalgasplaysacriticalroleintheproductionof Whenyouconsiderthateveryfieldofcropsintheworldis fertilizersthatserveasthesoilfoodthatplantsfromcorn madeupofindividualgrowingplants,eachinneedof andwheattopumpkinsandapplesneedtoproducea nutrients,thefertilizerindustryhasadistributionand healthyandbountifulcrop.Mostspecifically,naturalgasis economicchallenge FromRawMaterialtoFertilizer unrivaledinalmostany otherbusiness. Helpingfarmersfeedall thosehungrycropsaround theworldsothey,inturn, canfeedusinvolvesmuch ofsomethingcalled distributionlogistics,or, gettingwhatyouneedfrom itsplaceoforigintoitsplace ofuse. Morethanoneoutofevery threetonsoffertilizer producedintheworldgets exported,oftenverylong distances;asaresult, transportationcostsarea
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usedtoproduceammonia,whichalsoservesastheprimary ingredientinmostnitrogenfertilizersandisanessential ingredientinmanyfinishedphosphatefertilizers. Anhydrousammoniaisproducedbyreactingnitrogenand hydrogenathightemperatureandpressure.Thelimiting factorinproducinganhydrousammoniaishydrogen.In NorthAmerica,themainsourceofhydrogenusedin industrialprocessesisusuallynaturalgas.Ittakesabout33 millionBtusofnaturalgastoproduceonematerialtonof anhydrousammonia. Highpricesorshortagesofnaturalgascancauseammonia plantstoshutdownforlackofrawmaterials.Thisinturn cancausebottlenecksinfertilizerproduction.Evenifmore suppliesofnaturalgasbecomeavailableorpricesdrop,it takestimetorestartproductioninashutteredplant. TheUnitedStatesisthefourthlargestproducerofammonia intheworldandcurrentlyproducesover10milliontonsof materialannually.However,mostoftheworldsammonia isnowproducedoutsidetheUnitedStates.Infact,nearly 40percentofammoniaplantcapacityintheUnitedStates closedduringthelast12years,partlybecauserisingnatural gaspricesmadetheplantsuneconomicaltooperate. Currently,thediscoveryofnewsuppliesofnaturalgas throughouttheUnitedStateshasthepotentialtoenhance pricestabilitywithinthenaturalgasmarket.However, environmentalconcernsassociatedwiththetechnologyand
TopWorldNitrogenFertilizerProducers FiscalYear2007/08
processesnecessarytoextractnaturalgasfromthenewly discoveredreservescouldlimitthepositivebenefits associatedwiththosesupplies. Whenfertilizermanufacturinginputcostsincrease dramatically,highercostproducersoffertilizercanbe drivenoutofthemarket.Thisreducesthesupplyoffertilizer relativetodemand,whichcanresultinhigherprices.Plants stillneedessentialnutrientstogrowanddeliverabundant yieldsofhighqualitycrops,butthefarmerhastobeableto earnenoughfromthecroptopayforthecostofproducing it. Forthisreason,sharpchangesinthepriceoffertilizerwill haveanimpactonfarmersdecisionsregardingfertilizer application. QuickFacts Naturalgascostsmakeupasmuchas90percentofthe costofnitrogenfertilizer; Eachyear,thetypicalNorthAmericancorncrop removesmorethan7.43billionpoundsofnitrogen;4.32 billionpoundsofphosphorus;and2.96billionpoundsof potassiumfromoursoils;and Dependingonthetypeofcropsystemused,ittypically takes1.5to2poundsoffertilizernutrientstoproducea bushelofcorn;2.5to3.5poundsoffertilizernutrients toproduceabushelofwheat;and1.0to1.5poundsof fertilizernutrientstoproduceabushelofsoybeans. AboutTheFertilizerInstitute
TheFertilizerInstitute(TFI)istheleadingvoiceinthefertilizer industry,representingthepublicpolicy,communicationand statisticalneedsofproducers,manufacturers,retailersand transportersorfertilizer.IssuesofinteresttoTFImembersin cludesecurity,internationaltrade,energy,transportation,the environment,workerhealthandsafetyandnutrientsteward shipprogramsthatpromotefertilizerbestmanagementprac ticesthatincreaseagriculturalproductionandfarmerprofitabil ity,whileenhancingenvironmentalprotectionandimproving sustainability.
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Offshore Energy Development
National Ocean Industries Association

