Jack N.

Gerard
President & Chief Executive Officer 1220 L Street, NW Washington, DC 20005·4070 USA (202) 682·8500 Telephone Fax (202) 682·8110 Email gerardj@apLorg www.apLorg

November 30, 2011

The Honorable Edward Markey Ranking Member, Committee on Natural Resources U.s. House of Representative Washington, D.C. 20515 Dear Representative Markey:

Thank you for the opportunity to again highlight the critical role America's oil and natural gas industry plays in our economy and how we can do even more for American workers and families through the safe and responsible production of additional domestic resources. As I mentioned in my letter to you September 21, 2011, some of your questions demonstrate the very misunderstanding of important facts regarding the U.S. oil and natural gas industry that explains precisely why the American Petroleum Institute is engaged in a public education program; our industry is an important driver of economic growth and job creation, we provide significant revenue to the government, and we receive no subsidies, unique tax credits or deductions. The facts on these issues, and more, are outlined below in our numbered responses to your specific questions. The critical point, however, is that the benefits our industry can bring in job creation, economic growth and energy security require common sense policy choices from Congress and the administration. I hope we can work with you and your colleagues in the Congress and the administration to bring those potential million new jobs into reality, and with it, significant revenues to fund important government programs. Following are the specific responses requested: 1) The BLSstatistic that you reference is a narrow definition of employment that only takes into account salaried employees for oil and natural gas extraction. The stated 165,000 employment number excludes Support Activities for Oil and Gas and Drilling of Oil and Gas Wells and does not include proprietor or selfemployment. A 2011 PricewaterhouseCoopers (PWC) study commissioned by API estimates that direct employment in U.S. oil and natural gas upstream' was approximately 781,700 in 2009. The PWC study is consistent with Bureau of Economic Analysis (BEA) industrial input/output tables which are the basis for a large fraction of all published economic impact studies for all types of industries.

1 The U.S. upstream includes Oil and Gas Extraction (NAICS code 211), Drilling of Oil and Gas Wells Support Activities for Oil and Gas Operations (NAICS code 213112)

(NAICS code 213111) and

An equal opportunity

employer

-2While the BLSfigures include only direct employment, the Wood Mackenzie study clearly separates direct

and indirect/induced employment. The main focus of the Wood Mackenzie analysis was to estimate incremental differences in total employment due to potential pro-development policy changes. The estimated indirect and induced jobs that could be created by pro-development policies are actually quite conservative given that the multiplier used by Wood Mackenzie is significantly lower than published BEA employment multipliers relevant to the oil and natural gas industry. (See item #4.) Our ads refer to total jobs supported, rather than simply direct job creation, because the full macroeconomic effect of economic investment goes well beyond direct employment. Not only is this concept accepted by almost all mainstream economists, but Dr. Wassily Leontief won a Nobel Prize for developing the input-output methodology that includes this effect. In fact, most recent estimates of jobs impacts, including estimates of the administration's recent jobs proposal, include direct, indirect and induced effects in their calculations. Regarding the New York Times Magazine quote, I respectfully disagree. As explained above, your quote of 165,000 jobs in the upstream oil and natural gas sector is a significant underestimate as it does not include support activities, drilling, or proprietorships/self employed; so your assertion is based in part upon an incorrect base level of employment. In our current troubled economic period, to argue that well over one million new American jobs "would not make a real dent" simply does not stand up to scrutiny and seems both callous and irresponsible. I question whether the 25 million un- or under-employed Americans they reference would share the Times' view. Also, the U.S. oil and natural gas industry's significant role in stimulating overall economic growth is overlooked -- $470 billion to the U.S. economy in spending, wages and dividends in 2010, more than half the size of the 2009 federal stimulus package. And it is not clear that you fully appreciate the total size of investment that would be forthcoming by more fully developing America's oil and natural gas resources, cumulative capital investment from 2012 through 2030 could equal $459 billion.' This investment combined with a conservative employment multiplier (as explained above) results in a conservative estimate of the employment 2) impact.

