Securing America’s Energy Future: A Reality Check America’s Oil and Natural Gas Industry Securing America’s Energy Future: A Reality Check Rayola Dougher API Senior Economic Advisor dougherr@api.org

In 2008, which of the following countries was the largest U. S In 2008, which of the following countries was the largest U.S. supplier of imported oil? Saudi Arabia Canada Venezuela China Not Sure 53% 12% 13% 2% 28%

What percentage of oil imports could be displaced if oil and natural gas companies were allowed to produce resources off the U.S. coasts? Less than 10% 10% to 15% 16% to 20% 21% to 30% Not Sure 11% 17% 23% 37%

Science has revolutionized the search for oil and natural gas Advanced methods such as 3D seismic surveys, 4D time-lapse visualization, remote sensing, and other exploration technology have revolutionised the exploration process for oil and natural gas, improving the industry’s ability to locate potential oil and natural gas reserves with greater accuracy and reducing the environmental footprint.

Directional and horizontal drilling techniques enable producers to reach reservoirs that are located miles away from the drilling rig, a capability that is particularly useful for offshore development. Horizontal drilling may also allow a producer to reach more of the reservoir so that more resources can be recovered from a single well. More energy-efficient drilling and production methods cut emissions of air pollutants and greenhouse gases, practically eliminate spills from offshore platforms, and translate into enhanced worker safety and better protection of groundwater resources. .

Subsea production systems includes a series of gathering lines that connect the production from multiple wells into a single processing hub, allowing the production from the wells to be transported to a platform, where the oil, gas and produced water are separated for transport to shore through a pipeline. The most sophisticated systems operate underwater, separating the oil, gas and produced waters so the product can go directly into pipelines to shore. These systems are being installed at depths of almost 10,000 feet of water in the Gulf of Mexico, where deepwater development plays a significant role in current and future energy production. Using this advanced technology, producers can use a single platform to develop resources from 40 miles away. Drillships positioned in the deep waters of the Gulf of Mexico can drill to a total depth of about 40,000 feet to find resources. These drillships can operate in water that is almost 10,000 feet deep – that’s almost two miles to the ocean floor – and then another 30,000 feet below that.

Oil profits are too high Key Policy Assumption Oil profits are too high

In 2008, how many cents did the U. S In 2008, how many cents did the U.S. oil and natural gas industry earn on every dollar of sales? 0 to 10 cents 11 to 20 cents 21 to 30 cents 31 to 40 cents Not Sure 12% 17% 24% 35%

What percent of U.S. oil companies’ stocks are owned by corporate management? More than 25% Not Sure 5% 13% 14% 27% 41%

Tax oil to fuel alternatives Key Policy Assumption Tax oil to fuel alternatives

How much do oil companies pay in income taxes as a share of their income? Less than 15% 15% to 30% 31% to 45% 46% to 65% Not Sure 31% 17% 9% 4% 38%

How much did the oil and natural gas industry pay in taxes over the past 3 years? Less than $100 billion $100 to less than $200 billion $200 to less than $300 billion $300 billion or more Not Sure 25% 11% 10% 43%

Carbon Emissions Per Capita Assuming Waxman-Markey Targets Are Met Metric Tons of CO2 Per Capita Metric Tons of CO2 Double Line (Quarterly Data) Targeted Reductions Source: Garrett A. Vaughn, “How Much Will Americans Pay to Meet President Obama’s Timetable for Cutting Greenhouse Gas Emissions?” Manufacturers Alliance/MAPI, ER-676, April 2009.

Assuming huge increases in alternative energy sources, what percentage of the U.S. energy demand will be met by oil and natural gas in 2030? 0 to 15% 16% to 30% 31% to 45% 46% to 60% Not Sure 6% 22% 19% 16% 37%