Guest Post: The U.S. Election and Energy Policy
A little over a month ago, Americans elected President Obama for his second term. Faced with four more years, the American oil and gas industry has been analysing and predicting how the President’s energy policy will affect them.
In particular, the industry is focusing on decisions President Barack Obama will make to regulate or promote natural gas drilling in the United States. Whist the natural gas boom may be viewed as an overnight success by those outside the USA; it has been some 25 years in the making. The natural gas industry supports more than 600,000 jobs and over the next 25 years, this is forecast to rise to 1.6 million. There is no doubt that the industry has the capacity to transform the American labour market and economy.
However, the method used to extract natural gas, hydraulic fracturing, or fracking, is besieged with controversy from environmental groups. Large volumes of water, along with sand and hazardous chemicals, are required to inject underground to break rock apart and free the oil and gas.
The development of natural gas prompts several tough choices. On one hand, business leaders don’t want government legislation to slow the pace of the natural gas industry and prevent the flow of a relatively clean, cheap domestic energy over future decades into the US. On the other hand, natural gas is perceived by green campaigners as a potential threat to air and water and also to the developing renewable energy industry. Additionally, there is public and political support for a self-supporting future when the US doesn’t have to rely on foreign imports for its energy supply.
Another project dividing politicians, the public and campaign groups is the Keystone Pipeline, a 2,150-mile pipeline that transports crude oil from Hardisty, Alberta to markets in the American midwest. The proposed Keystone XL, due to be decided on early next year, would extend that pipeline to the U.S. Gulf Coast, which has the largest concentration of oil refining and shipping operations in the world. If the pipeline extension project is approved, it will transport 830,000 barrels of heavy crude oil from the Canadian oil sands to U.S. refineries for processing and distribution around the United States and the world.
A recent poll by The American Petroleum Institute revealed that 73% of Americans support American production of oil and natural gas. 91% believe that this will lead to more American jobs and 75% support building the Keystone XL pipeline. They encourage the President to approve the necessary cross-border permit. API believe that if the project is approved, it will result in job creation and eventually US energy independence.
Earlier this year, the President spoke at a community college and said, "We can't have an energy strategy for the last century that traps us in the past. We need an energy strategy for the future – an all-of-the-above strategy for the 21st century that develops every source of American-made energy.” It remains to be seen which energy strategy Obama chooses and what legacy he leaves.
The Human Capital blog - brought to you by PennEnergy.com - presents the insights of top executives from Maxwell Drummond International, a world leading retained search consultancy offering professional search services to clients in all sectors of the energy and natural resources industries.
Photo Credit: League of Women Voters of California via Flickr CC