Energy.Jobs.Economy.Oneleadsdirectlytotheotherand inthatorder.ThemembersoftheNationalOcean IndustriesAssociation(NOIA)understandthatgasolinedoes notcomefromagasstationandthatjobsareanatural productofaprudent,wellplannedandsafeoffshore explorationanddevelopmentprogram. Ourjobsandlivelihoodsdependuponareliable,secureand reasonablypricedsourceofenergy.TheU.S.Government predictsthatoilandnaturalgaswillremainamajor componentofourenergyfeedstockforatleastthenext generation.Today,domesticoffshoreoilandgas productionproducesapproximately30percentofouroil and11percentofthenationsnaturalgas. Whilethesefiguresarecertainlynoteworthy,onlyabout2 percentoftheOuterContinentalShelf(OCS)iscurrently leased,andweonlylookforoilandgasinapproximately15 percentofournationsoffshorearea.Weareexploringand reexploringinthesameareasthatwereavailablewhen RichardNixonwaspresident.Atthesametimeourneedfor energyhasgreatlyexpandedandthuswehaveturnedto othernations,includingthepoliticallyturbulentMiddleEast, tosupplyourreliable,secureandreasonablypriced energy. LastyearsDeepwaterHorizontragedyappearstohave beenanavoidableaccident.Thoseinvolvedintheoffshore energyfieldhavereviewed,evaluatedand,whennecessary, revisedstandardsandprocedureswiththeaimofavoidinga repeatincident.Newoilspillcontainmenttechnologies havebeendevelopedandresponsemethodsand technologieshavebeenscrutinized,eyedthroughthe microscopeandrevisedwherenecessary. Thetechnologicallyadvanced andchallengingoffshoreoil andgasindustrycontinuestoreviseandupdateitssafety standards,whilemaintainingaremarkablesafetystanding ofhavingfeweraccidentsthanthoseinvolvedinmore everydayindustriessuchasveterinaryservices.Whileone accidentisonetoomany,accidentsunfortunatelyoccur throughoutlifeandacrossallindustries.However,ouroff shoreenergyresourcescanandwillbedeveloped,andour industryremainscommittedtodoingitinthesafestmanner possible. ExplorationanddevelopmentofmoreofourOuter ContinentalShelfmakesdollarsandsense.Over50,000 wellshavebeendrilledoffshorepriortotheDeepwater Horizonaccidentwith4,000ofthosewellsindeepwater. Morethan90,000jobsweredirectlyrelatedtotheoffshore oilandgasindustryin2009,accordingtoa2010study conductedbyHISGlobalInsight(USA),Inc. Whilethepriceofoilisgloballyinfluenced,itstandsto reasonthatifmoreoilandnaturalgasisproducedathereat home,therewillbemoreAmericanjobsandgreaterstability intheamountofoilonthemarket.Offshoredevelopment couldbeenhancedtomeetthegoalofreducingimportsby onethird.TheoffshoreenergypotentialoftheUnited Statesisestimatedat44.4billionbarrelsofoiland183.2 trillioncubicfeetofnaturalgas,accordingtogovernment agencies.Thatsenoughoiltopower60millionvehiclesfor almost25yearsandenoughnaturalgastoheat60million Americanhomesfor57years.Itisalsomorethanenough toreduceourimportsbymorethanonethird,whichhas beenastatedgoaloftheObamaadministration.
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Withthebeginningofthe112thCongresstheOffshore Othercountriesgetit!Whilewehaveprevented explorationof85percentofouroffshoreareas,other EnergyIndustryhasseenpositivemovementintheHouse, countrieshavebeenexpandingtheiroffshoreprograms. whichhasalreadypassedseveralpiecesoflegislationto DiscoveriesoffthecoastofBrazil,intheNorthSeaandoff restartleasingandopentheGulfalongwithmuchneeded thecoastofAfricahavespurredenergyproductionandare newareasintheAtlantictoexploration.TheSenateisalso forcingourcompaniestosendjobstothosecountries. consideringlegislationthat,ifamendedtoinclude Whileathome,theEnergyInformationAgency(EIA) proproductionmeasures,willfurtherthemissiontoputthe predictsthatproductionintheGulfofMexicowilldecline13 offshoreindustriesbacktoworkandproduceAmerican percentin2011.Withoutachangeindirection,itis madeenergyandAmericanmadejobs.Thereisplentytobe predictedthatproductionintheGulfofMexicowilldecline donetostabilizetheindustryandmakesafe,reliableaccess WeeklyU.S.RetailGasolinePrices,RegularGrade EnergyInformationAdministration by300,000barrelsperdayby2017,duetothelossof toAmericasOCSareality,includingstreamliningpermitting processesandmuchneededregulatoryreform. momentuminthepermittingandexploration. Despiteatragicandchallenging2010,thefactremainsthat Recordhighgasolinepricestendtosharpenourfocuson energypolicy.Thechartabovedepictsthehistoryandsharp theoffshoreoilandgasindustrygeneratesjobs,stimulates theeconomyandprovidesareliable,securesourceof andsteadyincreaseofgasolinepricesoverthelasttwo years. energy.Leasedoffshoreareasprovidehundredsof thousandsofhighpayingandhightechjobs.Development Thereisalsonothinglikehighgasolinepricesanda ofresourcespreviouslyofflimitscouldcontributetomore concernedconstituencytoattracttheattentionofCongress, than160,000newenergyrelatedjobsby2030.And,the anditappearsthatproposalstoboostproductionwill addedbonusismorerevenuetothefederalgovernment. continuetobeahottopicduringthe112thCongress. Theoilandgasindustrypaysitsfairsharewhenallowedto
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produce.Over$200billioninfederalrevenuesfromoff shoreoilandgashavebeencollectedsince1982.In2008, theoffshoreoilandgasindustrypaid$17.9billionin royalties,rentsandbonusbids.In2009,theypaid$5.7 billion.In2010,theypaid$5.2billion. TheNationalOceanIndustriesAssociationisinthemiddleof theconversationonCapitolHillandcontinuestowork tirelesslytopromoteandpursuegovernmentsolutionsthat willputourmembersbacktoworkprovidingenergysecurity andstabilityaswellasmuchneededfederal,stateandlocal revenuesforournation. AboutTheNationalOceanIndustriesAssociation

TheNationalOceanIndustriesAssociation(NOIA),foundedin 1972with35members,representsallfacetsofthedomestic offshoreenergyandrelatedindustries.Today,our270member companiesarededicatedtothesafedevelopmentofoffshore energyforthecontinuedgrowthandsecurityoftheUnited States.NOIAistheonlynationaltradeassociationrepresenting allsegmentsoftheoffshoreenergyindustryfromproducingto drilling,engineeringtomarineandairtransport,offshorecon structiontoequipmentmanufactureandsupply, telecommunicationstofinanceandinsurance.Ourmembership alsoincludescompaniesinvolvedinorbranchingouttopursue offshorerenewableandalternativeenergyopportunities.
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Highway Users
American Highway Users Alliance

