Top energy lobbyist bashes Obama regulations as oil production spikes in ‘American renaissance’

© Nick Oxford
Despite heavy regulations imposed under President Obama, the US energy industry is driving an “American renaissance,” Jack Gerard, president of the American Petroleum Institute, said in Washington on Tuesday. Gerard also laid out goals for oil lobbyists in 2016.

Every year, the API presents its State of American Energy report, and this year’s maintained resistance to the federal regulation under which the industry has sustained profitability and growth. Oil production has risen dramatically since Obama took office in 2009.

“The geopolitics of energy have changed over the past decade,” Gerard said in the speech to other industry businessmen and lobbyists. That change has had more to do with capitalism than government intervention, the largest trade association for the US oil and natural gas industry says.

"This isn’t happening because of the administration. Prices aren’t down because of the administration,” API Executive Vice President Louis Finkel told Bloomberg Business. “This is happening on private land because of thoughtful and balanced state regulatory regimes that balance economic growth and production of oil and natural gas with environmental stewardship. In many ways, this administration has missed the opportunity to seize on that."

"The only reason consumers haven’t been buried by these costs yet is because our industry continues to innovate and increase efficiency,” Finkel added.

As the oil industry claims victory over the Obama administration, environmentalist groups see a more nuanced dynamic where the White House failed to rise to the occasion.

"From day one of the administration and accelerating into the present, this administration and this White House has viewed the natural gas and oil bonanza in this country as an economic opportunity, and they have ridden it and ridden it hard," Bill Snape, senior counsel for the Center for Biological Diversity, told Bloomberg. "They greased the skids for too much natural gas, oil and fracking in this country."

Production of oil in the US is approaching record levels, up 82 percent since Obama was sworn into the presidency. Natural gas production is up almost 25 percent. And while environmentalists reiterate the lax effort from Obama, those in the business of fossil fuels aren’t expressing relief so much as readiness for more.

Under the Obama administration, more drilling in the Arctic Ocean has been permitted as well as that along the East Coast in the Atlantic. Recently, the White House ended a 40-year ban on exporting crude oil, which Gerard called “a victory of long-term vision and fact-based policymaking over political ideology and ideological dogma.”

By 2040, Gerard said 80 percent of US energy will be domestically produced, based on federal data.

On the other hand, the administration has kept the 12 million acres of the Arctic National Wildlife Refuge closed for oil exploration, blocked the Keystone XL pipeline, and impacted the natural gas sector by enforcing more rigorous controls on ozone limits and methane emissions.

Gerard took special aim at Obama’s Clean Power Plan to mandate lower greenhouse gas emissions across the industry.

The plan, "under the guise of environmental protection, does in fact, seek to pick winners and losers in the energy market, not based on market conditions, consumer preference or economic reality," Gerard said, noting that the policy favors natural gas over coal.

But the top long-term priority for the industry, Gerard says, should be infrastructure.

"Emboldened by their ability to stop the Keystone XL pipeline, anti-fossil-fuel advocates have set their sights on all energy infrastructure projects," he said.

An Environmental Protection Agency rule set in 2012 to require natural gas companies to use "green completion" equipment capable of cutting back methane emissions is limited to new and improved drilling sites, and the agency is working on similar rules for other natural gas operations, as is the Department of the Interior.

This month or next, the Bureau of Ocean Energy Management is anticipated to carry out a plan to offer both off and onshore drilling rights, in the form of leases, to last between 2017 and 2022. That plan restricts any other such site sales to oil and natural gas companies, although the next administration could conceivably come up with a plan of its own.

If infrastructure is the top long-term goal, then the Renewable Fuel Standard is the top immediate one. Acknowledging that 2016 is not the best time politically to get Congress moving, Gerard did express hope for ending the requirement on oil companies to blend their gasoline with ethanol, a policy put into place under President Bush in 2005.

Gerard said it was "a relic" and "a direct threat to our nation's economy."