Again, Wood Mackenzie, a respected international energy consulting firm, and BLSassume differing scenarios in their analysis. Wood Mackenzie projects incremental job increases given pro-development policies (relative to a "current policy" baseline), while BLS' projection does not include potential employment gains from expanded access or recent breakthroughs in producing oil and natural gas from shale (and the anticipated resultant employment increases). In fact, the "current path" baseline in the Wood Mackenzie study projects continued modest increases in employment without changes to domestic energy policy. If the BLS projection is used as a baseline, the incremental job gains for pro-development policies would be even greater. Further, the increased investment associated with pro-development policies would swamp any employment declines associated with efficiency gains in the industry. In any event, there is good news behind the fact that oil and natural gas development creates a much smaller footprint using advanced technologies, and it is through technological advances such as the combination of hydraulic fracturing and

2

This value is only for capital investment in areas currently

for new areas currently

off limits in portions of the Rockies, the Atlantic offshore, incremental capital related to supporting Canadian oil sands production.

the Pacific offshore, the Eastern Gulf of Mexico, and ANWR. It does not include operating expenditures, investments not off limits, and U.S. investment Wood Mackenzie, U.S. Supply Forecast and Potential Jobs and Economic Impacts, September 2011.

-3horizontal drilling that allow us to develop oil and natural gas resources in a safe and environmentally responsible manner. Even better news is that we can create more jobs and realize environmental benefits. 3) You don't identify the basis for this question, but recent polling data suggests that your assumptions regarding public opinion are incorrect. According to a June Rasmussen poll, 75 percent of voters do not think the u.s. is doing enough to develop its own natural gas and oil resources, and a November Pew/Washington Post poll found most Americans (nearly 60 percent) want policies that allow more oil and natural gas drilling both onshore and offshore. In answer to your direct question, the Wood Mackenzie analysis does account for job losses associated with depletion of resources though it does not explicitly account for any job losses associated with efficiency gains. However, the efficiency gains in the industry, based upon the BLSstudy you cite, are likely on the order of 1 to 2 percent per annum and these effects would be swamped by the positive investment inflows due to increased access. According to Wood Mackenzie projections, by 2030 total direct employment in the oil and natural gas sector and indirect and induced employment in supported industries could increase by approximately 55 percent if the appropriate U.S. pro-development policies are in place.

As stated in #2 above, since the BLS projection does not incorporate potential employment gains from expanded access nor recent breakthroughs in producing oil and natural gas from shale (under a current path scenario), their projected job losses are premised on incomplete information. Again, if Wood Mackenzie had not assumed modest job creation in their "current path" baseline, incremental job gains would have been even greater. 4) As stated in #1 above, the Washington Post story clearly does not reflect the opinion of most economists, including those working for the administration or Democrat-leaning groups such as Center for American Progress, both of which include indirect and induced effects in their job projections. Yes, the Wood Mackenzie study does include indirect and induced jobs not directly in the oil and natural gas sector, as these would be real jobs employing real Americans. Increased activity in the oil and natural gas sector will have positive impacts on other sectors of the economy through purchases of necessary inputs to oil and natural gas operations and income related effects. In fact, the indirect and induced effects in the study are likely underestimated. Wood Mackenzie assumed a conservative 3.5 multiplier (2.5 indirect and induced jobs for every direct job created), compared to the far more aggressive 2008 IMPLAN Database multipliers for the oil and natural gas industry of 4.4 to 6.9, which are based on BEA's input/output industry tables.

And, as the Wall Street Journal editors recently noted, "[The] beauty ofthe oil and gas boom is that multipliers aren't needed to predict job growth. It's happening right before our eyes." For example, in North Dakota where oil and natural gas production has led to the nation's lowest unemployment rate (3.55 percent) and there are 16,000 current job openings. Or Pennsylvania, where Marcellus shale development has produced not just lower energy prices for families and businesses, but more than 72,000 jobs in the last two years. 5) The Washington Post story is incorrect. For direct employment, the Wood Mackenzie study only addressed the upstream oil and natural gas sector and employment related to u.s. equipment and services purchased by Canadian oil sands producers. The report did not address employment related to downstream