AmericashighwaysarevitaltothehealthoftheAmerican economyandaffecteveryAmericanwhethertheydrive oftenordontevenownacar.Thecostoftransportation affectsthepriceofconsumergoods,andwhenthecostof gasolineanddieselrises,theseextraexpensesarepassedon toconsumersintheformofhigherpricesforfoodandother deliveredgoods.HighfuelcostshiteveryAmerican consumerthroughtheseindirectcosts. Ofcourse,theaverageAmericanhighwayuserincluding millionsofcommuters,truckers,busdrivers,recreational vehicleenthusiastsandmanyothersknowsfirsthandhow thepriceatthepumpcanaffectonesbottomline. Affordablefuelandgoodtransportationinfrastructure provideAmericanswithalargeopportunitycircle,which allowspeopletheflexibilitytoworkandlivewherethey wish,toshopatvariousretailcenters,traveltorecreational andculturaldestinationsandvisitfamilyandfriends.Yet, asthepriceoffuelincreases,manyfindthisopportunity circlecontractedasdriversmustlimitmilestraveledto accountforthehighercostofgasolineandothergoods. Aspersonalopportunitiesbecomeconstrainedbytheprice offuel,communities,regions,statesandtheentirenation arealldevastatedbyaneconomicdoublewhammy.First, thepressuretospendonfuelmeansthatlessmoneyis availabletopurchaseothergoodsandservices.Second,if vehiclemilestraveleddeclines,thelosttripsmeanthat fewerpeopleareeventakingthetimetogotostoresor otherwisecontributetotheeconomythroughtravel.In fact,thehighgasolineanddieselpricesof2011havestarted toinfluenceconsumerstoremainathomeandpurchase theirgoodsonline.Thismaybegoodnewsforonline retailers,butmanysmallbusinessesandretailworkerswill beforcedtosuffertheconsequences. Furthermore,highfuelpricescan disproportionatelyaffect disadvantagedcommunitiesinboth ruralandinnercityareaswherethis opportunitycircleiscritical.Forthesecommunities,the abilitytofindworkisessentialtoapromisingfuture,and personalmobilityiskeytofindingandholdingthemost rewardingjobsformanyoftheseAmericans.Ifones opportunitycircleislimitedtoonlythoseareas immediatelyaccessibletohisresidence,theabilitytofind andmaintainworkbecomeschallenging. Similarly,farmers,ruralresidentsandruralbusinessesare particularlyhurtwhenfuelpricesrise.Thosewholiveand workinruralareastendtohavelongercommutes. Moreover,highfuelpricesmeanthatfarmer,ranchersand smallbusinessowners,amongothers,mustpaymoreto havegoodsdeliveredtotheseruralareasaswellaspay moretohavetheirgoodsshippedtomarkets. Highenergypricesalsohaveseriousconsequencesfor energyintensiveindustriesthatrelyonstable,affordable suppliesofenergytoproduceanddelivertheirgoods.In 2008whengasolineanddieselpricesreachedanalltime high,thousandsoftruckingcompanieswereforcedtoclose, andU.S.manufacturerslostmillionsofjobswhenenergy costsbegantorise.Forthosecompaniesthatcanpass alongpartofthisexpensetocustomers,lowerdemandfor theirgoodsorserviceswilllikelyresult.Ontheotherhand, thosebusinessesthatcannotpassalongtheseaddedcosts maybeforcedtoidleoperations,layoffworkersorreduce inotherareas.Neitherisaparticularlygoodchoice, especiallyforsmallbusinesses. Automobiledealershipsareanothergrouphithardbyhigh fuelcosts.Manyofthesesmall,familyowneddealerships seethecostoftheirvehicledeliveriesskyrocketatatime
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whenconsumersmayhavedifficultlyaffordinganew vehicle.Asaresult,dealersarestuckwithexcess inventoriesandareoftenforcedtocutpricesandtakehuge losses. TheRecreationalVehicle(RV)industrylikewiseseesadrop insaleswithhighfuelprices.Backin2008whengasoline priceshitrecordhighs,theRVindustryanditscustomers sufferedgreatly.SomeRVplantswereforcedtoshutdown productionwhileRVdealershipswereunabletoselltheir inventory.Meanwhile,RVowners,amajorityofwhomare familiesandseniors,cutvacationplansandlimiteduseof theirRVscancellingtripstonationalparksandother touristdestinations. Unfortunately,thehighwayusersarenottheonlyonesthat directlysufferwhenthepriceatthepumpistoohigh; highwayinfrastructurereliesonsteadyfundingthatis supportedthroughthepurchaseofgasolineanddiesel.In theUnitedStates,everygallonoffuelpurchasedincludesa smallfee18.4centsforeverygallonofgasolineand24.4 centsforeverygallonofdieselthatisplacedintothe HighwayTrustFund.Federalhighwayuserfeessuchas theseexcisetaxesarecriticaltotheHighwayTrustFund, whichprimarilyfinancesroadprojectsacrossthecountry. Thesetaxesarenotvariableandthereforedonotrisewhen thecostoffuelincreases.Assuch,whenconsumerscannot affordtodriveasmuch,theypurchaselessfuel,leaving highwayswithlessrevenuetobuildandrepairroads. Affordableenergynotonlysupportsandgrowsthe economy,butalsoplaysavitalroleinmaintainingAmericas vasthighwayinfrastructure. So,itsnotjusttheaveragecommuterwhoisaffectedby highfuelprices;nearlyeverybusinessandconsumerthat
dependsonhighwaytransportationsuffers.Giventhe devastatingimpactfuelpricescanhaveonhighwayusers andthenationaleconomy,thefederalgovernmenthasa dutytoensurestableandaffordablesuppliesofenergy, particularlythesupplyofoilandnaturalgas,inorderto growtheeconomyandensureahighqualityoflifeforall Americans. Somehavearguedthattightenergysuppliesandhighfuel pricesshouldbeusedasatooltoreducehighwayuse. However,thoseargumentsignorethedevastatingeffects thatsuchpolicieshaveonrealpeople,realbusinessesand theAmericaneconomy.Policymakersshouldrejectthese suggestionsanddoasmuchaspossibletoreducepricesand stabilizefuelsuppliesforthelongterm.Anythinglessis irresponsible.
AboutAmericanHighwayUsersAlliance
TheAmericanHighwayUsersAllianceisanonprofit, nonpartisanorganization,whichadvocatesforpublicpolicies thatimprovemobilityandsafety,tobenefitthemillionsof Americanroadusers.Theassociationbringstogetherthe interestsofusersofallhighwaymodesthatcontributetothe HighwayTrustFund,throughamembershiprosterthatincludes AAAclubsfromcoasttocoast,truckinggroups,buscompanies, motorcyclistsandrecreationalvehicleenthusiasts.These membersandhundredsofothermemberbusinessesand associationsrequiresafe,reliableandefficientroadsto facilitatethemovementoftheiremployees,customersand products.
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Nuclear Energy
Nuclear Energy Institute

AsthenuclearcrisisinJapancontinuestounfold,theU.S. nuclearpowerindustryhasreinforceditsdedicationtothe safetyandsecurityoftheU.S.nuclearenergyfleet. SafetyistheU.S.nuclearenergyindustrystoppriority.U.S. nuclearplantsaredesignedwithmultilayered,redundant safetyfeaturesthataddlayersofprecautionontopof precautiontoprepareforanyunexpectedeventthatcould challengeareactor.Nuclearplantoperatorsregularlyshare lessonslearnedaboutplantsafetytofurtherimproveand upgradethetechnologyinrealtime.Inaddition,plant workersundergotrainingeverysixweekstosharpentheir skillssothattheyarepreparedintheeventofanemergency tooperatetheplanteffectively. Theindustryisalsooverseenbyanindependentgovern mentwatchdog,theU.S.NuclearRegulatoryCommission (NRC),whichrequiresnuclearplantstobeabletowithstand themostseverenaturaleventsthatmayoccurneareach nuclearplantlocation.NRCregulatorsareonsiteateach nuclearfacility24hoursadaytomonitorplantoperations andholdtheplantaccountabletotheindustrysstringent safetystandards.Nuclearplantoperatorsalsoworkclosely withlocal,stateandfederallawenforcementneareach nuclearfacilitytoensurethatallagenciesarefully integratedandcouldprotectthenearbycommunitiesinthe eventofanemergency. NuclearPowerPlantsContributeSignificantlytoState andLocalEconomies KeyFacts: TheNuclearEnergyInstitute(NEI)estimatesthatprivate investmentinnewnuclearpowerplantshascreated 14,000to15,000cleanenergyjobsoverthelastfew years. Eachyear,theaveragenuclearplantgenerates approximately$430millioninsalesofgoodsand servicesinthelocalcommunityandnearly$40millionin totallaborincome. Thepermanentjobsatanuclearplantcreatean equivalentnumberofadditionaljobsinthelocalareato providethegoodsandservicesnecessarytosupportthe nuclearplantworkforce(e.g.,grocerystores,dry cleaners,cardealers,etc.). Buildinganewnuclearplantwouldresultinthecreation of1,400to1,800jobsduringconstruction,withpeak employmentashighas2,400jobs.
NuclearPlantEconomicBenefits Eachyear,theaveragenuclearplantgenerates approximately$430millioninsalesofgoodsandservices (economicoutput)inthelocalcommunityandnearly$40 millionintotallaborincome.Thesefiguresincludeboth directandsecondaryeffects.Thedirecteffectsreflectthe plantsexpendituresforgoods,servicesandlabor.The secondaryeffectsincludesubsequentspendingattributable tothepresenceoftheplantanditsemployeesasplant expendituresfilterthroughthelocaleconomy (e.g.,restaurantsandshopsbuyinggoodsandhiring employees). Analysisshowsthateverydollarspentbytheaverage nuclearplantresultsinthecreationof$1.07inthelocal community.
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Theaveragenuclearplantgeneratesalmost$20millionin stateandlocaltaxrevenueannually.Thesetaxdollars benefitschools,roads,andotherstateandlocal infrastructure.Theaveragenuclearplantgeneratesfederal taxpaymentsofapproximately$75millionannually.
AffordableElectricityProduction
Nuclearpoweristhelowestcostproducerofbaseload electricity.Averagenuclearproductioncostshavedeclined morethan30percentinthelast10years,toanaverageof 2.0centsperkilowatthour.Thisincludesthecostsof operatingandmaintainingtheplant,purchasingnuclearfuel andpayingforthemanagementofusedfuel.
NewNuclearPlantConstructionWillBoostLocal,State Economies
Nuclearpowerplantsprovidesubstantialeconomicbenefits duringtheirdecadesofoperation.Thejobs,taxes,and directandsecondaryspendingstrengthentheeconomiesof communitieswithnuclear plantsandwillgiveasimilar boosttoanycommunity hostinganewnuclear plant. Anewnuclearplant representsaninvestment of$6billionto$8billion includinginterest, dependingonplantsize. Constructionofanew nuclearpowerplantwill provideasubstantialboost tosuppliersofcommodities likeconcreteandsteeland manufacturersofhundreds ofcomponents.For example,asinglenew nuclearpowerplant requiresapproximately:
Comparedtocoal,naturalgasandrenewableenergy sources,nucleargeneratedelectricityhastremendousprice stabilitybecauseonly28percentofproductioncostsare fuelcosts.Fuelaccounts for80percentto90 percentofthecostof electricityproducedby fossilfuelfired generation,making electricityfromfossil plantshighlysusceptible tofluctuationsincoaland gasprices. Thelowandstablecostof nuclearpowerhelps reducethepriceof electricitypaidby consumers.

