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The State of American Energy: A Summary

Energy’s Role in Safely Providing The Oil and Natural

Economic Growth, America’s Energy Gas Industry, an
Job Creation The U.S. oil and natural gas Economic Engine
and Providing industry has always had a strong
safety performance record, and we for Our Nation
for the Future continue to improve upon it. The oil and natural gas industry’s
Following the Gulf oil spill, our impact on the U.S. economy is
Our energy future depends on the significant, supporting more than
ability of America’s energy companies industry demonstrated its commit-
ment to ensuring the safety of our $1 trillion to the economy annually
to safely and reliably provide the oil and 9.2 million U.S. jobs.1 Developing
and natural gas the United States operations. Our response to the spill
in ships, materials and manpower more of America’s oil and natural
needs to grow the economy, create gas resources will help meet growing
jobs and enhance energy security. was unprecedented. We created
industry-wide task forces to identify demand, create hundreds of thousands
and learn from any gaps in operations of jobs, provide revenue to federal and
It is time for a new focus on energy
or practices. Recommendations state governments, and enhance our
policy, and we remain committed
from these task forces have already nation’s energy security.
to working with all policymakers to
identify solutions that will advance helped improve the industry’s
Economic growth opportunities
our country’s economic interests and safety performance.
associated with oil and natural gas
sustain our way of life. development are significant. A new
Across our industry—from exploration
and production to distribution and study from Wood Mackenzie shows
refining—we develop and constantly the greater potential for higher
improve best practices for safe opera- government revenue from increased
tions, including training, operational energy production compared to
procedures, equipment improvements, higher taxes on energy companies:
industry standards and technology—
4The study found that from
allowing access to new energy resources 2011 to 2025, negative economic
while enhancing safety, efficiency and consequences of higher taxes
environmental protection. will, in the long run, more than
offset any short-term tax revenue
gains. Under higher taxation,
revenues are estimated to decrease
by $128 billion, but increased
access could generate an estimated
$194 billion in additional
government revenue.

4More importantly, as millions of

Americans struggle to find work,
in 2025 more than 530,000
additional jobs are possible in the
Bettina J. increased access scenario. The higher
Environmental, Health and Safety Technician
One of 9.2 million Americans whose jobs are
tax scenario could result in job loss—
supported by the oil and natural gas industry. estimated at almost 170,000 in the
peak job loss year of 2014.

1 The State of American Energy 1

Growing the Economy • Thousands of U.S. businesses
large and small depend on oil and
with the right public What Policymakers Should Do
by Developing America’s natural gas operations. The industry policies and partnership
Energy Resources supports businesses well outside the Develop America’s Avoid Punitive Enact Smart Energy
Gulf region—vendors that provide between industry and Energy Resources New Energy Taxes Policy Based on Sound
• Oil and natural gas companies vital support and services to Gulf
operations are located as far away
policymakers, we can Economic Principles
paid $1 trillion2 in total income Developing North America’s vast With policies that create and
taxes from 1980 through 2008 as Pennsylvania and Illinois. enhance our economic, oil and natural gas resources, both sustain a level playing field for Burdensome and unnecessary EPA
and more than $178 billion3 to environmental and offshore and onshore, will help
meet growing energy demand, create
all energy options, the oil and regulations could erode industry
the government in rent, royalty
and bonus payments from 1982
Creating Good Jobs energy security hundreds of thousands of new U.S.
natural gas industry will create
new jobs and help fuel the nation’s
environmental and efficiency gains
and have unintended consequences
through 2009. • The oil and natural gas industry jobs, provide billions in critical economy. Conversely, adding for the U.S. economy. Our nation
supports more than 9.2 million API and its member companies revenue to federal, state and local billions of dollars in new and needs policies that provide for energy
• The oil and natural gas industry U.S. jobs, including 2.1 million are committed to working with governments, and enhance our punitive taxes on our industry exploration, energy production and
provides the U.S. Treasury, direct jobs and 7.1 million indirect policymakers to pursue a thoughtful, energy security. With this in mind, will have a devastating impact environmental protection. With this
on average, with well over jobs from the purchase of goods commonsense energy agenda— policymakers should: on American jobs and economic in mind, policymakers should:
$95 million each day.4 and services. one that promotes U.S. economic growth. With this in mind,
growth, job creation and safe, reliable, • Re-examine and reconsider limiting policymakers should: • Prevent the unintended consequences
• Allowing companies to access • In 2008 and 2009, industry salaries affordable energy for the future. offshore exploration and production of EPA proposals. EPA’s mission can
oil and natural gas resources in the exploration and production in the eastern Gulf of Mexico and in • Advance policies that encourage and should be met through scientifi-
currently off-limits could generate sectors were more than double the the Atlantic and Pacific. company investment—creating cally sound, cost-effective measures
an additional $1.7 trillion5 national average for all U.S. jobs. What the Industry is Doing jobs and making U.S. companies that allow for continued economic
in government revenue. • Continue plans for on- and offshore
more competitive. growth and job creation.
• The number of direct oil and In addition to the development and Alaska development, which will
• Industry taxes, royalties, rental natural gas industry employees improvement of safety standards and generate thousands of jobs through- • Resist efforts to impose punitive • Allow Congress to commit to a
payments and other development is larger than the populations operations, the oil and natural gas out the country—from pipeline new taxes or costly and unnecessary thoughtful and balanced approach
fees fund community needs, of 15 states.6 industry is at the forefront of: manufacturers in the Midwest regulations on American energy to climate change that involves all
including roads, schools and parks. and computer technicians on the companies that would kill jobs, stakeholders, rather than continue
• Allowing oil and natural gas • Developing advanced energy coast to labor union workers for
technologies, putting us on the slow or reverse economic growth EPA efforts to regulate GHG
• Millions of Americans benefit companies to access domestic construction and maintenance.
resources currently off-limits cutting edge of exploring for, finding and harm American businesses and emissions under the Clean Air Act.
from the industry’s strong economic
could create hundreds of and producing energy resources; • Expeditiously process and approve consumers alike.
performance as shareholders in these
companies through pension plans, thousands of new jobs in drilling plans and permits for
mutual funds, IRAs and 401k plans. the future. • Increasing energy efficiency; and pending and future lease areas.
• Diversifying energy resources, The Economic Impacts of the Oil and Natural Gas
• Support the onshore development
drawing upon a full range of of natural gas, including shale gas, Industry on the U.S. Economy in 2007 by Industry
energy sources, including and refrain from imposing unnec- Labor Income Value Added
Who Owns “Big Oil?” alternatives and renewables. essary new regulations or taxes on Industry Employment
( $ millions) ( $ millions)
(Holdings of Oil Stocks, 2007) natural gas operations. Direct Impact of the Oil and Natural Gas Industry 2,123,291 199,344 456,971
Industry investments in technologies
Indirect and Induced Impacts on Other Industries 7,114,090 358,916 580,089
such as cogeneration and carbon • Promote policies and a regulatory Services 3,399,474 149,462 181,720
capture and storage (CCS), have reduced environment that will support the Wholesale and Retail Trade 1,174,762 49,711 80,915
greenhouse gas (GHG) emissions by growth and free trade of Canadian Finance, Insurance, Real Estate, Rental and Leasing 828,904 47,487 73,322
more than 48 million metric tons of oil sands, a reliable, safe and readily Manufacturing 680,834 49,936 73,322
carbon dioxide equivalent from 2007 available energy source, including Transportation and Warehousing 276,492 13,892 18,746
to 2008, a reduction comparable to the approval of key pipeline projects Construction 220,923 11,185 13,722
taking 9.7 million cars off the roads.7 that will help create jobs in both the Information 165,859 15,206 29,324
United States and Canada.
The industry is also researching, Agriculture 122,542 2,193 5,197
developing and marketing alternative Utilities 26,272 4,309 14,652
and renewable sources of energy, Mining 10,898 1,037 2,068
including solar, geothermal, biofuels, Other 207,130 14,499 16,122
fuel cells, hydrogen power and Total Impact 9,237,381 558,260 1,037,060
Source: SONECON, “The Distribution of Ownership of U.S. Oil wind energy. As a % of U.S. Total 5.2% 6.3% 7.5%
and Natural Gas Companies,” September 2007.
Source: PricewaterhouseCoopers, “The Economic Impacts of the Oil and Natural Gas Industry on the U.S. Economy,” September 2009.

