Oil and natural gas take us down the street and around the world. They warm and cool our homes and businesses. They provide the ingredients for medicines, fertilizers, fabrics, plastics and other products that make life safer, easier and better.

While we rely on them for most of our energy and will likely do so for years to come, as the Environmental Protection Agency (EPA) notes: “Scientists are certain that human activities are changing the composition of the atmosphere, and that increasing the concentration of greenhouse gases will change the planet’s climate. However, they are not sure by how much it will change, at what rate it will change, or what the exact effects will be.”

Despite these uncertainties it is clear that climate change is a serious problem that requires research for solutions and effective policies that allow us to meet our energy needs while protecting the environment. That’s why oil and gas companies are working to reduce their greenhouse gas emissions.

The oil and gas industry has also been implementing new emissions estimation and tracking tools to enable it to assess how well it is meeting the goals it has set for itself and report progress to the public.

On other fronts, companies are reducing natural gas flaring to cut emissions (while also adding to energy supplies) and storing CO2 underground, where it can be safely held for thousands of years.

This is just a small sample of industry efforts to be part of the solution in meeting this global challenge. We are already major contributors to the national effort to reduce greenhouse gas emissions, and are eager participants in developing the best science-based, transparent, and cost-effective policies to protect and expand our economic and environmental progress.

Since 2000, the oil and natural gas industry has invested $89.9 billion in emissions-reducing technologies, according to a study by T2 Associates – nearly as much as the rest of U.S.-based private industries combined and more than double the amount invested by each of the next three industry sectors: the automobile industry ($38.2 billion), the electric utility industry ($37.1 billion) and agriculture ($13.0 billion).

Thanks to America’s energy revolution, the broad availability of natural gas and its increasing use in the power-generation sector also is playing a significant role, helping to reduce emissions of carbon dioxide (CO2) to near 20-year lows. More indicators that industry is leading in terms of investments in emissions reduction:

  • Since 2000, industry has spent nearly $25 billion developing substitute and less carbon intensive fuels, such as liquefied natural gas, while also reducing fugitive gas emissions. Industry’s investment in fuel substitution technologies represents 51 percent of the total invested by private industries and the federal government in this technology class.
  • The oil and gas industry has invested nearly $15 billion in non-hydrocarbon technologies – including, wind, solar, biofuels, geothermal and landfill digester gas – since 2000, accounting for one out of every six dollars spent on non-hydrocarbon technologies since 2000.
  • The oil and gas industry has invested $50 billion for advanced end-use technologies – efficiency improvements, carbon capture and storage and advanced technology vehicles – representing 30 percent of the total industry and federal government investment in this technology class.
  • Since 2000, industry has invested more than $3 trillion in U.S. capital projects to advance all forms of energy, including alternatives, while reducing the industry’s environmental footprint.
  • Energy production and consumption are a large part of climate change planning and there is a great story stemming from America’s energy revolution.

    Let’s start with emissions of carbon dioxide (CO2). The U.S. Energy Information Administration tells us that 61.4 percent of electric power sector CO2 emissions reduction in years 2006 through 2014 came from fuel shifting toward natural gas:

    Natural gas use and availability is a direct products of an American energy renaissance built on shale reserves and safe hydraulic fracturing and horizontal drilling.

    The availability of affordable, clean-burning natural gas is directly impacting the power sector in positive ways – among them, helping to drive down CO2 emissions. The inescapable climate point here is that while there’s lots of talk about meeting climate targets, holding international conferences and summits to develop action plans – the United States already is achieving results.

    From 2005 to 2014 natural gas consumed by the electric power sector for generation grew 43.1 percent. During that same period greenhouse gas emissions from electrical generation fell 15.1 percent.

    Industry places a high priority on the capture of methane during oil and natural gas development and production. Because methane is the major component in natural gas, containing it means that more product can be delivered to customers.

    It’s also better for the environment. Recent EPA data shows that initiatives to capture methane are effective. From 2005 to 2014 dry production of natural gas increased 42.5 percent, with consumption by the transportation sector, pipelines and distribution increasing 43.1 percent, all while methane emission from natural gas systems fell 0.68 percent.