What'sDrivingInterest inNewNuclearPlants? Concernsaboutrising NuclearOperatorsWorkinginaControlRoom electricitydemandand cleanairareamongthefactorsdrivinginterestinnew 400,000cubicyardsofconcreteasmuchconcreteas nuclearplants.Nuclearenergyistheonlyelectricitysource wasusedtobuildthePentagon; thatcangenerateelectricity24/7reliably,efficientlyand withnogreenhousegasemissions. 66,000tonsofsteelthesameamountusedtobuild theEmpireStateBuilding; ElectricityDemand 44milesofpiping; TheU.S.DepartmentofEnergyprojectsthattheUnited Stateswillneed24percentmoreelectricityby 300milesofelectricwiringenoughtostretchfrom 2035.Worldwide,theInternationalEnergyAgencyreports BostontoPhiladelphia;and thattheglobalsurgeintheuseofconsumerelectronicssuch asflatscreenTVs,iPodsandmobilephoneswilltriple 130,000electricalcomponents. electricityconsumptionby2030to1,700terawatthours. Thatistheequivalentofhomeelectricityconsumption Seventeencompaniesandconsortiaareconsideringbuilding todayintheUnitedStatesandJapan. asmanyas32newreactors,representinganinvestmentof approximately$190billionto$250billion.
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CleanAir Concernaboutairpollutionisleadingtoincreasinglytight restrictionsonemissionsofsulfurdioxide,nitrogenoxides andmercury.Thefederalgovernmentalsoisconsidering regulationofemissionsofcarbondioxide,theprinciple greenhousegas.Nuclearenergyaccountsfornearlythree quartersoftheU.S.electricgenerationthatemitsnoneof these. ExcellentPerformance Thenations104nuclearpowerplantsoperateathighlevels ofsafety,reliabilityandaffordability.Resultsfromthe NRCsreactoroversightprocess,postedontheagencys Website,showconsistentlyhighsafetyperformanceacross theindustry. Theaveragecapacityfactorfornuclearplantsameasure ofreliabilityhasaveragedaround90percentsince2000. Inaddition,nuclearplantsareamongthelowestcost electricityproviders,producingelectricityforabouttwo centsperkilowatthour.
PriceVolatility Naturalgasfuelsnearlyalltheelectricgeneratingcapacity builtinthepast10years.Thenationhasplaced unsustainabledemandonthenaturalgassupply,andthat meanscontinuingvolatilityinprices. AmericanPublicSupportsNuclearEnergy AnationalsurveyconductedbyBiscontiResearchInc. inFebruary2011foundahighlevelofsupportfornuclear energyamongthepublic,with71percentsayingtheyfavor nuclearenergyasonewaytogenerateelectricityand84 percentsayingtheybelievenuclearenergywillplayan importantroleinmeetingU.S.electricityneedsintheyears ahead.
AboutNuclearEnergyInstitute
TheNuclearEnergyInstitute(NEI)isthepolicyorganizationof thenuclearenergyandtechnologiesindustryandparticipates inboththenationalandglobalpolicymakingprocess.NEIs objectiveistoensuretheformationofpoliciesthatpromotethe beneficialusesofnuclearenergyandtechnologiesintheUnited Statesandaroundtheworld.TheNuclearEnergyInstitute,with memberparticipation,developspolicyonkeylegislativeand regulatoryissuesaffectingtheindustry.NEIhasnearly350 membersin19countries.Members'businessesspantherange ofcommercialnucleartechnologies.TheNuclearEnergy Institute,withmemberparticipation,developspolicyonkey legislativeandregulatoryissuesaffectingtheindustry.
U.S. Nuclear Industry Capacity Factors

1971 2009, Percent
Source: Energy Information Administration Updated: 5/10
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Energy Research & & Development
American Association of Petroleum Geologists

