- The Washington Times - Wednesday, November 26, 2008

The U.S. oil and natural-gas industry’s new lead lobbyist said Tuesday he doubted that President-elect Barack Obama would be able to deliver on his campaign promise to reduce American oil consumption by 10 million barrels a day by 2030, but endorsed efforts to create more “green” jobs, many of which, he said, would be situated at oil companies.

In an interview with reporters and editors of The Washington Times, Jack Gerard, the president of the American Petroleum Institute (API), also said he was confident that Congress would not reinstitute a ban on offshore drilling despite Democratic gains in the last election.

“That would be part of the old way of doing business, as opposed to this new paradigm,” Mr. Gerard said.

He warned, however, that additional drilling could be delayed by the new secretary of the interior.

Oil and gas, Mr. Gerard said, would continue to be a major staple of U.S. energy consumption for many years to come.

“Oil and gas is the backbone of the American economy. It has been for many years; it will continue to be for many more years,” said Mr. Gerard, who has been at API for just a few weeks. “We could quadruple what we’re talking about in the area of alternatives and renewables that were doing today, and what would that give us? About 3 percent of our energy production.”

Environmental groups, who supported Mr. Obama’s campaign and Democrats’ successful efforts to achieve wider margins in Congress, released their own lengthy list of energy priorities for the president’s transition team in a 400-page report Tuesday.

View Part 1 of interview below. Listen to Part 2 and 3 at washingtontimes.com/media

The incoming Obama administration is expected to push hard for new investments in renewable energy, and congressional leaders have said they will press forward with plans to cap carbon-dioxide emissions - all of which appear to bode poorly for “dirty fuels,” such as oil.

But Mr. Obama’s call for more “green,” environmentally friendly jobs would actually benefit the oil and gas industry disproportionately, Mr. Gerard said.

“We are major players in emerging technologies,” he said in the wide-ranging interview.

Oil companies have come under fire in Washington since the price of gas spiked to a national average of $4 a gallon earlier this year. Record profits by the nation’s oil giants became a popular point of complaint for Democratic lawmakers during the campaign.

API began spending tens of millions of dollar a year in advertising not long after Hurricane Katrina struck in 2005 to deflect calls for a windfall-profits tax on oil companies and proposals to end billions of dollars in tax breaks for oil producers. Mr. Obama advocated a windfall-profits tax, saying he would like to subsidize renewable-energy sources with the extra revenue collected.

Mr. Gerard said he planned to continue spending significant amounts on issue advertising, but declined not give a specific number.

“I think we’ll play offense where we can. We’ll play defense where we have to,” he said.

Mr. Gerard defended oil-company profits, saying they were in line with what other industries earned by percentage. He also argued that any new tax on oil would stall Mr. Obama’s energy priorities.

“It creates a double disincentive,” he said. “It takes [away] the potential for us to invest in the future, and it also tells us that now we have to look overseas because we have to go look at more competitive opportunities than we have here in the U.S.”

Environmental groups have been optimistic about building alternative-energy sources in the wake of Mr. Obama’s victory.

New jobs in renewable energy will be part of a Democratic stimulus plan, Mr. Obama said Tuesday, and Senate leaders and environmentalists have talked up the president-elect’s recommendation to invest $150 billion in alternative-energy projects.

“We need to dig our way out of the hole that we are in with a green shovel,” said Larry Schweiger, president of the National Wildlife Federation, in a conference call with reporters Tuesday.

Oil companies are broadly supportive of any investment in renewable energy, Mr. Gerard said, but he insisted the way to fund such investments would be opening up federal lands for oil exploration and funneling tax revenues derived from those projects into alternative energy.

“We think the oil and gas industry can make a major contribution to that overall effort,” he said. “That’s where our discussion ought to be, not on punitive measures to say, ‘Let’s take one of the few bright spots of our economy, and let’s further dampen it.’”

Mr. Gerard also questioned whether the technology is available to make a dramatic break from fossil fuels that most environmentalists support.

“They think somehow we’re going to flip the switch and go from left to right like that,” he said, snapping his fingers for emphasis. Oil companies are “moving there, but they’re moving there consistent with market conditions.”

Energy policy next year will be expected largely to be driven by the White House, with Congress following Mr. Obama’s cues, Mr. Gerard predicted.

“Right now, every indication, as I read the tea leaves, is it will be a White House agenda,” said Mr. Gerard.

Mr. Obama elevated talk about renewable-energy sources - including solar power, wind turbines and other “green” sources - during his campaign, and reiterated his commitment in a recorded message played at California Gov. Arnold Schwarzenegger’s climate conference last week.

But Mr. Gerard said he hoped Mr. Obama would “govern from the center” and that “cooler heads will prevail” on a string of critical energy and environmental policies.

“We’re prepared to roll up our sleeves and say ‘Yeah, we’ll compromise on some questions,’” he said. “Let’s sit down and talk about where are those opportunities.”

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