-4operations, such as refining and marketing (where convenience store jobs would be included). In fact, a premise of the study is that there would be no change in U.S. petroleum fuels demand from current projections. Therefore, it was assumed that retail employment would not be affected by the policies modeled in the Wood Mackenzie study. 6) The premise of your question is incorrect. Job estimates are based on projected spending and investment for each individual year through 2030. Of course, many jobs would be permanent if Congress pursued prodevelopment policies and the industry continued to grow through 2030. Regarding training, many of the skilled labor positions in exploration and production do not require an advanced degree; while some workers will require additional training, some can be trained "on the job" through company and industry programs, thus reducing job training lags. When a currently employed worker learns new skills and is promoted to a higher paying oil and natural gas job, it stands to reason that the vacated job would be backfilled, negating your concern that the net employment effect would be less than stated. It is unlikely that capital would be a constraint on investment - there is sufficient capital currently available in the U.S. and worldwide that could be invested in the oil and natural gas sector under a pro-development regulatory regime, and given the current high rate of unemployment that is projected to persist well into this decade, it is not likely that projects would be constrained by scarcity of labor. Lastly, labor costs alone are a small enough portion of total spending that even if they were to increase marginally, this would not likely impact the overall economics of individual projects. The claim that the five largest oil and natural gas companies "shed jobs" over the 2005 to 2010 period is specious on several fronts. ConocoPhillips, as noted in your letter, does not report U.S. job numbers. Without this information it is impossible to assert in aggregate that the "Big Five" oil companies shed jobs. It is inaccurate to characterize BP's sale of refining and retail operations as "job losses" since the jobs are not "lost," they are transferred to new employers in the oil and natural gas industry. It is also intellectually dishonest to include "job losses" from BP spin-offs of assets, but exclude "job gains" from ExxonMobil's acquisition of XTO Energy. In fact, according to BLS, over the 2005 to 2010 period, the U.S. oil and natural gas industry as a whole created 100,031 non-service station jobs. Note that the BLSdata does not include sole proprietorships and therefore the actual number of jobs created is certainly larger due to the large number of proprietorships in the upstream part of the industry. Simply picking some numbers out of company reports distorts what actually occurred within the oil and natural gas industry. Over the last five years, the oil and natural according to BLSdata), not reducing them, and natural gas development will increase also suggests that the investment impacts period. It is also important to note that the implied correlation in your letter between production and jobs is flawed. The more accurate correlation is between investment and jobs. The time line from lease award to production can be five years or more. Much of the job creation occurs in the early stages of planning and exploration. Much of the current production in the U.S. is due to activities initiated under previous administrations, and much of current investment is occurring onshore, on private lands, where the current administration's energy policies have less impact. 8) The question demonstrates a lack of understanding regarding how oil and natural gas companies operate, and how businesses make investment decisions. Oil and natural gas companies develop economic prospects gas upstream segment has been adding jobs (over 96,000 so Wood Mackenzie's premise that increasing investment in oil jobs is well-supported. This net job gain in the upstream segment outweighed any labor reductions due to efficiency gains over the

7)

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not leases. Leases are offered based on geographical grid lines, not necessarily where resources have been clearly identified. As a result, not every lease offered for sale is equally likely to economically produce oil and/or natural gas. While companies do purchase some leases in the hopes that they will prove to be productive, not all leases that are bought turn out to be good economic prospects after further investigation. That said, companies are not eager to return leases immediately upon their decision that a purchased lease is not currently economic. They have already made a sizable investment in their bid to acquire the lease, and technology advances could make the lease economic in the near future, so they often hold on to existing leases (continuing to pay rent to the federal government) through the end of the lease term. Furthermore, companies pay a substantial bonus bid up front to secure - or win - a lease, which by contract includes a set term of years. If the lease is not producing once the term expires, the government gets the lease back and puts it back up for bid. The lire-leasing" of offshore tracts has provided the government with billions of dollars in bonus bid revenues.