Mostenergyexpertsagreethatinthecomingdecadesthe UnitedStatesenergysupplieswillcomefromincreasingly diversesources.Newandalternativeenergywill supplementexistingconventionalenergytomeetconsumer needs,anddoitataffordableprices. Thisdiversificationisagoodthing,becauseitreducesour relianceonanysingleenergysourceandtherebyenhances ournationsenergysecurity. Itisscienceandtechnologythatwillpavethewayforthis energyfuture.Sciencebreakthroughsandtechnological innovationshelpidentifynewenergysources,drivedown thecostsofgeneratingalternativeenergyandensurethe availabilityofconventionalenergy. Thislastpoint,however,isfrequentlyoverlooked.Thereis muchtalkinWashington,D.C.abouttheneedforfederally fundedresearchanddevelopment(R&D)fornewenergy researchandthatisvitallyimportant.Butwhatisnt talkedaboutistheR&Dandinnovationrequiredtomaintain ourproductionofconventionalenergysources. Theseenergysources,includingoilandnaturalgas,arewhat keepthelightsonandthewheelsofcommerceturning. Theyremainplentiful,evenhereintheUnitedStates,and arethefoundationofournationsenergyfuture. HowimportantisfederalR&D? Well,notlongagomarketanalystswereconcernedthatthe UnitedStateswasrunningoutofnaturalgas.Todaythat thinkinghaschanged,thankstobothgeologicalingenuity andtheapplicationoftechnologies,suchashorizontal drillingandhydraulicfracturing,whichhaveopeneda significantnewnaturalgasresourcefromshales.
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TheDepartmentof Energy(DOE)playedan importantroleinthe developmentofthese technologies,providingthelongterminvestmentinhighly educatedandcreativepeopleandtheirtechnicalsupportto enablethesebreakthroughs.Thankstothetechnologies deployedbyoilandnaturalgasproducers,thisnewsupply ofshalegashastransformedtheU.S.naturalgasmarket overthepastfiveyears. Bywhycanttheprivatesectordothisitself? Contrarytocommonbelief,mostoftheoilandnaturalgas producedintheUnitedStatesisnotproducedbythelarge verticallyintegratedmajors.Thesemultinational corporationsnotonlyfindanddevelopoilandnaturalgas; theyalsorefine,processandmarketpetroleumproducts. Frequentlytheyconducttheirownresearchprogramsto givethemacompetitiveadvantageoverotherproducers. Thefactisthatmostoftheoilandnaturalgasproducedin thiscountryisfoundanddevelopedbyindependentoil andnaturalgasproducers.AccordingtotheIndependent PetroleumAssociationofAmerica(IPAA),afellowCEA affiliate,independentsproduce54percentofthenations oil,85percentofthenationsnaturalgasanddrill90 percentofthenationsoilandnaturalgaswells. Theseindependentproducerscreatejobs,paytaxesand supplyAmericanconsumerswithmuchneededenergy.And whiletheyrangeinsizefromonepersonfirmstolarge corporations,themedianfirmistheepitomeofsmall business:Inbusinessfor26yearswithannualgross revenuesofnearly$8million,employing11fulltimeand3 parttimeemployees,accordingtoIPAAs2009Profileof IndependentProducers.
Scienceandtechnologyalonearenotenoughtobring domesticoilandnaturalgasresourcestomarket. Independentsneedaccesstoland,includingpubliclands,to locatenewreserves,andtheyneedtaxandregulatory policiesthatencourageoilandnaturalgasproduction.But astheshalegasplaydemonstrates,R&Disavital componentandamajorsourceofU.S.competitiveness. Independentsneedadvancementsinscientificknowledge, technologydevelopmentandpoliciesthatimprovetheir abilitytodotwocriticalthings:(1)extractmoreoilfromold reservoirsthathavebecomeuneconomicforlarge companies,and(2)exploreforandproducenewpetroleum pools,manyofwhicharetoosmalltointerestmajor companies. Lowproductionwellsandsmallfieldsarenotinterestingto largecompanies,buttheyaretoindependents. Forexample,oilfieldsinsoutheastKansas,manyofwhich aremorethan80yearsold,stillproduceoil.Butmanyof theproducingwellsarestripperwells,yieldingonly12 barrelsofoilperday.Largecompaniescannotmake economicreturnsontheirinvestmentatthatscale;but manysmallerindependentscananddo. Similarly,threedimensionalseismichasenabled independentstoidentifyverysmallpetroleum accumulations,whichcanbeproducedthroughasingle well.Beingabletobetterimageanddelineateafeature usingtechnologyenablesindependentstobemoreefficient intheirdrilling,savingthecostsofdrillingadditional, unnecessarydevelopmentwells. Conversely,ifasmallindependentdiscoversalargenew resource,requiringsignificantcapitalinvestmenttodevelop, theytypicallysellthattoalargercompany.Suchisthecase withtheBakkenplayinNorthDakota. Whatisimportanttorealizeisthatthesamecharacteristics thatenableindependentstosuccessfullyoperateinalow marginenvironmentbynecessitylimittheirinvestmentsin internalresearch.Asaresult,thegroupresponsiblefor deliveringthemajorityofdomesticoilandnaturalgasto U.S.marketsisdependentonothersfornewscientific knowledgeandtechnology.
TheR&Dsupportedbyfederalprogramssuppliesthese breakthroughs.Italsoprovidesmuchneededsupportfor thenationsresearchuniversities,facultyandstudents. Thenextgenerationworkforceisinshortsupplyinmany energysectors,includingoilandnaturalgas,coaland nuclear.Togetherthesesourcesrepresent93percentof ournationsenergyconsumption.Andmanyofthese workersareeithereligibleforretirementorwillbeinthe nextfewyears. Inordertobetterunderstandtheenergyworkforce situation,theNationalResearchCouncilhaslauncheda studyoftheavailabilityofskilledworkerstomeetthe energyandmineralsecurityrequirementsoftheUnited States.TheCouncilislookingattheemergingworkforce trendsintheenergyandmineralssectors,inbothentrylevel andseniorpositions,toidentifythechallengesand recommendactionstoensuretheUnitedStateshasthe energyworkforceavailabletomeetitsneeds. Science,innovationandpeoplearethreeessential ingredientstoasecureenergyfuture.Weneedthemin newandemergingenergysourcesaswellasthe conventionalenergyfoundationthatsupportsourcontinued economicvitality. Technologypropelsournationssearchforenergy.Federal R&Dinvestmentforbothnewandconventionalenergy sourceswillresultinplentiful,reliableandaffordableenergy fortheAmericanpeople.Findingandproducingthatenergy willcreatewellpayingjobsandeconomicvaluetosupporta vibrantsociety.
AboutTheAmericanAssociationof PetroleumGeologists
TheAmericanAssociationofPetroleumGeologists(AAPG)isthe worldslargestscientificandprofessionalgeological association.ThepurposeofAAPGistoadvancethescienceof geology,fosterscientificresearch,andpromotetechnology. AAPGhasmorethan34,000membersaroundtheworld,with roughlytwothirdslivingandworkingintheUnitedStates. Theseindividualsaretheprofessionalgeoscientistsinindustry, government,andacademiawhopractice,regulate,andteach thescienceandprocessoffindingandproducingenergy resourcesfromtheEarth.
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Retirees
60 Plus Association
