Oil Institute CEO: Obama Energy Policies Wrong

Sunday, 12 Jun 2011 12:56 PM

By Jim Meyers and Ashley Martella

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American Petroleum Institute CEO Jack Gerard tells Newsmax that easing the Obama administration’s restrictions on drilling for oil and gas could create more than half a million new America jobs.

He also states that a long-delayed pipeline from Canada can help the United States and its northern neighbor provide 92 percent of America’s domestic fuel needs within two decades.

But Gerard warns that the Obama administration’s “fundamentally wrong” energy policies are having a “very significant adverse impact on our energy policy” and charges that attacks on the oil industry by Democrats are “punitive” and “vindictive.”

Story continues below video.


The American Petroleum Institute is the main trade association of the U.S. oil and gas industry, representing about 400 corporations involved in all aspects of petroleum production, refining and distribution.

In an exclusive interview with Newsmax.TV, Gerard says that while many factors influence the currently high price of gasoline, chiefly the cost of crude oil, it is “important to focus on what we can do as a nation to try to impact those prices, and that is in the area of supply.

“Today about 85 percent of our outer continental shelf is off limits [to drilling]. With the right policy we could be producing energy by Americans, for Americans. We believe that’s what we should be doing to bring down the price of gasoline.”

Gerard agrees with Oklahoma Republican Sen. James Inhofe, who says the Obama administration is restricting access to domestic energy supplies and thereby stifling job creation.

“It’s very unfortunate because with unemployment being over 9 percent, it’s estimated that the oil and natural gas industry — if given access or opportunity to our domestic oil and gas reserves — could generate over half a million new jobs.

“We don’t need any government handout. We don’t need any government stimulus. We just need the opportunity to develop those vast resources.

“The real benefit, in addition to job creation, is that it would generate billions of dollars in revenues for the federal government, because we pay the government not only for the right to look for the resource, but we pay them in order to develop that resource and share with them on the resource that is produced.”

The United States has huge reserves of recoverable oil and natural gas, but “Obama’s policies are having a very significant adverse impact on our energy policy in this country,” Gerard tells Newsmax.

“He called the Saudis and asked them to increase their production. He went to Brazil and encouraged the Brazilians to increase their offshore production, and said we’d import it in this country. At the same time many of their policies are designed to delay, to defer, and to outright discourage the development of America’s oil and natural gas. We just think that’s fundamentally wrong and we think we need a course correction on that policy.”

Gerard stresses that a change in Obama’s energy policies would have an immediate effect on the price of gasoline.

“We think it would send a very positive message to the market. Right now the market has a number of assumptions,” and one of them is “the policy of the U.S. government. The signal to the marketplace is we’re going to continue to restrict access to our energy sources. So that’s factored in.

“When you hear about the price of crude oil running up, part of that is the result of assuming that the United States will not come to help out by producing our own domestic resources.”
America’s energy future is now largely being decided by OPEC and other oil exporters, and that should change, Gerard says.

“Today over 60 percent of our oil and gas comes from outside sources. We have just released a study that shows that by the year 2030, between us and the Canadians we can provide 92 percent of our domestic liquid fuel needs. That’s where we need to get focused.

“But there are two decisions there that are most important. One is access to America’s oil and natural gas, and the second is a pipeline from Canada that’s been in the review process for over 35 months. All the president has to do is sit at his desk and sign that approval and job creation will start immediately. It’s the largest shovel-ready job creating program on the books” and “over time it will create over 465,000 jobs. It is huge.”

Senate Republicans blocked a bill from Democrats that would have repealed $2 billion a year in tax breaks for the five biggest oil companies. Asked if the companies are being unfairly signaled out, Gerard responds: “Absolutely. In fact some of these policies are outright punitive and they’re vindictive and they’re punishing companies that have been successful.

“The oil and gas industry in the United States support employment of 9.2 million Americans. We generate and contribute over $86 million a day to the federal government. Some of these tax policies are designed to punish only five companies.

“And [the tax breaks are] not subsidies. Some have suggested we get a subsidy. We get no direct subsidies from the federal government. These tax provisions are generally provisions that apply to all companies across business segments, and what they’re doing is proposing to punish five oil and natural gas companies. It’s unfair. It’s poor tax policy. And it needs to continue to be defeated.”

Gerard adds that shale oil and gas production are increasingly important.

“The amount of clean-burning natural gas that we have due to our new technologies and our ability to produce it has almost tripled in the last couple of years,” he explains.

“Last year alone we created 57,000 new jobs in just Pennsylvania and West Virginia with our shale gas production.”
As for assertions that if the administration decided to begin granting drilling permits today, Americans would not see increased domestic gasoline supplies for 10 years, Gerard says: “If we had made this decision five years ago a lot of this production would be on line today.

“The president likes to talk that in 2010 we had record oil production. We did, but that production was the result of decisions made by previous administrations — the Clinton administration, the Bush administration.

“If this administration would be forward looking and progressive in their thinking, we could make decisions today that would positively benefit this country for decades yet to come. We just need the political will to make that happen.”

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