8/6/2019 Letter from U.S. Chamber of Commerce President and CEO Tom Donohue to President Obama on Energy

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CHAMBER OF COMMERCEOF THE

UNITED STATES OF AMERICA

THOMAS J. DONOHUE 1615 H STREET, N.W.PRESIDENT AND WASHINGTON, D.C. 20062-200

CHIEF EXECUTIVE OFFICER 202/463-5300 202/463-5327 FAJune 7,2011

The PresidentThe White HouseWashington, DC 20500Dear Mr. President:

The dramatic rise of gasoline prices has focused the nations attention on ourenergy policies and the steps we need to take to secure Americas energy future. Thecurrent turmoil in the Middle East and North Africa underscores the compellingnational security imperative that our nation becomes more energy self-sufficient. Youhave appropriately called for our country to responsibly use more of our own resourcesbut, thus far, the requisite actions from the responsible departments in youradministration have not been forthcoming.

The purpose of this letter is to suggest specific actions that you could directagencies to take in order to implement the policy direction you have recently ouffined.The stakes for our nation are high. According to the International Monetary

Fund, every $10 increase in a barrel of oil will shave .5% from GDP growth. Last yearAmericans paid $265 billion nearly half of our trade deficit to import oil. There aremany promising sources of crude oil in the U.S., but the vast majority of them arecurrently off-limits to exploration and production. The U.S. Department of Energy hasestimated that the United States has in excess of one trillion barrels of oil. A WoodMcKenzie study released in January estimates that increasing access to federal energyresources would create an additional $150 billion in federal and state revenue and addmore than 500,000 jobsjobs in every region of the country and jobs that pay wellabove the national average.Offshore Resources

The U.S. Outer Continental Shelf (OCS) conservatively contains 86 billionbarrels of undiscovered, technically recoverable oil resources, yet 97% of the OCS isnot currently leased. The Energy Information Administration (ETA) recently projectedthat domestic crude production will begin to decline in 2011reversing the recent

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positive trendresulting in a reduction of more than 116 million barrels through 2012,almost all of which is directly attributable to a 30 percent loss from the Gulf of Mexico.

After the Macondo accident, the petroleum industry quickly reacted in testingand demonstrating its world-class safety systems as well as investingmore than$1 billion to develop state-of-the-art response and containment systems. However, ayear later, the Interior Department has not ye t issued permits for many of the existingrigs to get back to work nor issued final regulations for new exploration. Significantly,shallow water exploration has also slowed. This has had a crushing impact on theGulfs economy and especially on smaller independent oil and gas companies, whichhold half of all Gulf deepwater leases.

> We urge your administration to finalize the new regulations and ensurethe newpermitting process is fair, predictable, timely, and transparent.One of the most significant missed opportunities is the Department of Interiors

proposed Five-Year OCS Leasing Program for 2012-2017 which greatly restricts accessto new leasing areas even beyond the limitations that were in place in the prior plan.

> We urge your administration to revisit the 2012-2017 leasingplan toinclude areas in the GulfofMexico, Alaska, andAtlantic coast that wereincluded in prior versions of the plan.

Arctic ResourcesThe Arctic region holds enormous promise, containing as much as 90 billion

barrels of oil and many countries, including Russia, Norway, Denmark, and Canada areall laying claim. It is imperative that the U.S. not sit idly by while other countries areaggressively pursuing their interests in the Arctic. The current National SecurityPresidential Directive (NSPD 66) calls for the U.S. to, assert a more active andinfluential national presence to protect its Arctic interests and project sea powerthroughout the region. In 2008, the U.S. Geological Survey (USGS) estimated that theU.S. stake in the Arctic contains 30 billion barrels of oil. A recent study conducted bythe University of Alaska estimates that developing resources off the north coast ofAlaska will create 35,000 new jobs. In U.S. waters where Arctic leases have alreadybeen paid for and issued, exploration remains idled awaiting air-quality permits thathave been caught in a regulatory carousel at the Environmental Protection Agency foryears.

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> We urge you to ask the Senate topass the Law of the Sea Treaty to ensurethat other nations do not infringe on U.S. resources in the Arctic.

> We urge your administration to expeditiously issue the necessarypermits,ineluding clear airpermits, and quickly approve thepending explorationplan which far exceeds regulatory safety standards.

Onshore ResourcesAccess to federal lands onshore has been increasingly restricted over the past two

years. One of the first official acts that the Department of Interior took after yourinauguration was to retroactively cancel nearly 80 leases in Western states, a decisionbased on rationale that was later challenged by the Departments own InspectorGeneral. The U.S. Geological Survey estimates that onshore federal lands contain 30.5billion barrels of oil, but exploration and production on federal lands continues todecline pushing the industry to private lands which have less restrictive barriers.

The U.S. also has massive unconventional crude oil reserves which could exceedtwo trillion barrels. Because this f igure is substantially larger than the total provenreserves of unconventional crude oil in the rest of the world, the global energy picturecould improve dramatically if even a small fraction of these resources can meet thegeological, technological, and economic thresholds for classification as proven reserves.Yet, in 2009, the Department of Interior acted to prevent access to unconventional oilresources, even for purposes of research and technology development.

> We urge your administration to reverse thepolicies put in place since 2009that have si-niflcantly reduced the areas available for oil and naturalgasexploration on federallands and alsoproceed with the rulemakings thatwill allow the private sector access to oil shale resources in order to furtherdevelop the technologyneeded to unlock these massive resources.

North American ImportsWith increased production of oil sands in Alberta, Canada has become our

largest single source of imported oil. As Canadas production increases, we need newinfrastructure to ensure we have access to this vital resource and do not forfeit it to

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Asian competitors. Construction of the KeystoneXL pipeline will do exactly that,allowing an additional 1.1 miiiion barrels of oil per da y to be imported from Canada1.1 miflion barrels that will not need to be imported from unstable regions of the world.Construction of this pipeline, and the 250,000 jobs it will create, ha s been delayed as itawaits a Presidential Permit to be issued by the State Department.> We urge your administration to quickly approve the Presidential Permitfor the KeystoneXLp4eine and reject efforts to prevent importation ofCanadian oil.Your administration has an opportunity to create hundreds of thousands of jobs,

foster billions of dollars of domestic investment, and significantly increase federal andstate revenues, while leading the country towards a more secure energy future. Takingthe steps outlined above would also significantly enhance our national security.

As our economy continues to struggle, I ca n think of little that is more importantfor our economic future than getting it right on energy. W e stand ready to work withyou, your administration, and the Congress to make this happen.

Sincerely,

ThomasJ. Donohue