Whenenergypricesspikeupwardof50percentormorein lessthanayear'stime,America'sseniorsfeelthepinchand painasseverelyasanyotherdemographic.Amajorityof those65andolderliveonfixedincomesandcannotabsorb thetremendousfinancialburdenofskyrocketingenergy costswithoutsignificantfearandworrytotheirmonthly budgets. SincePresidentObamatookoffice,thepriceofabarrelof crudeoil,aswellasthepriceofgasolineatthepumphas morethandoubled.Highgasandfuelpricesarenotthe onlyexpensessiphoningthepocketsofseniors,asevery productthatconsumesenergytogettomarketalso becomesmorecostly,mostnotablyfoodandmedicine. Inrecentyearstherapidriseinenergypriceshasbeen accompaniedbystudiesshowingthatseniorswillreducethe amountoffoodtheypurchaseandfrequentlygohungryasa consequence,andthedoublingofenergypricesduringthe Obamaeraisnoexception. Energycoststakeamuchbiggerbiteoutofthedisposable incomeforhouseholdsmakinglessthan$50,000peryear. Thecripplingburdenofhighfuelpricesonpoorandeven middleincomeseniorscanmeangoingwithoutmedication, limitsonvisitingfamily,anddifficultystayingcoolinthe summerandwarminthewinter.Forseniors,thecostof energyisn'tacasualconcernitisoftenabouttheirvery survival. Newsstoriesofseniorsunabletopaygrocerybillsorbuy medicinearebecomingfartoocommonplaceinthepast year.Gashoveringaroundfourdollarspergallonhadone Georgiawomaninthenewsforegoingherulcermedicine andinhalerinordertofillhertank,andsheisfarfrom alone. AccordingtoaMay2011poll donebyGallupGfK,41 percentoffamiliescalledthe risinggaspricesa"serious hardship"totheirfinancialwellbeing.Forseniors,itis worse,with76percentexpressingfinancialhardshipover gasprices.Thishardshipspreadstothosehelpingseniorsas well. SeniorassistanceprogramssuchasMealsonWheels,which ensuresthatthousandsofseniorsreceiveanutritiousmeal eachday,islosingvolunteersasthemileagereimbursement rateiscausingafinancialstrainonthoseusingtheirvehicles todelivermeals.SeniorsareAmerica'ssilenthungryand decreasedmealdeliveryinevitablyresultsinmore malnourishedseniors,andmoreelderlystarvingtodeath. Thesameproblemisspreadingtonursinghomes,where volunteerscannolongeraffordtodriveseniorstodoctor appointmentsandvisitthepharmacy. OnewouldthinkthatthiswouldbeunthinkableinAmerica today,butsadlythisisbutoneofthetragichumancoststo anationalenergypolicywhichdoesnotfocusonmaximizing domesticenergyproduction,butinsteadleavesus vulnerabletowildswingsinenergypriceswitheachnew internationalconflict. YetthethreattoAmerica'sseniorsdoesnotendthere. PresidentObamahasproposedacuttotheLowIncome HousingEnergyAssistanceProgram(LIHEAP)intherangeof between$2.5to$3billionperyear,furtherexacerbatingthe direcircumstancesofAmerica'smostvulnerablecitizens. Andwithpovertyrisingamongseniors,thiscutisespecially illtimed.Factorinthatseniorshavenotreceivedacostof livingincrease(COLA)totheirSocialSecuritybenefitsforthe pasttwoyearsanditisclearwhythesuddenandsizable
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jumpinenergycostscreatesafullblowncrisisforthose60 andolder. Thesolutionliesintheobviousandincommonsense: increasedomesticenergyproductionsothatgreatersupply canlowerthecostofenergyonconsumers. Asithappens,theU.S.DepartmentoftheInteriorestimates thattherearecurrently85.9billionbarrelsofoiland420 trillioncubicfeetofnaturalgasavailableintheU.S.Outer ContinentalShelf(OCS)enoughoiltoproducegasolineto run192millioncarsandheat78millionhomesfor15years. AndtheAtlanticOCSwhichhasneverbeenleasedfor explorationorproductionofoilandnaturalgasis estimatedtocontainanywherefrom1.12billionto7.57 billionbarrelsofoilandfrom14.30trillionto66.46trillion cubicfeetofnaturalgas. Withsuchalargecapacityofresourcesavailabletothe UnitedStates,itdoesntmakesenseforAmericansto continuedependingonforeignfuelimports,sendingour dollarsoverseastonationsthatareoftenhostiletoour economicandnationalsecurityinterests. Withsuchampleresourceswithinarm'sreach,onewould thinkthatourleaderswouldlineupinsupportofthe thoughtfulutilizationofournationsabundantresourcesby exploringinnovativewaystoleverageAmericasvastand diverseenergysupplies.Unfortunately,thisrealitycouldnot befurtherfromthetruth. InsteadthefederalgovernmentundertheObama Administrationhasbeenrestrictingaccesstoourdomestic energysupplyintheOuterContinentalShelfandholdingup viablepermitstoitsleaseholderstodrillinareasoffshore thathavealreadybeenleasedforthatpurpose.Meanwhile, Cubahasbeensellingoffshoreleasestoforeignnationsand companiessothattheymayonedaydrillintheveryGulf thattheAdministrationhasrestrictedhereathome.Toall ofusconcernedaboutprotectingourenvironment,our handswillbetiedtoregulateandensureenvironmentally soundpracticeswhennonU.S.companiesslantdrilland drainawayAmericasresources. Thebottomlineisobvioustothevastmajorityofseniors andallAmericanswhooverwhelminglysupportdeveloping
ourownresourcesandkeepingdollarsandjobsathome. Untilthefederalbureaucratschangecourse,this tremendouseconomicopportunitywillremainunderlock andkeyevenasskyrocketinggaspumppricescontinueto rattleAmericanconsumersandbusinesses.Mostindustry analystsexpectgaspricestosurpass$5pergallonsome timethissummer,whichwillbeyetanothercrushingblow toseniors. ItstimeforourleaderstogetseriousaboutU.S.energy independenceandtoseizeontheopportunitiesavailableto usrightnowhereinAmerica.InlateMarch, CongressmanDocHastings(RWA)introducedthreebills: thePuttingtheGulfBacktoWorkAct(H.R.1229),Restarting AmericanOffshoreLeasingNowAct(H.R.1230)and ReversingPresidentObamasOffshoreMoratoriumAct(H.R. 1231).Thesebillsdeserveseriousconsiderationandwill hopefullybeenactedintolaw. InMayof2011,the60PlusAssociationsChairmanJim MartintestifiedbeforeCongressmanHastingsNatural ResourcesCommittee.60Plus,foundedin1992,isa nationalseniorsorganizationcommittedtoaffordable energyforallAmericans,andaproudmemberofthe ConsumerEnergyAlliance(CEA)ledbyPresidentDavidHolt. CEAwasformedtohelpsupportthethoughtfulutilizationof alldomesticenergyresourcestoimprovedomesticenergy securityandreduceconsumerprices,aswellasimprove consumerunderstandingofournationsenergysecurity, andtheneedtoreducerelianceonimportedoilandnatural gas.60PlusisanenthusiasticparticipantinCEAsadvocacy efforts,astheirplatformworkstorealizereasonableenergy pricesforconsumers,anddiversityinAmericasenergy resources. AnAmericathatismoreenergyindependentwillerasethe incentivesofoiltraderstospeculateinfavorofhigheroil prices.Coupledwithincreasingsupply,thiswillnaturally servetopushthecostofenergydown.Lowerenergycosts helpseniorsinabsolutelyeveryaspectoftheirlivesand haveapositiveimpactontheirhealthcareaswellasoverall wellbeing.Lowerpriceswillprovidereliefandlessenthe costofLIHEAP,eliminatingtheneedtocutitsbudgetand exposeseniorstothewhimsofextremetemperature swings.
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Weoverwhelminglysidewitheconomicgrowthandenergy independence,whichisthebestprescriptionforAmerica's seniorswhoaredeeplyhurtingundertheObamaenergy spike.Theonlyprovenandsensiblewaytoreduceenergy costsonseniorsistoincreasesupply,whichmeansan aggressiveandpracticalapproachtodomesticenergy exploration. About60PlusAssociation
The60PlusAssociationisanonpartisanseniors advocacygroupwithafreeenterprise,less government,lesstaxesapproachtoseniorsissues, andastrictadherencetotheConstitution. Sinceitsfoundingin1992,60Plushasbeenviewedasthe conservativealternativetotheAmericanAssociationofRetired Persons(AARP). Now19yearsold,60Plushasgrowntoover7millionactivists nationally.Theseactivistsmake60Plusahardhitting organizationnowleadingthefightinCongresstoprotectthe taxrightsofseniors,torepealthemostconfiscatoryofalltaxes theinheritanceorestate(death)taxandamyriadofother issuesthataffectseniorsrangingfromhealthcare(Obamacare) toenergysecurity.
