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Oil and gas promoter criticizes tax, environmental policies

CHARLESTON, W.Va. -- The chief economist for the American Petroleum Institute criticized government policies on taxes and the environment during a speech to the Charleston Rotary Club on Monday.

"We need a tax policy that broadens our [energy company] base and reduces rates, allowing our energy companies to compete with foreign countries," said John Felmy of the API, a Washington, D.C.-based group that promotes the interests of the domestic oil and gas industries.

"We can generate a lot of employment and a lot of taxes by developing oil and gas," Felmy said.

Today, the United States spends $421 billion on importing oil every year, Felmy said. "For every $1 billion we save, we would generate 5,000 jobs at home."

Oil exported by Middle Eastern countries is "shifting significantly to China.

"Why do we pay higher gas prices today?" Felmy asked. There are three reasons. The first is China. The second is China. The third is China."

"India and the Middle East countries are also developing. This year, 77 million new cars will be made. We are now up to 1 billion cars on a global level. There is a world market for petroleum."

"For every $1 we spend on buying oil, we get 90 cents back in trade with Canada and 30 cents back in trade with Saudi Arabia. The environmental community's efforts trying to cut imports from Canada is absurd."

Felmy strongly supports the controversial Keystone XL pipeline extension, which would increase those imports. The proposed Keystone pipeline would take oil from sands in northern Alberta and transport it to refineries in Illinois, Oklahoma and Texas.

The domestic oil and gas industries, according to the API website, www.api.org, support more than nine million jobs and more than seven percent of our Gross Domestic Product.

The two industries also contribute more than $86 million to the Federal Treasury every day.

Training new workers will become an increasingly critical factor in the next few years.

"We need technical skills," Felmy said. "We have started developing relationships with universities and community colleges throughout the county."

Felmy estimates up to 50 percent of oil and gas industry workers may retire within the next 10 years.

Natural gas companies can expect particularly dramatic growth. Today, just three percent of all natural gas produced in the United States is used for transportation.

Homes and communities, industrial operations and electric power generating plants each consume about one-third of the other 97 percent of natural gas produced annually.

Today, 62 percent of all energy consumed in the U.S. comes from oil and natural gas, 20 percent from coal, eight percent from nuclear plants and nine percent from renewable energy generation.

Describing himself as a "Penn State Blue Dog Democrat" and a "conservative Democrat," Felmy said, "The West Coast provides enormous challenges for refineries.... With all the rules and regulations in California, I do not expect a new refinery to be built there."

 Felmy expects only a couple of new nuclear plants will be built anywhere in the U.S. in the near future.

"The capital costs of producing coal and nuclear energy are so high compared to natural gas."

Reach Paul J. Nyden at pjnyden@wvgazette.com or 304-3485164.


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