Show notes
“America’s Energy Challenges in a Changing World Environment” American Petroleum Institute President & CEO Mike Sommers discusses the domestic oil and gas industry and how the Russian-Ukraine War and current policies on production and climate change effect gasoline prices before an April 14, 2022 meeting of The Economic Club of Florida.
Show Notes
The non-partisan American Petroleum Institute (API) is the largest national trade association representing all aspects of America’s natural gas and oil industry. It was founded in 1919 as a standards-setting organization, and has developed more than 700 standards in the oil and natural gas industry to enhance operation and environmental safety, efficiency and sustainability. Mr. Sommers told the Club that America must continue its march to energy independence.
“In 2008, this country was producing about 6 million barrels of oil every single day. And since then, we've more than doubled that production. It's not because some politician came in and made the decision to do that. It's because this industry stepped up to the plate, discovered new innovations, and new ways to get more oil and gas out of the ground. And that has had such huge economic consequences for the American people,” Sommers said. “Unfortunately, we've made some bad policy choices in the last couple of years and as a consequence of that our production has gone down. If we get the policies right, we can get production back up and we can get prices lower for the American people.”
Sommers said API is working with Washington policymakers to provide energy security at home, maintain U.S. economic strength, and protect national security interests, especially in these times of international crisis. He said the world consumes 100 million gallons of oil each day, of which about 13 million barrels are produced in the US. “But we consume about 21 million barrels of oil every day here,” Sommers said. “This is a global market. What brought prices to where they are now is a combination of bad policy, the pandemic, and lately, the war in Europe.”
Sommers told Club members that it’s very difficult to see a scenario where the US will be able to produce what it needs, but could be energy independent with the help of Canada, which has abundant oil and natural gas resources. “So when we talk about energy independence, we talk about North American energy independence primarily,” he said.
He also discussed the role that climate policy is playing. He has spent the past three years with API leading the adoption of the industry’s position on climate change, including decarbonization – helping reduce the planet’s “carbon footprint” from vehicle and industrial emissions linked to climate change. “Even if every country meets their Paris Climate Accord goals, half of the energy in the world will still be from oil and natural gas. Setting ideology aside, most everyone knows that the world needs oil and natural gas in a big way, and will for decades and decades to come. The only question is where that oil and gas is going to come from?” he asked.
API also supports President Biden’s recent pledge that over the next six years, 65% of US oil and gas exports would go to Europe. “We are all for that. But in this case, the tools and the levers to meet the goal are held up by Washington DC. To get supplies on this scale to export terminals, and over to Europe we’ll need access to energy on federal lands, and the ability to build new infrastructure, such as pipelines,” Sommers said.
He also said there’s a misconception that an oil lease is all that’s required to start producing, when there’s actually a long list of other steps and approvals that must follow. “The real problem here, as everything in Washington, D.C. is red tape. We actually need more lease sales and permit approvals onshore and offshore if we're going to keep production in line with what we know is going to be future demand.” Sommers said that includes developing a new five year offshore leasing program in the Gulf of Mexico to replace the current one set to expire in June. He also said that despite criticism, production is at or near its highest level in two years.
“If America doesn't control its energy destiny, our fate will be in the hands of others,” Sommers added. “That alone is a powerful argument for increasing supply here in the United States. Energy policy does not have to be a series of endless crisis by crisis movements. Our aim should be to avoid crisis by shaping events instead of being shaped by them.”
Sommers took questions from Club members about the nation’s Strategic Petroleum Reserve, private energy investment, clean energy alternatives, and the impact of hurricanes on oil production.
Links and Resources Mentioned in this Episode
Mike Sommers Biography
American Petroleum Institute
The Economic Club of Florida podcast, provides an extended platform for discussion to educate, engage, and empower citizens on important economic, political, and social issues. Based in Tallahassee, Florida, the Club has featured distinguished speakers on engaging topics of national importance since 1977. To learn more, including how to become a member, visit www.Economic-Club.com or call 850-224-0711 or email mail@economic-club.com. Date of recording 4/14/2022. © Copyright 2022 The Economic Club of Florida, All Rights Reserved
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