New access will bring the potential for new prospects in frontier areas with better economic potential, and therefore greater potential for new investment and job growth. In fact, the Wood Mackenzie analysis projects that it is both technically and economically production by 76 percent by 2030. feasible to increase domestic oil and natural gas

Further, production impacts are not expected to be a "dramatic increase" that would catch the market unaware. Due to the necessary lead time for new development, and due to the fact that oil is a global commodity, increases in U.S. production should not make areas covered in the study uneconomic to produce. In fact, in the past we have seen countries with spare production capacity increase or decrease their production in response to changes elsewhere around the globe. Therefore, additional U.S. production is not likely to hamper other new investment. What it would likely do is increase spare capacity around the world, helping to dampen potential price spikes in the future. Furthermore, additional U.S. supplies will provide the U.S. with greater energy security by lessening our nation's exposure to potential disruptions supply that result from global, geopolitical instability. Lastly, the study used Wood Mackenzie's own internal price forecast for both oil and natural gas. 9) The oil and natural gas industry does not receive tax "subsidies" or "preferences." A subsidy is a payment from the government to a company or individual. The U.S. government makes no such payments to oil and natural gas companies. There are provisions in the tax code that allow for oil and natural gas companies to recover business expenses, just as there are provisions for many other sectors. Nevertheless, at over 41 percent, in 2010 the oil and natural gas industry paid one of the highest effective tax rates in the U.S. (other S&P Industrials paid an effective tax rate of 26.5 percent). It is difficult to reconcile the notion of our industry receiving tax "preferences" when we pay an effective tax rate 50 percent greater than other sectors. Higher taxes will lead to reduced investment as some marginally economic fields become sub-economic under the cost structure of a higher tax regime. In their January 2011 analysis, Wood Mackenzie estimated production reductions under a higher taxation scenario based on highly detailed field economics on individual onshore plays and offshore projects. They found that under the increased tax scenario, investment decreased, resulting in a smaller tax base and overall reduced revenues, despite the higher tax rate. The CBO and CRSfigures cited in your letter do not take into account the impact of higher taxes on investment and production. in

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10} The Wood Mackenzie study is not an academic paper and was therefore not submitted for peer review. Nevertheless, Wood Mackenzie has been transparent regarding the economic modeling and basis for the study's findings. This includes testimony from representatives of Wood Mackenzie as well as API experts before various congressional committees, including your own. The study's methodology and results are open for scrutiny, such as your own, and the conclusions rest upon credible economic analysis. As stated above, the Wood Mackenzie report utilizes modeling and techniques that are widely accepted by economists in both the government and private sector.

t t) I am encouraged by your reference to the Data Quality Act, and trust that you will hold all analytical reports - including those by your staff and other industry detractors - to the same high standard. All of the assumptions and methodologies used by Wood Mackenzie are described in the reports themselves. Some detail on the individual data on fields and projects are the proprietary information of Wood Mackenzie. I would encourage your staff to contact Wood Mackenzie directly for more information about their proprietary data.

Thank you again for this opportunity to highlight some of the important facts regarding our industry's contribution to the U.s. economy and our way of life, as highlighted in our advertising and other public communications efforts. We are willing to work with you, the committee, and others on a non-partisan basis to ensure the benefits of increased oil and natural gas production accrue to our country. I would like to invite you to join the head table for our 2012 State of American Energy luncheon, planned for early January in Washington, D.C., where I will outline our industry's ability to do more: more jobs, more economic growth, more energy security, and more revenues to the federal government. We will contact your office with further details. If you, or your staff, have any questions or wish to discuss these matters further, please do not hesitate to contact me. Sincerely,

Jack N. Gerard President & CEO

Enclosed: Wall Street Journal Editorial, November 26, 2011: The Non-Green Jobs Boom API letter to Rep. Markey, September 21, 2011