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Alternative Fuels
Sasol
Aspolicymakersworktoaddressourgrowingdemandfor energy,allformsoftechnologyandresourcesneedtobe sustainablyharnessedtoincreaseproductionandsupply, lowercostsandstrengthenenergysecurity. Onewaytodosoistoemploystateofthearttechnologyto producesyntheticfuelsfromnaturalgasabundantinNorth America. Notonlyisnaturalgasacleansourceofenergytogenerate electricity,butthisfeedstockcanbeconvertedtoclean burningfuelswithnumerousbenefitsfortheenvironment, economyandnationalsecurity. Andduetonewexplorationanddrillingtechnologies,the amountofnaturalgasavailableforproductionintheU.S. hassoaredby58%overthelastfouryears,makingsynthetic fuelproductionfromnaturalgasanattractiveoptionto utilizetheseresourcestomeetourtransportationfuel needs. CEAmemberSasol,anintegratedenergyandchemicals company,hasproducedsyntheticfuelsfrombothcoaland fromnaturalgasusingtheirproprietaryFischerTropsch technologyforover60years.Gastoliquids(GTL)fuel includesGTLdiesel,naphtha,liquefiedpetroleumgas,jet fuelandchemicalfeedstock. WithheadquartersinJohannesburg,SouthAfrica, operationsin38countriesandaworkforceofnearly35,000, SasolcurrentlyoperatestheOryxGTLfacilityinajoint venturewithQatarPetroleuminQatar. SasolhaspartneredwithTalisman,aCanadianoilandgas explorationandproductioncompany,forshalegas productioninBritishColumbiaandmostsignificantly,to explorethepotentialtobringGTLtechnologytoNorth Americaforthefirsttime. Projectsofthisnatureprovideastrongvehicleforjob creation,strengthenedenergyandnationalsecurityand environmentalstewardship. AnaverageGTLfacilityisexpectedtosupport600 permanentjobs,inadditiontosignificant constructionandindirectjobs.Localcommunities willalsogainmuchneedednewtaxrevenueand economicstimulus;
GastoLiquidsFacilityatNight
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GTLfuelsarevirtuallyfreeofsulfurandaromatic compoundsandreduceemissionsofparticulates, nitrogenoxides,carbonmonoxideandotherpollutants, helpingtomeetemissionmandates. GTLfuelscanbeusedindieselandjetenginesand transportedutilizingexistingtankersandpipelines.
Syntheticfuelsproducedfromnaturalgascanplaya meaningfulroleindiversifyingandstrengtheningourenergy supply.ItsimportantthatCEAmembersenergy producers,suppliersandconsumersalikeworktogether withpolicymakerstoenactmeaningfulandresponsible energypolicythatfullyutilizesourdomesticenergy resources,leadingtoacleaner,moresecureenergyfuture forournation. AboutSasol
Sasolisaworldleaderinthecommercialproductionofliquid fuelsandchemicalsfromcoalandnaturalgas.Withoperations in38countriesandaworkforceofnearly35,000worldwide,the companyproducesmorethan200fuelandchemicalproducts. HeadquarteredinJohannesburg,SouthAfrica,Sasolislistedon theJohannesburgSecuritiesExchangeandtheNewYorkStock Exchange. Readmoreatwww.Sasol.com.
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Conclusion
EnergyhasbecomethefocalpointforAmericanconsumers, businesses,electedofficialsandgovernmentbureaucrats. Highoilpricesin2011andapooreconomicoutlookhave dominatedheadlinesandforcedmillionsofAmericansinto somechallengingsituations. Withglobalenergydemandprojectedtorisemarkedlyover thecomingyears,energysupplieshavebecomeincreasingly constrictedandsubjecttosignificantpriceswings.Many groupswhorepresentvitalsectorsoftheU.S.economy agreeandarticulateinthispublicationthatpricevolatility negativelyaffectstheirbusinessoperations,ultimately threateninginvestmentandgrowth. Unstableenergysuppliesandescalatingpricesareonlya fewofthemanymaelstromscausedbylackofanational energypolicy.TheballooningU.S.tradedeficitisdueinpart tothesignificantamountofoilwemustimporttomeetour needsnearly50percentoftheoilwecurrentlyconsumeis imported.Inaddition,recentgeopoliticaltensionsoverseas exacerbatetheproblemofbeingtoodependentonforeign sourcesofenergyfromunfriendlycountries. Nonetheless,therearerealsolutionsthatpolicymakerscan pursuethatwillincreaseenergyproduction,reducevolatility inenergymarketsandprovidestablepricesforconsumers. ConsumerEnergyAlliance(CEA)anditsmorethan160 affiliatedmembersandhundredsofthousandsofgrassroots supportershavelongadvocatedthattheUnitedStates needsanationalenergypolicythatprovidesa comprehensivesolution. Asthisreporthasshown,Americaneedsmoredomestic energyproductionifwewanttomaintainourcompetitive edgeandcontinuetogrowoureconomyinthe21stcentury. Thefollowingareoptionsavailabletopolicymakerstoday thatwouldhelppromoteenergysecurityandalsoguarantee stableenergypricesforconsumerswellintothefuture.
ResponsibleAccesstoallDomesticEnergyResources
Removeunnecessarybarrierstoonshoreandoffshore energydevelopment; Ensuregreaterregulatorycertaintyforproducersso thattheymayestablishthelongterminvestmentsand planningneededtoharnessourenergyresources;and Promotetechnologicaladvancesintheexplorationof traditionalandalternativeenergyresourcestoensure furthergainsinenvironmentalstewardship.
DevelopmentandUseofallEnergyResources,including Nuclear,RenewableandAlternativeEnergyResources:
Permitfinancialguaranteesfornewnuclearfacilities andsupporttheexpansionofnuclearenergyasa reliablesourceofelectricity; Recognizethelongtermdevelopmentofthese resourcesbycreatingrealisticalternativeenergy productionpoliciesandfeasibletimelines;and Streamlinethepermittingprocessestoencouragethe creationofnewandimprovedalternativeand renewableenergyproductionfacilities,including productionfromwind,solar,andhydropower.
AdvancedEnergyEfficiency,Conservationand Sustainability:
Establishandsupportpoliciesthatincentivize investmentinenergyimprovementsandenergy efficientproducts,ultimatelyincreasingconsumer demandforsuchmeasures,curbingenergy consumptionandreducingourenvironmentalfootprint; and Ensureindustryreceivesproperresourcesandsupport toresearch,developandmarketproductsorimplement practicesaimedatexpandingsustainability.
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ExpandedEnergyEducation: Furtheroutreachandeducationtoconsumersabout wheretheirenergycomesfrominordertoestablish greaterawarenessandlaythefoundationfora productivepublicdialogue;
DevelopacomprehensiveU.S.programaimedat maintainingU.S.intellectualcompetitivenessthrough theeducationofskilledscientists,engineersandtrade professionalswhoareneededtoensureavibrantand progressiveenergyindustry.
CEAbelievesthatthesepoliciesandprograms,inconcert withprivatesectorcollaboration,willenhanceU.S.energy andeconomicsecuritybyprovidingstable,affordable energyforstrugglingAmericanconsumers.
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Acknowledgments
ConsumerEnergyAllianceisextremelygratefultoallofour affiliatedmemberswhoparticipatedincreatingthis publication,Energy,Jobs&theEconomy:PoweringAmer icasFuture.Togetherwithourmembers,webelieveit providestangibleevidencethatanonpartisan,comprehen siveapproachisneedednowtohelpmeetfurtherenergy demand,maintainreasonablepricesforconsumersand growoureconomy.
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Energy, Jobs, and The Economy: Powering America's Future