    The figures basically parallel major field research that shows methane emissions are being controlled at natural gas collection and processing facilities. A Colorado State University study of dozens of facilities across 13 states found that the vast majority had loss rates of below 1 percent – or, put another way, methane containment of more than 99 percent. The research further found that most of the emissions stem from correctable issues with equipment.

    America’s energy and environmental leadership is more than just flag-waving talk. When you compare the top 20 economies in the world, the United States is second to none in reducing greenhouse gas emissions from energy.

    Thanks in part to big investments in production and innovation by U.S. oil and natural gas companies the U.S. economy is growing while reducing emissions.

    When comparing GDP growth and emissions reductions, you can again see U.S. leadership. For most countries, GDP growth is synonymous with emissions growth, but this is not true for the United States. Natural gas is enabling this rare combination of increased economic growth and falling emissions.

    Nine of the top twenty economies in the world lowered emissions between 2005 and 2012 (the last year for which full data is available). But none of them lowered emissions more than the United States and grew their economies faster than the United States.

    “Energy is the golden thread that connects economic growth, social equity, and environmental sustainability.” —U.N. Secretary General, Ban Ki-moon

    Access to safe, affordable energy is fundamental to a prospering, modern society. It fuels economies – and opportunity. Without energy people struggle to secure life’s basic needs – clean water and sanitation, lighting at night, heat and cooling of homes and businesses, mobility. Energy allows a family to safely prepare a warm meal. It is linked to better health and is critical to ending poverty and extending peoples’ lives.

    The International Energy Agency says more than 1.3 billion people around the world have no access to electricity, and 2.6 billion are without clean cooking facilities. The truth is, policies and initiatives that hinder safe energy development relegate billions to lives that, at best, stand still, and more likely are losing ground.

    Meanwhile, here in the U.S., we seem to be backtracking on the gains energy has made in lifting people out of poverty. As noted in the Wall Street Journal: “…the new EPA climate-change rule will make it worse by subtracting billions of dollars every year from potential GDP by misallocating capital and undermining business confidence. This will result in few opportunities and smaller wage gains, with damage to the poorest Americans in particular.”

    Poorly designed policies seeking to address emissions have proven to be regressive on both the state and federal level. A better approach for a prosperous society would be to build upon that which is already working in the United States. It is a path of more energy, more security, more jobs and fewer emissions – and a path based on our energy and emissions realities.

    In the United States oil and natural gas supply 63 percent of the energy Americans use today and the U.S. Energy Information Administration projects that they will furnish 62 percent of the energy we use in 2040.

    Without modern fuels our world would be harsher, less healthy and less convenient – an existence far removed from what we often take for granted living in the 21st century. We know this is true because, unfortunately, more than a billion people across planet are living that existence right now, with little or no opportunity to hope for anything better – largely because they lack access to energy.

    Oil and natural gas are great energy sources and beyond their uses as fuels, oil and natural gas serve as the feedstocks for everything from the plastic in our cellphones to the materials in heart valves, guitar strings, football helmets and more. Modern life as we know it would be impossible without the fuels and products derived from oil and natural gas.

    Of the top oil and natural gas producing nations the United States and Canada are leading the way in producing more energy with fewer emissions.

    Which is why those seeking to limit U.S. production (or Canadian), and stifle opportunity, are misguided. We need policies to protect our successes, and embrace this once in a lifetime opportunity to reduce emissions, consumer energy costs and the trade deficit while increasing job growth, U.S. investment, domestic crude oil production, GDP and government revenues.