The Non-Green Jobs Boom
The Wall Street Journal, Sat., 26 Nov 2011 So President Obama was right all along. Domestic energy production really is a path to prosperity and new job creation. His mistake was predicting that those new jobs would be "green," when the real employment boom is taking place in oil and gas. The Bureau of Labor Statistics reported recently that the But look more closely at the data and you can see which One is oil and gas production, which now employs some 200,000 more jobs, since 2003. Oil and gas jobs account private jobs in that period. U.S. jobless rate remains a dreadful 9%. industries are bucking the jobless trend. 440,000 workers, an 80% increase, or for more than one in five of all net new

The ironies here are richer than the shale deposits in North Dakota's Bakken formation. While Washington has tried to force-feed renewable energy with tens of billions in special subsidies, oil and gas production has boomed thanks to private investment. And while renewable technology breakthroughs never seem to arrive, horizontal drilling and hydraulic fracturing have revolutionized oil and gas extraction -- with no Energy Department loan guarantees needed. The oil and gas rush has led to a jobs boom. North Dakota has the nation's lowest jobless rate, at 3.55%, and the state now has some 200 rigs pumping 440,000 barrels of oil a day, four times the amount in 2006. The state reports more than 16,000 current job openings, and places like Williston have become meccas for workers seeking jobs that often pay more than $100,000 a year. Or take production in Pennsylvania's Marcellus shale formation, which the state Department of Labor and Industry says created 18,000 new jobs in the first half of2011. Some 214,000 jobs are now tied to a natural gas industry that barely existed in the Keystone State a decade ago. Energy firms are also rushing to develop the Utica shale in eastern Ohio, and they are expanding operations in Texas, Louisiana and Oklahoma, among other places. Good news? You'd think so, but liberals can't seem to handle this truth so they are now trying to discredit the jobs that accompany it. The American Petroleum Institute recently commissioned a study by the Wood Mackenzie consulting firm, which estimated that better federal energy policy would create an additional 1.4 million jobs by 2030. This has caused a fury on the political left, which complains that the study included estimates of direct and indirect jobs (such as equipment suppliers) but also "induced" jobs, or jobs created when oil workers spend their salaries at, say, hotels, restaurants or bowling alleys. It seems these claims rely on -- drum roll, please -- "multipliers" to produce estimates of knock-on jobs. Liberals know all about multipliers, which are the central operating conceit of modern Keynesian economics. The entire public justification for the $820 billion Obama stimulus was the claim that every $1 of spending would have a multiplier effect of 1.5 or more and thus create millions of new jobs.

That looks like a joke now. But Democrats and liberals continue to cite the black-box multiplier claims of Moody's Mark Zandi, who says the latest Obamajobs bill will create 1.9 million jobs. Some 750,000 of those jobs are supposed to appear merely from extending the payroll tax holiday for workers, giving them more money to spend on, say, hotels or restaurants or bowling alleys. All such multipliers are suspect, but the liberals can't have it both ways and invoke them to justify government spending but then repudiate them for private business. In any case the beauty of the oil and gas boom is that multipliers aren't needed to predict job growth. It's happening right before our eyes. And it stands to reason that if the Obama Administration dropped its hostility to oil and gas energy, even more jobs would be created as the industry invested to exploit other areas with new technology and production methods. Yet earlier this month the Interior Department released a new five-year plan that puts most of the Outer Continental Shelf off-limits for oil drilling. And the Administration has delayed for at least another year the Keystone XL pipeline that is shovel-ready to create 20,000 new direct, pipelinerelated jobs. The Office of Natural Resources Revenue recently noted that federal revenue from offshore bonus bids (from lease sales) in fiscal 2011 was merely $36 million -- down from $9.5 billion in fiscal 2008. The Obama Administration has managed the nearly impossible feat of turning energy policy into a money loser, pouring taxpayer dollars into green-energy busts like Solyndra. The Washington Post reported in September that Mr. Obama's $38.6 billion green loan program had created a mere 3,500 jobs over two years. He had predicted it would "save or create" 65,000. Mr. Obama nonetheless keeps talking about "green jobs" as if repetition will conjure them. He'd do more for the economy if he dropped the ideological illusions and embraced the job-creating, wealth-producing reality of domestic fossil fuels.

