New API study aims to replace rhetoric with reality

Adopting anti-fossil fuel activist policies would reverse economic gains, create U.S. energy dependence

“Keep-it-in-the-ground” policies could have us all feeling it in the pocketbook.

That’s the essence of a recent study commissioned by the American Petroleum Institute (API) that quantifies the consequences of abandoning fossil fuels.

“The overwhelming majority of Americans support policies to maintain U.S. energy leadership. This pro-energy vision means energy from all sources, where oil and gas play a central role in providing abundant and affordable energy,” says API president Jack N. Gerard.

A vocal minority of extreme activists, he adds, “are working to obstruct energy development and infrastructure projects, reducing our energy options under a false belief that oil and gas production and use are incompatible with environmental progress.”

According to the study, adopting all policies advocated by anti-fossil fuel activists would, by 2040:

• Create a $4,550 jump in energy costs for the average U.S. household;
• Cost 5.9 million jobs and $11.8 trillion in cumulative gross domestic product (GDP);
• Potentially raise prices of crude oil and natural gas by $40 per barrel and $21 per million British Thermal Units (MMBTU); and
• Potentially raise retail electricity prices by 56.4%.

The API study was conducted by OnLocation Inc., which has done technical work for U.S. Energy Information Administration modeling for more than two decades.

Using the U.S. EIA’s own economic modelling and identical data from its 2016 annual energy outlook, the study examined a long-term future in which the U.S. stopped issuing new federal oil and gas leases, banned hydraulic fracturing, refused to allow new or expanded coal mines, and shut down regulatory approval for energy infrastructure, including pipelines.

The dramatic reduction of U.S. carbon emissions in power generation is primarily due to the availability of natural gas, notes Gerard.

“It’s time to move from the rhetoric and present the reality to state legislatures and county commissions,” he says.

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