2015 TOMORROW Table of Contents The American Petroleum Institute Our Energy Tomorrow .............................................................. 2 Jack Gerard, The American Petroleum Institute The American Petroleum Institute (API) is a America’s Petroleum Renaissance ................................................... 5 national trade association that represents The American Petroleum Institute all segments of America’s innovation-driven oil and natural gas industry. Its more than Nuclear Energy Reliably Powers America ............................................. 9 The Nuclear Energy Institute 600 members — including large integrated companies, exploration and production, Hydropower | A Wave of Potential for a Renewable Energy Future ...................... 13 refining, marketing, pipeline, marine shipping The National Hydropower Association and support businesses, and service and Solar Energy in America Shines Bright .............................................. 17 supply firms — provide most of the nation’s The Solar Energy Industries Association energy and are backed by a growing Geothermal Power | Renewable Energy from the Earth’s Warmth ...................... 21 grassroots movement of more than 27 million The Geothermal Energy Association Americans. The industry also supports 9.8 million U.S. jobs and 8 percent of the U.S. Special Section | Infrastructure — The Essential Link to a Secure Energy Future ........ 25 economy, delivers $85 million a day in Natural Gas | America’s Abundant, Clean Energy ..................................... 29 revenue to our government1 and, since The American Petroleum Institute 2000, has invested more than $3 trillion The Attributes of Wind Energy are Adding Up ........................................ 33 in U.S. capital projects to advance all The American Wind Energy Association 2 forms of energy. Electricity from Coal is a Vital, But Threatened, Energy Source ......................... 37 The American Coalition for Clean Coal Electricity Biomass Power | Ready, Proven and Cost-Effective Energy ............................ 41 The Biomass Power Association Energy Efficiency | A Great American Success Story .................................. 45 The American Council for an Energy-Efficient Economy Conclusion ....................................................................... 49 Jack Gerard, The American Petroleum Institute References ...................................................................... 51 Our Energy Tomorrow Jack Gerard, The American Petroleum Institute America now occupies a position of energy Today, different sectors of the economy rely U.S. Energy Consumption by Sector, 2012 leadership that was unthinkable a short on certain forms of energy. Transportation Energy is time ago. Gone are the days of uncertainty is largely fueled by oil, while electricity Total Energy Consumption by Fuel Primary Energy Consumption by Sector and Fuel Type inseparable and concern over having the supply of generation is powered by coal, nuclear, Nuclear Transportation Power energy we need, when we need it. Today, 12 8% 92% natural gas and renewables. Looking Renewable from America’s Energy the United States is the world’s top producer ahead a quarter century from now, this is 9% Industrial 3% 5% of natural gas,3 the world’s leading refiner not expected to change,13 which means each economic growth 40% 43% 7% 10% of petroleum products,4 and very soon Oil energy source — from oil and natural gas to 37% 5 Coal Residential and Commercial could be the leading producer of oil. These solar and wind energy; from coal and nuclear 18% and job creation, developments are strengthening America’s to hydropower, geothermal and biomass — 76% 17% 6% energy and economic security and benefiting Natural Gas upon which will remain essential to successfully meet 28% Electric Power tens of millions of individuals, from current America’s future energy needs. Jack N. Gerard 41% 21% 25% 12% rests a thriving and future workers in the industry to those President and CEO Such is the current State of American 1% API who have pension plans or 401(k) retirement Oil Natural Gas Coal Renewable Energy Nuclear Power quality of life accounts that invest in oil and natural gas Energy, and hence, the emphasis of API’s Source: AEO 2014, Tables A2 and A17, May 2014 companies,6 and for every American every 2015 report. Rather than focus solely on the and secure future day in maintaining a high quality of life. oil and natural gas industry, API this year U.S. Energy Consumption by Sector, 2040 is pleased to partner with organizations for generations But this is only part of America’s larger energy representing various energy sectors to Total Energy Consumption by Fuel Primary Energy Consumption by Sector and Fuel Type story. The United States is in the midst of highlight the contributions of each toward Nuclear Transportation to come. Power a new era in domestic energy abundance 8% 87% 7% 6% America’s current and future economic well- Renewable characterized by rising use of renewable Energy being, and collectively stress the importance 12% Industrial energy7 and increased oil and natural gas of adopting a lasting “all of the above” 5% production that is strengthening our economic Oil 39% 44% 12% energy strategy. 