Jack N. Gerard
President and Chief Executive Officer

energ~

1220 l Street, NW Washington, DC 20005-4070 USA Telephone (202) 682-8500 Fax (202) 682-8110 Email gerardi@apLorg www.apLorg

September 21 , 2011 The Honorable Edward J. "Ed" Markey Ranking Member U.S. House of Representatives Committee on Natural Resources Washington, DC 20515 Dear Ranking Member Markey, The new report by the Democratic staff of the Natural Resources Committee titled, "Profits and Pink Slips: How Big Oil and Gas Companies Are Not Creating U.S. Jobs or Paying Their Fair Share," purports to show that oil and gas companies are not creating jobs, not paying their fair share in taxes and royalties, and not investing for future production. I would like to identify the flaws inherent in this report, to ensure that discussion regarding the oil and gas industry's employment record is not misunderstood going forward. For example, on the issue of jobs, the report implies that the oil and natural gas industry is not creating U.S. jobs or is laying off workers by citing employment data of a very limited number of companies. This analysis, though, is incomplete. Further investigation of the numbers would reveal that many of the job impacts from this limited sample are from dispositions of operations to other investors. The jobs may no longer be with specific companies, but it is incorrect to assume that affected employees received a "pink slip." In fact, with a more complete analysis of the industry, the staff would have seen recent studies and government data revealing that the U.S. oil and gas companies created, and continues to create, thousands of jobs even in these tough economic times. The latest jobs report from the Bureau of Labor Statistics (BLS) indicated that the U.S. economy created zero net jobs between July and August, 2011. However, BLS identifies that the U.S. oil and gas industry created almost 5,000 jobs between July and August 2011, and 9,325 jobs between June and August 2011. Further studies from PricewaterhouseCoopers reveal that the U.S.-based oil and natural gas upstream sector alone created approximately 120,000 high-paying jobs between 2007 and 2009, and in total is estimated to support 9.2 million U.S. jobs. Importantly, the PWC analyses demonstrate that even after the economic downturn in 2008, the oil and gas industry remained just as strong a driver for U.S. employment. The Democratic staff report also claims that various tax provisions used by the oil and natural gas industry are no longer needed and should be repealed. Raising taxes on a job creating industry is not the answer. Contrary to what some in the media have said, the oil and natural gas industry currently enjoys no unique tax credits or deductions. Since its inception, the U.S. tax code has allowed corporate tax payers the ability to recover costs and to be taxed only on net income. These cost recovery mechanisms, also known in policy circles as "tax expenditures," should in no way be confused with "subsidies," i.e., direct government spending. Again, these are standard business tax provisions that apply to all U.S. businesses, not just oil and natural gas. Further, just because a provision is old, does not make it obsolete. There are a multitude of code

