Oil & Gas

API's Gerard says Keystone XL decision will carry political consequences for Obama

Will President Obama's upcoming decision on the Keystone XL pipeline affect his re-election chances? During today's OnPoint, Jack Gerard, president of the American Petroleum Institute, explains why he believes Keystone XL and energy policy will be major issues in this year's election. Gerard discusses API's campaign to keep energy policy at the forefront of political discussions in Washington.


Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Jack Gerard, president of the American Petroleum Institute. Jack, thanks for coming back on the show.

Jack Gerard: Thank you.

Monica Trauzzi: Jack, Keystone XL remains in the news with House Republicans setting up a clock counting down the days that the president has to make a decision on this pipeline. What do you think the political consequences could be for the president if he decided against the pipeline? Could he lose the election over it this?

Jack Gerard: Well, I think the consequence could be quite significant. The reason I say that, Monica, is because there is a lot of support for building the Keystone XL pipeline here in the United States. It would immediately create 20,000 new jobs and facilitate the creation of a half a million jobs by 2035. And so when you look at the political dynamics surrounding this pipeline, as Canadian Prime Minister Harper said this is a "no-brainer." This shouldn't be difficult. This should never have gotten to the point of a controversy that's currently surrounding it. There's a very small minority group, a shrill group that opposes the development of oil and natural gas and they've used the pipeline as the surrogate. It's unfortunate. There's broad bipartisan support for the pipeline as we've seen evidenced by the Hill, both Democrats and Republicans. It's a real test on the part of the president. Is he for job creation or isn't he? So I think there is consequence if he makes the wrong choice. I think he ought to do the right thing, approve the pipeline, let's put our people to work and let's make ourselves more energy self-sufficient.

Monica Trauzzi: There's been some disparity over the jobs numbers themselves. You just cited 20,000 as the initial number of jobs. We had Russ Girling, the CEO of TransCanada, on the show and he said 7000. Why such a disparity over the number of jobs that we actually might see?

Jack Gerard: Well, I think it depends on the assumptions and the multipliers. And what I mean by that is, you know, some assume just direct jobs. Others assume those jobs related to the direct jobs that are created, such as, OK, I'm actually building the pipeline. Well, in order to build that pipeline I've got to hire the local Caterpillar dealer to sell me a tractor. I think that's a disparity. But I think the most important thing, Monica, to remember, everybody agrees it's a job creator. It's a $7 billion investment that runs 1700 miles across the heartland of America. It's going to create thousands of jobs. It's going to make us more energy secure and it will assist those that are unemployed and underemployed during tough economic times to get back to work, to become taxpayers and help assist in our economic recovery.

Monica Trauzzi: The environmental lobby carried a lot of weight during the last election cycle. So, you really believe that the jobs angle really is going to beat out any environmental argument that we might hear on the pipeline?

Jack Gerard: Well, in the eyes of the American people the jobs argument clearly prevails. Whether or not the president will choose to go that direction, I think it surprised a lot of people when the president chose to punt this decision until after the election and I think it was very appropriate for the Congress to say we can't wait Mr. President. We've heard those words before. We can't wait. Organized labor already has a project labor agreement on this pipeline. The president's constituency is strongly supportive of building this pipeline. We just need to do the right thing for the American people, make the decision, move on, put our people to work, make us more energy secure. Let me just add one thought there, Monica, it's very important. We look at the unrest in the Middle East today. We're having a conversation about the Straits of Horumz as result of Iranian action. Why wouldn't we want to move immediately to make us more secure with our key energy partner to the north, in this case Canada, to allow us to develop our own resources, bring jobs to the United States? As Prime Minister Harper said this is a "no-brainer."

Monica Trauzzi: So, Congress has imposed the 60-day deadline on the president. Explain how that works in the nation's best interest if the agencies who are involved in the approval process say that that's not enough time for them to do their due diligence.

Jack Gerard: Well, anyone that would say that's not enough time to do their due diligence is -- it's a red herring. And the reason it is, this pipeline has been under review and environmental scrutiny for three years. There have been two comprehensive environmental reviews that have concluded there is no significant adverse impact as result of this pipeline. The only determination the president has to make is, is this in the national interest? That's all he has to decide. The environmental issues have been dealt with. The concerns raised in Nebraska have now been dealt with and they're making a slight alteration in the pipeline path to accommodate the governor and the state legislature. They're all on board. All the president has to decide in the next 60 days is to determine if this is in the national interest and, if he says yes, the pipeline moves forward.

Monica Trauzzi: So speaking more broadly about energy policy, Congressman Markey has challenged some of the assertions that you've made about job creation within the oil industry over the next few decades. He said that the numbers are being exaggerated and, in fact, the industry has cut jobs in the last few years. Are the books being cooked in order to keep big oil relevant in the energy policy discussion?

Jack Gerard: Well, Mr. Markey's books might be cooked, I don't know. It's just amazing to me that somebody could make a suggestion that the industry is not creating jobs in this country. Let me give you two key examples that will make this point very clearly. Today North Dakota has now become the fourth largest oil producer in the United States. The unemployment rate in North Dakota is 3 percent. The average oil and gas wage in North Dakota today, $90,000 a job. That's twice their state-wide average. We are creating thousands of jobs in the state of North Dakota. In the state of Pennsylvania, where I was just a couple of weeks ago with the governor, the governor has told me over the last 18 months we have created over 90,000 jobs in the state of Pennsylvania. The Bureau of Labor statistics, everyone has concluded that the oil and natural gas industry continues to create jobs. We're one of the few bright spots in the current economic challenged environment. For anybody to suggest we're not creating jobs, they're not looking at the facts. I fully expect and they will continue to say, those that oppose the development of oil and natural gas, that they'll use whatever means they think are necessary, which I believe are irresponsible, to suggest we are not creating jobs. Nothing is further from the truth.

Monica Trauzzi: Does energy policy have the potential to emerge as a critical issue in the November elections?

Jack Gerard: Two key facts to remember, the first one is the United States is the most energy rich nation in the world. The Congressional research service just a few months ago concluded when you look at our oil potential, our natural gas potential and our coal potential, we are the most energy rich nation in this world. We have the potential to use energy as a huge stimulus to bring our economy back and put our people to work. And today the policies in the past have been to continue to rely on outside sources. If we mobilized our efforts here in the United States, recent economic analysis shows we could generate another million jobs in just the next seven years, just in oil and natural gas. So, it's a huge opportunity for economic recovery and I believe it will be central to the presidential and to the Congressional debate and elections this fall.

Monica Trauzzi: How much money are you going to spend making sure that it is a key issue in the elections?

Jack Gerard: Well, just a few days ago, Monica, we have launched now a Vote for Energy effort. It's an educational outreach effort to remind the American people that energy should be front and center in this debate. We need to recognize the foundational role it plays in our domestic economy and what it could do to help create jobs. So we will spend significant resources to educate the public. This isn't about picking presidential candidates or picking political candidates of any persuasion. Energy should not be a partisan issue. It's not about Democrats. It's not about Republicans. It's about the health of the American economy. We're going to rely on oil and natural gas for many years to come. Let's get about producing it here in this country, help in economic recovery, produce revenue for federal and state governments and make us more energy secure so we don't have to rely on those volatile parts of the nation.

Monica Trauzzi: All right, we're going to end it there. Thank you for coming on the show, nice to see you.

Jack Gerard: Thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]



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