API Nominates Energy in 2012 Issue Campaign

WASHINGTON, D.C. -- With GOP contenders for the White House shifting their focus from this past Tuesday's Iowa Caucuses to the Jan. 10 New Hampshire Primary, the 2012 U.S. Presidential election is in full-swing. The American Petroleum Institute (API) has ushered in the election season with a campaign of its own.

API refrains from telling voters who to vote for because it does not endorse specific candidates, but it wants to make energy a more prominent issue with voters as well as candidates vying for the White House down to state and local offices. Through its new "Vote 4 Energy" initiative, API is promoting public policies that will increase access to North American oil and natural gas and other energy resources.

Seeking nonpartisanship

"We think it's very important to engage the public about energy," said API President and CEO Jack Gerard at the organization's second annual State of American Energy event. "Energy should not be a partisan issue. It should be an American issue. We believe people are clamoring for leadership [on energy]."


Addressing a packed midweek luncheon at Washington's Newseum, Gerard said that producing more oil and gas domestically would pay dividends for the U.S. by creating jobs, increasing governmental revenues and promoting national security. Regarding the latter issue, pending action by the Obama Administration on TransCanada's Keystone XL crude oil pipeline may be the most pressing election year issue.

The bi-national project that would carry diluted bitumen from Canada's oil sands to refiners on the U.S. Gulf Coast has cleared a three-year environmental review process by the U.S. State Department. However, President Obama still needs to decide whether it is in the national interest. Because Keystone XL would carry crude oil from a neighboring country and close ally, Gerard said the pipeline would enhance energy security and clearly deserves the "national interest" designation.

On Nov. 11 of last year, the State Department announced that a national interest decision will be postponed until at least the first quarter of 2013 -- after the fall elections. A provision in a payroll tax extension bill that Obama signed into law two weeks ago mandates a decision by late February.

An affirmative national interest decision by the administration would allow work on the pipeline to begin while a negative decision would create more delay. Gerard also acknowledged that no decision -- basically a decision to not make a decision -- would still allow the project to proceed because it would secure a conditional permit. However, he contends that anything short of an affirmative decision would have serious political ramifications because it would show weakness on the energy issue.

"I think it would be a huge mistake on the part of the President of the United States to deny the construction of the Keystone pipeline," said Gerard. He noted that the most recent legislation received broad bipartisan support in the House and Senate and enjoys backing from some labor unions whose members stand to benefit from the creation of construction jobs.

Boost access to resources

In terms of exploiting new oil and gas resources, Gerard urged the federal government to increase the industry's access to new leasing areas both offshore and onshore. Although API welcomes recent lease sale progress in the Gulf of Mexico -- the first since the Deepwater Horizon incident and subsequent oil spill -- Gerard pointed out that the five-year plan falls short because it limits offshore activity to the Western and Central Gulf.

"We pretty well understand the resource in that area," Gerard said. However, he noted that the federal government continues to restrict access elsewhere despite significant local support for exploration. He cited offshore Virginia as one such example.

Gerard also cited a Dec. 2011 study by Quest Offshore finding that the federal deepwater drilling moratorium and resulting reduction in deepwater permits led to a loss of $18.3 billion in previously planned total capital and operating expenditures in the Gulf for the 2010-2011 period. Issuing GOM drilling permits at pre-moratorium levels would add $15.6 billion in investment through 2015, the study also finds. Moreover, accelerating permitting reportedly would boost average annual U.S. employment by anywhere from 17,000 to 49,000 jobs per year during the same period.

Gerard also took Wednesday's event as an opportunity to clarify the oil and gas industry's stance on the regulation of hydraulic fracturing. "Today it's regulated where it should be, at the local and state levels," Gerard said. "Industry strongly supports reasonable regulations."

Gerard also reminded event attendees that the industry created API back in the 1920s precisely to set standards governing how it operates.

"In developing those best practices among industry we set the bar higher," Gerard said, adding that legislators and regulators over the years have frequently modeled laws and rules based on API criteria.

'Much more than a communications piece'

Taking issue with a reporter's apparent suspicions about the ultimate goal of the campaign and the assertion that voters choose candidates rather than issues, Gerard said that the campaign is meant to help voters evaluate candidates based on their positions on the energy issue. Voters support candidates based on issues, he reasoned.

Although he would not comment on how much API is spending on the Vote4Energy campaign, Gerard said the organization is embarking on a comprehensive initiative to inform voters and candidates about energy. He explained that it will use social media as well as print and radio and will target a national audience as well as stakeholders in states such as Ohio, Pennsylvania and Virginia that could benefit from industry job creation.

"It's much more than a communications piece," Gerard concluded.

Energy Issues in 2012 Campaign

Matthew V. Veazey has written about the oil and gas industry since 2000. Email Matthew at mveazey@downstreamtoday.com


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