Execs pitch plan to boost oil production

U.S. business executives on Monday unveiled a plan to rev up the U.S. economy by producing more oil and gas, boosting energy efficiency and supporting renewable power.

The 76-page plan by the Business Roundtable, dubbed “a CEO vision for America’s Energy Future,” lays out a broad blueprint for lawmakers and the Obama administration to leverage and capitalize on already climbing domestic oil and gas production as well as energy efficiency gains.

Honeywell International CEO David Cote said the group believes the U.S. needs a “competitiveness agenda” where energy is prioritized.

And Chevron Corp. CEO John Watson said it is “vital that the government work with us to produce a policy framework that supports investments,” because, right now, “what’s holding us back is (the lack of) a national strategy for taking advantage of this opportunity.”

“Driven by private sector innovation and investment, the United States is poised to regain its status as an energy superpower,” Watson said. “The dramatic rise in U.S. oil and natural gas production is creating jobs and economic growth across America, but our ability to take full advantage of the historic opportunity in front of us depends upon the right policy framework.”

The major theme advanced by the group of CEOs: Take a hands-off approach to regulation.

Read more: Top Republican pledges tough oversight of new drilling rules

The executives recommended the U.S. expand access to public lands and waters “to ensure reliable supplies of coal, oil and natural gas,” while “streamlining the permitting and approval processes to expedite critical infrastructure projects,” such as pipelines to transport the supplies.

Watson specifically mentioned the proposed Keystone XL pipeline, which would ferry oil sands crude from Canada to the Gulf Coast. The State Department is currently reviewing the $7 billion project.

The executives insisted that any new federal environmental rules should undergo “thorough net cost-benefit analysis” and consideration of how they might hike energy costs or restrict economic growth.

Dow Chemical Co. CEO Andrew Liveris said “overly complex and costly regulations” have been “a major impediment to growth,” and, have exacted “a particularly heavy toll on energy exploration and production.”

The panel also tapped into industry concerns that a new layer of federal regulations governing oil and gas drilling — both proposed and speculative, possible policies — will conflict with state rules already on the books or create new obstacles to development. The Business Roundtable recommends “respecting the role that states have traditionally played in regulating oil and natural gas activity on non-federal lands” and ensuring that future rules for federal tracts are developed in consultation with states.

The Interior Department’s Bureau of Land Management is honing a plan to force disclosure of chemicals used at wells on federal lands. After unveiling a proposal last May, and taking public comments on the plan, the Interior Department decided to rewrite the initiative. A new proposal is expected later this year.

The measure is set to be the first major federal rule governing the hydraulic fracturing process that is credited with unlocking oil and gas supplies nationwide. The regulation would only cover a sliver of the United States’ onshore oil and natural gas production — roughly 6 and 13 percent respectively, according to ClearView Energy Partners — but industry officials fear it could provide the foundation and justification for broader mandates in the future. The oil and gas industry has generally argued that state regulators are best positioned to oversee drilling.

The group sees opportunities for the U.S. to foster innovation in new energy technologies, mainly by sustaining public investments in pre-market work on promising ways to improve energy efficiency or diversify our power supply. In particular, the CEOs want the U.S. to back projects that could demonstrate the viability of equipment to capture carbon dioxide emissions released from burning fossil fuels and store the CO2. That technology — still being developed — offers the potential for existing coal-fired power plants to keep running (and new ones to be approved) without running afoul of tightened environmental mandates on carbon emissions.

“Reliable, affordable energy makes the United States the location of choice for manufacturing,” Liveris said. “We have outlined a strategy to ensure America stays on top.”

The group dodged a specific recommendation for the Obama administration as it weighs whether to allow more exports of liquefied natural gas. Dow has taken a high-profile role arguing that unfettered exports could erode a competitive advantage that U.S. manufacturers now enjoy.

Cote suggested there was a false choice. “Encouraging more production overall . . . is the smart solution here,” he said, emphasizing that if more supplies come online, that can ensure “low-cost raw materials” for U.S. manufacturers as well as exports.

However, many analysts believe the biggest factor that might restrain natural gas production isn’t lack of access but relatively low prices that make some drilling unsustainable. One of the major arguments advanced by proponents of natural gas exports is that new markets for the fossil fuel would lift U.S. prices enough to keep energy companies drilling.