2 The State of American Energy 3


Policy Choices Oil and natural gas are engines of eco-

nomic development around the world.
That Ensure Future For the next several decades at least, we
will continue to rely on oil and natural
Energy Security gas to meet growing energy demand,
even as we increase our energy efficiency,
Our leaders must pursue a and as renewables and alternatives play
thoughtful, commonsense energy an increasingly important role in a
agenda that promotes U.S. job changing energy landscape.
creation, economic growth and Given this energy reality, the nation
energy security, and avoids has important decisions to make about
harmful taxes or regulations. its energy future. What we need
We encourage policymakers to: today—and tomorrow—are policy
choices that increase, not decrease,
4 Increase energy production energy production. We need increased
by supporting policies that access to where oil and natural gas are
promote all energy sources; found, while protecting national parks
and fragile ecosystems. Government
4 Pursue policies that encourage policies should harmonize our energy
investment in new energy and environmental goals, encouraging
projects and provide market- responsible development that creates
based solutions to meet jobs and helps drive our economy.
energy demand;
As a society, we cannot remain
4 Reject new energy taxes passive to energy, the environment
and turn aside unnecessary or economic growth. Each will fall
regulations on oil and natural short of its fullest promise, absent
gas development; and constructive industry-government
partnerships committed to
4 Abandon efforts by the EPA providing our nation with a
to regulate greenhouse gases workable energy security policy.
under the Clean Air Act; instead,
allow Congress to commit to a We need to get it right on energy.
thoughtful and balanced approach Too much is at stake for our
to climate change that involves nation to do otherwise. Do Kim C., Homeowner
One of the 168 million Americans who
all stakeholders. keeps her home warm thanks
to oil and natural gas.

PricewaterhouseCoopers LLP, “The Economic Impacts of the Oil and Natural Gas Industry on the U.S. Economy in 2009:
Employment, Labor Income, and Value Added,” May 2011.
MMS, Office of Natural Resources Revenue (ONRR).
API calculations based on data from EIA ( <
cfm?tableNumber=12>) and DOI, Office of Natural Resources Revenue ( <
ONRRWebStats/Home.aspx>) and direct request.
ICF International, “Strengthening Our Economy: The Untapped U.S. Oil and Gas Resources,” December 5, 2008.
U.S. Census Bureau, “Annual Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2000 to July 1, 2009.”
T2 and Associates, “Emission Reductions Associated with U.S. Oil and Gas Industry Investments in Greenhouse Gas Mitigation Technologies,” March 2010.

4 The State of American Energy