provisions that have been around for decades and are still supported by sound policy. For example the deduction for research expenditures is not new, but policy makers still believe it helps spur innovation. The Intangible Drilling Costs (IDC) deduction is akin to the research deduction available for industry broadly. The ability to expense these drilling costs has led to new engineering and drilling techniques that have unlocked reserves in locations that were once thought to be unattainable such as deep water and onshore shale plays. This expansion has led to greater energy security and affordable natural gas prices for consumers and manufacturers. The paper's position that current tax incentives in the code favor oil and gas investments over investments in renewables is incorrect. Recent Senate testimony on this point showed that while the effective marginal tax rates on oil drilling and refining are substantial, these rates are actually negative for renewables like solar and wind. That is, while oil and gas companies continue to pay taxes on each new dollar of investment, the marginal investments for renewables are effectively subsidized by the government. Furthermore, according to the Compustat North American Database (April 2011 update) the overall effective tax rate for the oil and natural gas industry in 2010 was 41.1 percent, whereas the rate for the rest of the S&P industrials is 26.5 percent. The effective income tax rate for the major integrated oil and natural gas companies for the period from 2000-2010 averaged 45.6 percent. Between income taxes, rents, royalties and bonuses, on average, the industry pays the federal government around $86 million a day. Clearly claims made in the staff report that the oil and natural gas industry is not paying its fair share are not substantiated by the facts. Yet another false claim in this report is that the oil and gas industry is using its "outsized" earnings in stock repurchases and dividend payments at the expense of investing in future production. However, data shows that in the first half of 2011, the five major-integrated oil and natural gas companies invested $58.6 billion in capital projects - 82 percent of their profits to that point. Of this figure, $19.1 billion was spent on upstream capital expenditures in the U.S. (or the Americas). In the second quarter of 2011 alone, major integrated companies invested $12.6 billion in domestic upstream projects - 35 percent of their earnings over the same time period. Total capital expenditures in the second quarter of 2011 were $35 billion, representing 97 percent of their profits over the same period. In addition to reinvesting large shares of their earnings into future production, the oil and gas companies return value to their shareholders in the form of dividends and stock repurchases. These returns benefit millions of retirees and workers, including policemen, firemen and teachers. According to a study by Sonecon, less than two percent of the stock is owned by oil and gas company executives. The remaining 98 percent is held in public and private pension funds, 401ks and IRAs, mutual funds and by private investors. The oil and gas industry's earnings are large on an absolute basis because of the large scale of the industry. However, earnings reported on a cents-of-net-income-per-dollar-of-sales basis reveals that the oil and gas industry earned 8 cents per dollar of sales in the first quarter of 2011, below an average of all manufacturing of 9.2 cents per dollar of sales. Preliminary estimates for the second quarter of 2011 show oil and gas companies earned about 7.2 cents on the dollar, compared to the top Dow Jones companies' earnings of 12.1 cents. The oil and natural gas industry is already a critical driver of economic growth and job creation: we support 9.2 million jobs and more than $1 trillion in economic activity annually. We can do more of both -- and increase our revenues to the federal government -- through common sense policies that promote development and production of our domestic energy resources and Canada's oil sands, while protecting our federal lands and fragile ecosystems. I hope that we are able to put politics aside and recognize this industry's ability to help with our nation's economic recovery, putting Americans back to work and increasing our nation's energy

security. If y~u or your staff has any questions or wish to discuss these matters further please do n t hesitate to contact me. ' 0 Sincerely,

Jack N. Gerard President & CEO Cc: Speaker John Boehner Majority Leader Eric Cantor Majority Whip Kevin McCarthy Conference Chairman Jeb Hensarling Republican Policy Committee Chairman Tom Price N~tio~al Republican Congressional Committee Chairman Pete Sessions Minority Leader Nancy Pelosi Assistant Minority Leader James Clyburn Minority Whip Steny Hoyer Democratic Caucus Chairman John Larson Democratic Congressional Campaign Committee Chairman Steve Israel Members of the House Natural Resources Committee: Congressman Dan Benishek Congressman Rob Bishop Congresswoman Madeleine Bordallo Congressman Dan Boren Congressman Paul Broun Congressman Mike Coffman Congressman Jim Costa Congressman Peter DeFazio Congressman Jeff Denham Congressman Jeff Duncan Congressman John Duncan Congressman Eni Faleomavaega Congressman Chuck Fleischmann Congressman John Fleming Congressman Bill Flores Congressman John Garamendi Congressman Raul Grijalva Congressman Louie Gohmert Congressman Paul Gosar Congresswoman Colleen Hanabusa Congressman Andy Harris Congressman Doc Hastings Congressman Martin Heinrich Congressman Rush Holt Congressman Bill Johnson Congressman Dale Kildee Congressman Raul Labrador Congressman Doug Lamborn Congressman Jeff Landry Congressman Ben Lujan Congressman Edward Markey Congressman Tom McClintock Congresswoman Grace Napolitano Congresswoman Kristi Noem Congressman Frank Pallone Congressman Pedro Pierluisi Congressman David Rivera Congressman Jon Runyan Congressman Gregorio Sablan Congressman John Sarbanes Congressman Steve Southerland Congresswoman Betty Sutton Congressman Glenn Thompson Congressman Scott Tipton Congresswoman Niki Tsongas Congressman Robert Wittman Congressman Don Young