32% 8 outlook and enabling America to emerge as a Residential and Commercial Coal global energy superpower.9 It is a remarkable Energy is inseparable from America’s 18% 81% 14% 5% transformation that has been made possible economic growth and job creation, upon Natural Gas Electric Power because America is uniquely rich in energy which rests a thriving quality of life and secure 30% resources, a talented workforce and cutting- future for generations to come. The constant 38% 19% 25% 16% edge energy technologies. Nuclear energy, pursuit of innovation, driven by both robust Oil Natural Gas Coal Renewable Energy Nuclear Power fossil fuels and renewable energy sources competition and entrepreneurial spirit, has Source: AEO 2014, Tables A2 and A17, May 2014 alike are vital components of the larger enabled the United States to safely develop energy portfolio working to keep our economy a spectrum of energy resources. With smart moving.10 And with both world and U.S. public policy choices and a regulatory system energy demand expected to increase in the that supports domestic energy opportunities, future,11 the continued availability of the full the United States can realize a prosperous range of America’s energy resources will grow energy tomorrow characterized by energy in importance. abundance and economic security. 2 | OUR ENERGY TOMORROW | 3 America’s Petroleum Renaissance The American Petroleum Institute Oil has been the foundation of the expansion With smart policies that encourage the safe and modernization of America’s economy production, transport and refining of North Looking to for more than a century. While the United America’s abundant oil supplies, the United tomorrow, States in recent history largely looked to States can continue to be a global economic foreign nations to satisfy its demand for oil, and energy leader well into the future. petroleum will new cutting-edge technologies now enable America to capitalize on abundant domestic A Foundation for America’s continue to be petroleum resources to increasingly meet its Economic Recovery own current and future energy needs. The oil industry has been a steady source of fundamental growth and job creation in a still-struggling The results are striking. Since 2008, America’s to America’s economy, and families and local communities crude oil production has surged by 70 percent, are reaping the benefits. The industry rising from an average of 5 million barrels per economic growth SE 18 supports 8 percent of the U.S. economy. day in 2008 to 8.6 million barrels per day in The refining industry alone, which plays and prosperity. August 2014.14 At its current production rate, a critical role in powering America’s the United States is anticipated to surpass economic engine by producing fuels and both Saudi Arabia and Russia, historically two petrochemicals, supports $289 billion in top energy producers, to become the world’s U.S. GDP and another 529,000 jobs.19 At the largest producer of oil this year.15 height of the recession when the economy Not surprisingly, America’s new era in oil was losing jobs, direct employment in production has reverberated throughout the extraction grew by more than 300,000 jobs economy. The oil and natural gas industry between 2009 and 2011, according to two CU contributed $1.2 trillion to U.S. Gross reports from consulting firm PwC US.20 Domestic Product (GDP) in 2011, and Jobs in the industry span a number of at a time when other industries have specialized fields, and workers earn been slow to add jobs in the wake of the higher-than-average wages — in fact, recent recession, the oil industry supports nearly double the national average wage 9.8 million jobs across the nation, up across all industries.21 Career opportunities 600,000 from just two years earlier.16 will continue to grow with the industry, Looking to tomorrow, petroleum will continue particularly among women and minorities. to be fundamental to America’s economic Of the nearly 1.3 million new job growth and prosperity. Oil represents the opportunities expected to be created by lifeblood of the U.S. economy, providing for 2030, 408,000 of them are projected to RE more than one-third of our current energy be held by African-American and Hispanic needs, and this is not expected