Why Pipelines and Production are pathways to progress

By Mike Sommers, President and CEO, American Petroleum Institute

September 28, 2020

With a historic pandemic and high unemployment, there are obvious reasons for stretched family budgets across the country.

Lesser-noticed reasons include the most basic necessities. Health care expenditures have jumped 75 percent, education expenditures spiked 38 percent and food expenditures surged 27 percent in America between 2008 and 2019.

But there is a pleasant surprise in that sobering federal data. As staying healthy, educating children and putting food on the table grew more expensive, household energy expenditures dropped 15 percent.

This has been a key benefit of America’s energy renaissance, itself born of technological advances including hydraulic fracturing, horizontal drilling and state-of-the-art infrastructure – much of it built by working men and women. It has made America the world’s leading producer of natural gas and oil.

An abundance of natural gas and oil at home means families spend less money on energy and have more income available at a difficult time. It also means millions of good-paying jobs, more products manufactured in the U.S. and America is more insulated from often hostile foreign suppliers.

For these reasons and more, Americans overwhelmingly support making and moving American energy to where it’s needed most. Recent polling from Morning Consult confirms that two-thirds of voters in key battleground and production states would be more likely to vote for a candidate who supports access to U.S. natural gas and oil.

Recognizing the industry’s potential to revitalize our economy and strengthen national security, Democratic, Republican and Independent voters agree that natural gas and oil is essential to America’s modern energy mix.

But recent fights over infrastructure – delaying or entirely blocking needed pipeline projects – threaten these hard-earned energy benefits. Essentially, activists are standing on the garden hose in the middle, blocking producers’ ability to get U.S. energy from where it is developed to where it is needed.

Sadly, especially for Americans in need, we are at a point where politically motivated voices oppose any infrastructure project on sight, regardless of its merits and the safety and other benefits it would provide American families.

Some object to every big construction venture, but pipelines increasingly serve as the most common proxy fight for those looking to advance a radical environmental agenda. If we aren’t careful, we soon won’t be able to build anything – no roads, no bridges, no ports to encourage commerce. All so extremists can score a point or two.

This political maneuvering is already the norm in California, where anti-industry mandates have weakened grid reliability, contributing to rolling blackouts and power shortages amid statewide heat waves. For expert observers, the solution is clear: deploy affordable, reliable natural gas for electricity generation when the demand for energy exceeds the Golden State’s renewable capacity.

California’s circumstances highlight the need to build natural gas and oil infrastructure so that businesses and consumers can keep the lights on, even when the wind isn’t blowing and the sun isn’t shining. An all-of-the-above energy strategy is both pragmatic and popular, despite certain activist-driven narratives.

The good news is the United States has the technology, the investors and the skilled workforce to build the infrastructure we need to safely and reliably distribute our homegrown energy.

The bad news is that it’s unclear whether America has the political will to undertake these critical projects today that will benefit America for decades. In recent weeks, we’ve actually gone into reverse on infrastructure.

On the East Coast and across the industrial Midwest, we have seen a number of major pipeline projects blocked as legal wrangling and ribbons of red tape spiral out of control. Along the way, we have lost a slew of good-paying jobs and new opportunities to reach Americans with affordable, reliable, cleaner energy. Just ask working men and women.

According to two studies released in July by North America’s Building Trade Unions, union and nonunion workers alike said natural gas and oil projects provide wages and benefits that make the American Dream a reality.

Still, political motivations threaten job-creating pipeline ventures like Keystone XL, which recently announced a project labor agreement with four leading U.S. unions to provide thousands of local, middle-class construction jobs. The project stands to inject millions of dollars in wages into the economy and would establish job training options to prepare employees for careers in the energy sector.

Tradespeople overwhelmingly report that they consider projects in natural gas and oil to have higher wages, better benefits and greater career opportunities than other energy sectors. Better pay and career stability translate into an improved quality of life for workers and their families.

At the same time, reliable delivery of homegrown energy is critical to sustaining our nation’s energy security and for more Americans to share its many benefits.

Infrastructure bottlenecks impact service to consumers, but a lack of adequate pipeline capacity and other facilities also can affect domestic production, which requires delivery and processing systems to safely take natural gas and oil where it needs to go.

Of course, access to production regions is the first step toward realizing the benefits of America’s natural gas and oil assets. But proposals to ban energy leasing and development offshore and on federal lands could decrease U.S. federal natural gas and oil production by 68% and 44%, respectively, causing $700 billion in cumulative GDP losses through 2030, according to API’s latest economic analysis.

Such a policy could hamstring employment prospects in major production states, like New Mexico, Wyoming and Colorado, contributing to nearly 1 million U.S. job losses by 2022. Additionally, a leasing ban could increase greenhouse gas emissions by boosting coal consumption, and harm U.S. energy security by escalating net imports of foreign oil.

Think about it: Not too long ago we weren’t producing enough energy here at home to avoid increasing reliance on foreign suppliers. President George W. Bush said America was “running out of energy.”

The future looked bleak: Our nation would need hostile regimes to light our homes, power our workplaces and keep our hospitals running. We were building terminals that encouraged energy imports, not exports. Today, supply thankfully isn’t the problem. It’s the capacity to efficiently and economically bring our energy abundance to market and consumers.

Our recent sprint backward on pipelines and resource development should alarm Americans everywhere. Let’s do the right thing and make affordable energy available to all. Let’s build pipelines, modernize our nation’s infrastructure and lift our communities.

Energy affordability and accessibility translate to fairness, stability and doing what’s right by as many Americans as possible. Infrastructure is the cornerstone to progress, jobs, economic growth and national security.

Learn more about how the natural gas and oil industry is advancing our economic recovery and energy security

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