After being shut out of President Barack Obama's job summit at the White House on Thursday, oil industry leaders have begun their own major push to stimulate US employment by offering legislation that aims to increase and streamline access to acreage currently off limits to drilling.
The American Petroleum Institute (API), which represents around 400 oil and gas firms and is the oil industry's top lobby group, is submitting a set of legislative measures it believes could create hundreds of thousands of additional jobs in the sector if enacted.
The plan, a copy of which was obtained by Oil Daily, urges any job-creation package to include a requirement for the US Interior Department to proceed with an offshore leasing schedule started by the Bush administration last year. That plan envisaged 31 lease sales off the Atlantic, Pacific, Gulf of Mexico and Alaskan coasts between 2010 and 2015 (OD Feb.11,p1).
API is also proposing leasing in non-wilderness portions of the Arctic National Wildlife Refuge (ANWR), along with continued access to the Beaufort and Chukchi Seas off Alaska's northern coast.
Although many of the items on API's wish list may fail to garner significant support from the Democratic-controlled Congress or the White House, expanded offshore drilling has already emerged as a potential bargaining chip for a compromise on energy and climate legislation in the Senate.
"Our industry has a proven track record of being able to create and protect well-paying American jobs and this legislation will do just that and generate billions of dollars in government revenue," said API senior upstream policy adviser Erik Milito. "We will be sharing these ideas with all policymakers interested in job creation."
In a teleconference on Thursday, API officials expressed frustration at not being invited to the White House to offer their ideas about job creation, particularly since the oil industry is one of the nation's largest employers, supporting about 9.2 million jobs and generating 7.2% of US gross domestic product.
"We asked to come but none of us were invited," said API Chairman Larry Nichols, who is also chairman and chief executive of Oklahoma-based Devon Energy. "Their focus is on green jobs and in this administration jobs that are politically correct," he added.
Obama is under tremendous pressure to create jobs as unemployment reached a 26-year high of 10.2% in November. The president intends to formally announce specific job growth initiatives next week.
Some members of Congress are also looking to draw up jobs legislation once the current debate on health care legislation draws to a close.
The API argues that Obama's policies will have a potentially destructive impact on employment and the group's proposals suggest it intends to be serious player in the broader discussion about jobs.
Of particular concern to the API is cap-and-trade climate change legislation under scrutiny in the Senate, along with the president's 2010 budget, which would roll back oil industry tax breaks and impose higher taxes on some Gulf of Mexico production.
"The president's budget would take somewhere between 20-25% of the cash that independent companies, like my company, have to invest in oil and gas production," Nichols stated. "The only way we can pay for the measures in that budget would be to dramatically reduce employment and cut back drilling of oil and gas wells in the United States."
To date, Obama has offered most of his support to energy companies that produce renewable energy sources as part of his goal to curb greenhouse gas emissions and address global climate change.
Most prominently, economic stimulus legislation signed into law earlier this year included an array of subsidies, grants and other financial incentives for low-carbon renewables like wind, solar, geothermal and biofuels.
Separately, Independent Petroleum Association of America (IPAA) chairman Bruce Vincent, sent a letter to Obama Thursday highlighting the potential for job growth in domestic shale gas plays (OD Jul.28,p1).
Vincent said economists had originally predicted that the Barnett Shale in Texas would create 70,000 jobs -- but he pointed out that the play had already created 111,000 as of 2008.
Penn State University has conducted similar research on the potential of the Marcellus Shale formation in the mid-Atlantic.
"Last year alone, according to Penn State, 29,000 jobs were created -- and more than 50,000 jobs are expected to be created by the end of this year," Vincent said.
API President Jack Gerard said the oil industry does not need any financial incentives to create new jobs.
"We're not looking for any subsidies or stimulus, just more access," he said.
Lauren O'Neil and Paul Merolli, Washington
