The US has made some amazing strides over the past few years within the realm of energy, in terms of markets and technology and environment, but despite that there remains risk to the industry, primarily from “anti-energy environmentalism” opposition, which means “we have to continue to be resilient,” said Matthew Koch, Vice President of the US Chamber of Commerce, in addressing the annual Montana Petroleum Association’s Appreciation Luncheon last week in Billings.
Koch lauded the petroleum industry for their past resilience, crediting its leaders with much of the positive changes that have happened. The petroleum industry has changed the geopolitical balance to the favor of the US, oil imports have been reduced by $200 billion annually helping the balance of trade for the US, there has been a return of the chemical, fertilizer, and steel industries, and the Oil & Gas sector created 9 percent of all jobs in 2011, and it has generated a renaissance in innovation and manufacturing.
Advances in the petroleum industry that have turned the US around into being Energy Independent and exporting one million barrels per day in energy exports, and within striking distance of being a world net exporter of energy – in addition to other improvements in the economy, that have been seen in the past year because of President Donald Trump’s policies – all could be gone in the blink of an eye under a different president. That means there is still a lot that has to be done to secure our improved status, was essentially the gist of Koch’s message entitled, “Situational Awareness.”
One of the biggest changes and perhaps the least recognized is the environmental improvements that have been made in the US since the passage of the Environmental Policy Act of 1970. It’s “One of the greatest stories never told,” said Koch.
Unlike most nations in the world the US urban air quality at 8 ppm (parts per million) is well below the EPA standard of 12 ppm. Montana’s air quality, too, has improved significantly, with a 68 percent reduction in sulfur dioxide, 89 percent reduction in carbon monoxide, 5 percent reduction in ozone and particle pollution reduction of 35 percent.
And, most amazingly – “it takes 33 cars today to make as much pollution as one car made in 1970.”
“So, it is not true that we are not doing our part,” as was the claim about the US in regard to the Paris Climate Agreement.
During that same period gross domestic product has increased 262 percent; the number of vehicle miles has increased 189 percent; population has increased 59 percent, energy consumption has increase 44 percent and carbon emissions have increased 23 percent – and the aggregate of six common pollutants has decreased 73 percent. All that goes to show that economic progress does not have to come at the expense of the environment, said Koch.
There will be “monumental changes” in the world by 2050 that will generate a huge demand for energy, but that will be alright because there will be abundant resources to meet that demand, projected Koch. There will be 9 billion people in the world and gross domestic product will increase by 254 percent, increasing the demand for energy by 84 percent. Electricity generation will increase by 140 percent.
Every kind of energy will have peak supplies, including liquids, coal, natural gas, renewables and nuclear.
By 2040 there will be an 8.9 percent increase in demand in the US for energy, 33 percent of which will be met by petroleum and other liquids, 29 percent from natural gas, 18 percent from coal, 8 percent from nuclear, 8 percent from alternatives and one percent from liquid bio-fuels.
The US has an abundance of resources. It has 125 years of natural gas that is “technically recoverable,” as well as 200 years of oil and 450 years of coal. As to ‘resources in place’ , there is 575 years of natural gas, 550 years of oil and 10,000 years of coal, according to the Institute for Energy Resources Analysis of the US Government. The US leads the world in recoverable fossil fuel supplies, followed closely by Russia, but about two and half times more than Saudi Arabia or China.
Because of the petroleum industry the US has gone from scarcity to abundance in oil and natural gas resources. One-third — $43.6 billion — of all US investment is in energy development of one kind or another.
There are 294 new chemical industry projects in the planning stages, which will total $179 billion in new capital investment.
Energy exports are skyrocketing. Oil output surpassed 10 million bpd in the US – the highest since 1970. Gas production is at a record 85 bcf /day and still growing, and the country is expected to become a net exporter by 2020.
While the Trump administration policies have brought about some positive changes, there are more expected, including improvements in permitting processes to increase access and improve infrastructure. Other positive changes can be expected in exports, more regulatory reform and optimization for industry, as well as more tax reform, an infrastructure package, changes in the Endangered Species Act and improvements to the Clean Air and Clean Water Acts.
About the political prospects for the mid-term elections, Koch said there is no doubt that there is a correlation to presidential job approval and midterm results. With a 43.6 percent job approval, if historical trends hold true, the Republicans could expect to lose 40 seats.
But in comparing the past to the present there are some differences in play – the mood of the country is more positive now than it has been in more than a decade. Voters are also more positive about the economy, in fact, it’s at its highest point since 2006. And, there’s never been “a wave” with unemployment below four percent.