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Energy, Jobs & the Economy: Powering Americas Future

Who is Consumer Energy Alliance?

ConsumerEnergyAlliance(CEA)isanindependent, nonprofit,nonpartisanorganizationwhosemissionisto expandthedialoguebetweentheenergyandconsuming sectorsandtoadvanceabetterunderstandingofenergy security.CEAadvocatesforthethoughtfuldevelopmentand utilizationofenergyresourcesinordertohelpcreatea

balancedenergypolicyandmaintainstablepricesfor consumers.CEAhas161affiliatedmembersfromairlines totruckingtomanufacturingtoenergyproducersand nearly300,000individualconsumeradvocates.CEA appreciatesthesupportitreceivesfromitsaffiliate membersandisproudtorepresentthem.

Inparticular,thefollowingpageswilldiscusshow: TheU.S.steelindustryconsumed14.6milliontonsof coalandcoke,214billioncubicfeetofnaturalgasand 36.4billionkilowatthoursofelectricityin2009.In ordertoreduceitsenergycosts,theindustryhas lowereditsenergyintensityby30percentsince1990.

American Trucking Associations

American Iron and Steel Institute

Inaddition,thesteelindustryintheUnitedStateshasthe lowestenergyconsumptionandlowestCO2emissionsperton ofproductionofanysteelproducingindustryintheworld.

Oil & Gas Development

American Petroleum Institute

Promotepoliciesandaregulatoryenvironmentthatwill supportthegrowthandfreetradeofCanadianoil sands,areliable,safeandreadilyavailableenergy source,includingtheapprovalofkeypipelineprojects thatwillhelpcreatejobsinboththeUnitedStatesand Canada.

Air Transport Association

Unfortunately,fuelhedgingprogramsareincreasingly expensiveandprovideonlylimitedprotectionwhenjetfuel pricesareoutpacingcrudeoilprices.Consequently,airlines havebeenforcedtoreducethelevelofairservice,as demonstratedbythefollowingcharts:

Note:Valueinparenthesesisaveragepricepaidpergallonexcludingtaxes, intoplanefees,pipelinetariffsandhedgingcosts;Sources:ATA,Energy InformationAdministrationandDOT(forU.S.passengerandallcargoair

Whenjetfuelpricesriserapidly,airlineshavelimited optionstomitigatethesecosts,principallygeneratingmore revenueordecreasingnonfuelexpenses.Asfuelprices increase,flightsbecomelessprofitablesoairlinesmayalso reducecapacity,andsomecarriersalreadyhavereported downwardgrowthplans.

ScheduledU.S.andnonU.S.airlineflightsdepartingU.S.airportsfornonU.S. destinations Source:Innovata(viaAPG)publishedschedulesasofMay27,2011

American Public Power Association

MaximumAchievableControlTechnologyStandardsfor HazardousAirPollutants; CleanAirTransportRule1; CleanAirTransportRule2; CoalCombustionResiduals(CCR)DisposalRule; CleanWaterActEffluentGuidelines; GHGPreventionofSignificantDeterioration(PSD) PermittingRequirements;and

BasedinWashington,DC,APPAisthenationalserviceorganiza tionforthenationsmorethan2,000communityandstate ownednotforprofitelectricutilitiesserving46million customers.

National Association of Manufacturers

The Business of Chemistry

American Chemistry Council

17,000newjobsintheU.S.chemicalindustry; $32billionincreaseinU.S.chemicalproduction; $16.2billioninnewcapitalinvestmentbythechemical industrytobuildnewpetrochemicalandderivatives capacity;

Stateoversightofhydraulicfracturingisappropriate sincestategovernmentshavetheknowledgetooversee theprocessintheirjurisdictions. Theuseofvariousproductsofchemistryinhydraulic fracturingmustbetransparentwhileprotecting proprietaryinformation.

ACCsupportsacomprehensiveenergypolicythatpromotes energyefficiencyandconservation,energydiversity,and expandeddomesticoilandnaturalgassupply,onshoreand offshore. FormoreinformationaboutACCsreport,pleasevisit www.americanchemistry.com/Policy/Energy/ShaleGas

Independent Oil & Gas Production

Independent Petroleum Association of America

Thisstudy(combinedwithanearlier,similarIHSstudyon offshoreindependents)hasrevealedthatindependents collectivelyproduce54percentofU.S.oiland85percentof Americasnaturalgas,accountingfor67percentoftotalU.S. productionofoilandnaturalgasresources. WhatDoesThisMeanfortheNation?

Agriculture & Fertilizer

The Fertilizer Institute

Offshore Energy Development

National Ocean Industries Association

American Highway Users Alliance

Nuclear Energy Institute

Theaveragenuclearplantgeneratesalmost$20millionin stateandlocaltaxrevenueannually.Thesetaxdollars benefitschools,roads,andotherstateandlocal infrastructure.Theaveragenuclearplantgeneratesfederal taxpaymentsofapproximately$75millionannually.

U.S. Nuclear Industry Capacity Factors

Source: Energy Information Administration Updated: 5/10

Energy Research & & Development

American Association of Petroleum Geologists

GTLfuelsarevirtuallyfreeofsulfurandaromatic compoundsandreduceemissionsofparticulates, nitrogenoxides,carbonmonoxideandotherpollutants, helpingtomeetemissionmandates. GTLfuelscanbeusedindieselandjetenginesand transportedutilizingexistingtankersandpipelines.

ExpandedEnergyEducation: Furtheroutreachandeducationtoconsumersabout wheretheirenergycomesfrominordertoestablish greaterawarenessandlaythefoundationfora productivepublicdialogue;

DevelopacomprehensiveU.S.programaimedat maintainingU.S.intellectualcompetitivenessthrough theeducationofskilledscientists,engineersandtrade professionalswhoareneededtoensureavibrantand progressiveenergyindustry.

CEAbelievesthatthesepoliciesandprograms,inconcert withprivatesectorcollaboration,willenhanceU.S.energy andeconomicsecuritybyprovidingstable,affordable energyforstrugglingAmericanconsumers.

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