    POTENTIAL IMPACT ON U.S.
    (by 2035)
    Pro-Energy Policies Regulatory Constraints
    Oil & Natural Gas Production +8.0 -3.4
    Total Jobs Supported +2.3 million -830 thousand
    GDP/Year +$443 billion -$133 billion
    Total Government Revenue/Year +$122 billion -$18 billion
    Cumulative Government Revenue from 2016 +$1.08 trillion -$500 billion
    Total Household Income/Year +$118 billion -$43 billion
    Average Household Energy Expense -$360/year +$242/year

    Source: A Comparison of U.S. Oil and Natural Gas Policies – Pro Development vs. Proposed Constraints – 2015 Wood Mackenzie

    The EPA describes President Obama’s Clean Power Plan (CPP) as a “historic” step forward in reducing carbon emissions from power plants. However, a closer look reveals yet another government preference for a few sources that ignores the current contributions and future potential for natural gas, nuclear and hydroelectric power.

    In many ways, it’s as if the administration has charted a path forward that completely ignores the energy superhighway that is built on the back of proven zero- and low-emissions power sources. Instead, the CPP quietly steers the American electricity sector toward an off-roading adventure down an uncertain path with an unclear future.

    America’s energy revolution continues to deliver broad economic benefits while helping to reduce emissions of carbon dioxide (CO2) from electricity production to near 20-year lows. These reductions are the result of market forces. They have little to do with government programs and everything to do with the fact that the United States is the world’s leading producer of natural gas. With such an abundant supply of affordable fuel on hand, power plants already have an incentive to use cleaner-burning natural gas without government interference.

    In the CPP, EPA ignores the strong performance of current low and no-emission generation leaders (nuclear, hydro and natural gas) in favor of segments of the power industry that represent less than 7 percent of current electricity generation. Federal tax credits and other incentives interfere with the market and could have dire economic consequences. All energy sources have a role to play in supplying America’s energy needs. But using regulatory authority to benefit one power source over another in electricity generation could stifle innovation, destroy jobs and raise energy bills for those who can least afford it.

    EIA data shows that natural gas is the prime power source in 11 of the 22 states with below average emission rates. An additional eight states in this group rely on natural gas to deliver more than 20 percent of electricity consumed.

    In the 25 states with above average emission rates, targeted switching to natural gas could reduce emissions below EPA goals. Yet EPA seeks to downplay natural gas use. This is what happens when ideology and politics trump science.

    It is not just natural gas that suffers from the government’s decision to use the CPP to advantage only certain energy sources. New solar technologies can’t compete when the government dictates energy sources. The same is true for advanced biofuels and new technologies and services that could challenge and transform the electric utility industry.

    Look no further than California to see how this has played out. After passing its own directive global warming legislation back in 2006, which could be considered Clean Power Plan lite, the state has removed twice as much energy from hydroelectric and nuclear sources than has been replaced by wind and solar.

    And in a country with an abundance of rushing rivers, there is an estimated 65 GW (enough power to light up nearly 50 million homes) of available power that could be developed through non-powered dams and new resources that suffer from regulatory and legal obstacles.

    Our challenge is clear. We need to provide more energy while lowering greenhouse gas emissions. We don’t need government mandates for natural gas to make it happen; the market is doing that on its own. And a market based, all-of-the-above energy policy that encourages innovation and meets demand is the best roadmap for our future. We have made great progress on ozone, methane and GHG emissions, and progress should be allowed to continue without government interference, while allowing access to resources, markets and consumers.

    1. EPA – Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2013 – http://1.usa.gov/1HVdTsh
    2. Our World In Data – http://bit.ly/1HVdWnY
    3. IEA – Energy Poverty – http://bit.ly/1NeEvVo
    4. Energy Tomorrow – http://bit.ly/1HVe3A3
    5. EIA – http://www.eia.gov/
    6. T2 and Associates – Key Investments in Greenhouse Gas Mitigation Technologies from 2000 Through 2014 by Oil and Gas Firms, Other Industry and the Federal Government – http://bit.ly/1HVeiuW
    7. Who Owns Big Oil? – http://bit.ly/1HVekTt
    8. EPA – Profile of Petroleum and Natural Gas Systems – http://1.usa.gov/1HVeryw
    9. Methane Emissions from Natural Gas Compressor Stations in the Transmission and Storage Sector – http://bit.ly/1HVex9c