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The oil market and downstream energy

Hydrocarbon Engineering,

Below are highlights from the CERAWEEK2015 downstream plenary talk given by Jack N. Gerard on the oil market and downstream energy.

“Today, the US leads in petroleum products, refining and natural gas production, and we’re on track to lead in the production of crude oil, facts reinforced by last week’s EIA Annual Energy Outlook. The report confirmed that our nation is more energy secure than ever before. And it said in part that domestic production of natural gas is projected to grow through 2040 eventually reaching 35.45 trillion ft3; and domestic oil production is projected to exceed 10 million bpd in a few years and remain at that level through 2030.

“Keeping pace with our nation’s increased development of our energy resources are the 139 operating refineries that produce more fuel than ever before and support roughly 540 000 good paying jobs and 1.9% of our nation’s economy. What’s more, the benefits of this era of energy abundance extend beyond the financial. It also has helped to reduce our nation’s greenhouse gas emissions, now at 20 year lows, even as energy production is at record levels. Here too, our nation’s refineries are playing a vital role. Today, America’s world leading refineries produce cleaner fuels which, when used in modern cars and trucks, have reduced emissions from the nation’s vehicles by 99% since the 1970s. Our industry has not only set production and refining records; it has also added 600 000 jobs between 2009 and 2011, playing a critical par in our nation’s economic recovery.”

Energy abundance

“All of which points to a new era of American energy abundance, security and global leadership, what I refer to as the American energy moment. Making it clear that our nation is conquering what for decades has been our most dogged economic, social and geopolitical vulnerability, energy dependence and energy insecurity.

“We got to this era of energy abundance and global energy leadership because of the entrepreneurial spirit of the private sector, the hard work of the American worker and the unique system of private property and individual rights of the American marketplace. To continue this progress we should be mindful that these advances could easily be stalled or even reversed without forward looking energy policies that encourage safe and responsible domestic energy development and production, that support a robust refining sector, and embrace our nation’s bright energy future.

“Unfortunately, there are some in our society who do note share our view or enthusiasm for the American energy moment.”

Energy policies

“What we need are energy policies that embrace the 21st century opportunity economy and that place good energy policies ahead of political expediency and ideology. In that regard the needlessly drawn out decision on the Keystone XL pipeline is a prime example. So far we have seen six plus years of pointless delay of the shovel ready, job creating Keystone XL pipeline, which only serves to deny as many as 42 000 American workers well paying jobs that could produce as much as US$2 billion for the nation’s economy. More broadly, according to an IHS study, essential infrastructure improvements in just the oil and natural gas area could, over the next decade, encourage as much as US$1.15 trillion in new private capital investment, support 1.5 million new jobs, and add US$120 billion on average per year to our nation’s GDP. And looking longer term, the continued regulatory sequestering of energy resources on land controlled by the federal government could significantly hamper our nation’s ability to remain a global energy superpower.”

Closing words

“API’s overarching goals are to safeguard the gains we’ve made in these areas and to build upon them for future generations. To do that our nation must adopt policies that reflect America’s 21st century reality of energy abundance. But more than our nation’s energy realities have changed, our industry has changed. Today through API’s 34 State Petroleum Councils, 1.5 million Energy Citizens, 260 000 Energy Nation advocates and almost 33 million API Microtargets routinely make their voices heard in support of policies that will keep our nation’s energy future bright. Ultimately, our nation’s energy policies should set a course that transform this American moment of energy abundance and domestic energy security into an enduring era of global energy leadership.

“This nation’s energy policies should ensure that future generations of Americans inherit an energy secure and prosperous nation and that the world witnesses for the first time how energy abundance and global energy leadership can be a positive, transformative force on the world stage.”

Edited from speech by Claira Lloyd

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