Energizing America: Facts on U.S. Energy Policy

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1 Energizing America: Facts on U.S. Energy Policy JULY, 2012

2 OIL & NATURAL GAS INDUSTRY LABOR MANAGEMENT COMMITTEE 2

4 API 500+ Member Companies Largest integrated to small independents, service and supply companies, marine shipping and pipelines MISSION: To influence public policy Government Affairs Federal/State/Mobilization Communications Policy Analysis Legal Standards & Certifications

5 API State Petroleum Councils Allied Oil & Gas Associations 5

6 3.3% 3.7% 3.5% 19.7% 25.9% The Energy Reality The U.S. will require 10% more energy in 2035 and more than half of it will be met by oil and gas 2.6% 5.5% 8.6% 21.1% 25.2% 2.8% Hydroelectric 11.7% Biomass & Renewables 8.7% Nuclear Coal Natural Gas 20.0% 25.1% 43.8% 36.8% OIL 31.5% Source: Energy Information Administration

7 The Energy Reality 2010 Oil and Natural Gas 62% 2035 Oil and Natural Gas 56.6% Includes doubling of biomass/renewables and efficiency improvements Question is not WILL we need oil and natural gas? Question is WHERE will we get it? 7

8 Economic impact of oil and natural gas industry on Missouri s economy Supports 111,000 Missouri s jobs or 3.2% of the state total Supports total value added to Missouri s economy of $10 billion or 3.8% of the gross state product

Development of Canadian oil sands would benefit the U.S. economy For every two jobs supported in Canada, one job will be supported in the U.S Canada s oil sands can support 600,000 U.S. jobs by 2035.

11 Development of Canadian oil sands would benefit the U.S. economy For every two jobs supported in Canada, one job will be supported in the U.S Canada s oil sands can support 600,000 U.S. jobs by For every US dollar spent on Canadian exports (i.e. crude oil) up to 90 cents is spent on imports of US goods and services to Canada. $775 billion dollars added to our GDP over next 25 years.

FILLING AMERICA S GAS TANK Within 12 years

Oil from rest of world Biofuels Oil from

12 FILLING AMERICA S GAS TANK Within 12 years Canada & U.S. can provide all our liquid fuel needs Sources of liquid fuel supply: % 10% 13% 53% Oil from rest of world Biofuels Oil from Canada US oil production 10% 18% 72% EIA forecast Potential Sources: EIA; Wood Mackenzie

13 The oil and natural gas industry is one of the most heavily taxed industries in America Income Tax Expenses as a Share of Net Income before Income Taxes(2011) 40.6% 25.1% Oil and Natural Gas Companies S& P Industrials Excluding Oil and Natual Gas Companies Source: Compustat North America Database, April 2011 update.

14 America s oil and natural gas companies pay their fair share 1220 L Street, NW Washington, DC

15 Who owns U.S. oil and natural gas companies? Answer: tens of millions of Americans Pension Funds Source: Who Owns America s Oil and Natural Gas Companies, SONECON, October 2011

16 Heroes Who s Betting on America? Exxon Mobil 11.7 Occidental Petroleum 6.2 ConocoPhillips 5.6 Chevron 4.8 Hess 4.4 July 10, L Street, NW Washington, DC

than the world average. That has saved U.S. companies and consumers an average of $566 million a day for the last year, chief of commodities research Francisco Blanch said. The U.S., long an energy importer, is now exporting $67.

17 The economic benefits of far-reaching new finds of domestic oil and natural gas are fast approaching $1 billion a day and may be keeping the U.S. out of another recession, according to a new study by Bank of America Merrill Lynch. natural gas is so much cheaper in the U.S. than the world average. That has saved U.S. companies and consumers an average of $566 million a day for the last year, chief of commodities research Francisco Blanch said. The U.S., long an energy importer, is now exporting $67.9 million per day of finished petroleum products Energy is beginning to carry America, Blanch said. June 11, 2012 New oil from Canada has cut the average price the U.S. pays for imported crude to $6 a barrel less than world averages, 1220 L Street, NW Washington, DC

18 A large majority of Americans support increased domestic oil and natural gas development Harris Poll Results on Increased U.S. Oil and Natural Gas Development 87% 83% 82% 72% Lead to more American jobs Reduce energy costs Increase energy security Deliver more revenue to government Source: Harris Interactive telephone poll, January 2012

19 API Advocacy Influence Public Policy Reach Public & Policy-makers Build Credibility 1220 L Street, NW Washington, DC