Thank you for those kind remarks and thanks for the opportunity to be here with you all again. As I mentioned, we’ve been very busy since president Trump was elected and as Alex mentioned I served on the president’s transition team and there we did a lot. Mike Mckenna who is with us here was on that team as well as my US colleagues.
One of the most important things we did on that transition team was put together the president’s energy blueprint. A lot of the things that have been going on in the last two years in the administration derive from his promises on the campaign trail that were put into place for use through the transition and beyond obviously. One of the things that has been so great about president Trump’s position is that he has a keen understanding of the importance of developing our energy resources. I mean all our energy resources, including our oil and coal and natural gas resources which was a stark contrast to the previous administration whom had done virtually all it could have done to try to slow down the Shell revolution in the United States. Because of the things that we have done in the United states many of the producers we have are a direct result of the fact that a lot of these resources were on private lands and not federal lands. We have, as you all know, created what is the potential to change the global energy landscape, but in order to achieve that it is important to understand that there are two conversations taking place right now with respect to energy and climate policy and with respect to president Trump and how the media has portrayed president Trump. I like to describe it as finding the signals through the noise. And the noise quite frankly is corporate interests, politicians and bureaucrats and green activists who are pushing the anti-fossil fuel agenda in the name of climate change. They are selling a narrative that the climate necessitates energy transformation away from coal and natural gas and oil, and towards energy that is free from carbon pollution. There are many voices and many names and faces in that movement but the ultimate goal is control. If you control energy you control an economy if you control an economy you control its people. That’s the noise.
But the reality is the signal. 30 years ago coal oil and natural gas provided humanity with roughly 80 % of this energy. Today that number is roughly 80 %. And 30 years from now according many forecasts that number is …. about 80 %. The loud voices out there that say that these resources are destroying the planet but the fact is that by every measure human are better off today than in any time in history year over year less and less of the world population lives in poverty. The global middle crises is exploding and access to affordable and reliable energy is a major driver in this protest. This is BP’s energy outlook forecast even the company that is now calling itself beyond petroleum projects that coal oil and natural gas will make up 75 % of our energy till 2040.
So what do we have to offer? To me it’s pretty simple – economic, opportunity and our political system.
Forecasts expect the United States to become a net energy exporter by 2021. The International energy agency expects the US to provide 70 % of the increasing global liquids production capacity by 2024, 4 million barrels a day. IEA also predicts that the US oil and natural gas liquids production will increase to 19.6 barrels a day from 15 in 2018. This is largely due to the Permian base in Texas. The Permian production is 1 million barrels a day from just last year and is expected to increase by an additional million barrels a day by 2020, especially as new pipelines are brought online.
After a 20 year decline US monthly crude has not only rebounded but sky rocketed to new heights. The biggest gains as I mentioned have been in Texas, shown here in green, where the federal government owns very little land. In just one decade the US has completely altered the global energy landscape. As this red bar shows the US has rapidly moved to the top global position in oil production, roughly doubling Russia and Saudi Arabia. The US will not only produce more than any other country in the future but will likely export more as well. And it’s great news for anyone who prefers liberty over autocracy. Our crude exports have jumped dramatically since the US lifted it’s ban on oil exports with shipments of over 2 million barrel per day.
And after decades as a net gas importer the US is now sending more gas abroad than it’s bringing in. That’s a significant thing for you. The significant thing is the LNG export which is shown in green. US LNG is merely beginning. As you can see from this chart the monthly export revenue is forecasted to hit 25 billion within 7 years.
As the US ramps up its LNG exports the increase competition puts all of us in a better position. Having the US as a major player in the LNG market also helps move LNG towards a more liquid market and away from fixed long-term contracts.
If natural gas can be traded in spot market similar to crude it will hence over our energy security and we can stay owned players. Poland is a good case study. As you may be aware Gazprom shut down a critical pipeline for 3 weeks in 2009. At that point Poland decided to diversify their supply. Gas deliveries from the US began in 2015, then came gas from Norway and in a visit to Warsaw in 2017 president Trump said – “America stands ready to help Poland and other nations diversify their energy supplies so you can never be held hostage to a single supplier.” Under a deal announced in 2017 the British utility Centrica will deliver roughly 30 billion cubic feet of LNG for Polish consumption. Centrica buys that LNG from the Sabine pass terminal in the state of Louisiana. And in the last 6 months 3 American companies have all signed long term agreements with Poland.
The bottom line is that as long as the US political system remains true to its founding, the energy it provides to global markets will weaken the hand of dictators around the globe. But of course, nothing is for certain. We all know president Trump has an itchy Twitter finger and the medias fixation over the now completed Russia collusion investigation, it’s easy to miss what is really going on in Washington with the Trump administration. The fact is president Trump is keeping his promise to unleash the US economy, especially the energy industry. And he is doing it by slashing unnecessary and duplicate regulations which has dramatically reduced our regulation and the cost of doing business in our country, especially in the energy industry. As you can see this is a comparison of the Bush administration cost, the Obama administration cost and the Trump administration cost of major regulations. Trump’s current regulation number is in the negative in terms of impact. And when you combine the 2017 task cuts our economy is responding. The previous administration said that the new normal for economic growth in our country could not go below 2% and we just had to use to it.
President Trump absolutely absolutely rejected that notion and his economic policies and his energy policies are proving out that that wasn’t necessary. And this is especially true of respect to energy production. I will just talk of a few of the major things. Nobody said he was going to do it he was going to buckle to all the international pressure, but Trump pulled the United states out of the Paris agreement. He said he was going to do it and he did it. He slashed costs and permitting delays on energy development of our federal lands which resulted in 50% reduction in the time it takes to get a permit in these areas. And he has set a record with over a billion dollars in 2018 in on-shore oil and gas lease sales. He has slashed a host of regulations that the Obama administration put in place exclusively to hamper the oil and gas industry in our country. But despite all of this, the voices of the media and the voices of the opposition to Trump grow increasingly louder and occupy space in a highest levels of our government.
Our research shows that 14 environmental foundations in the US have provided over 4.2 billion dollars to 19,000 environmental pressure groups in the United States whose main goal is “to keep it in the ground”. They don’t want these resources to be extracted and they more recently don’t want them moved around through pipelines and other forms of transportation.
And unfortunately the false promises of socialism have penetrated the Democratic Party in the US. Every one of the democratic candidates currently running to take on president Trump in 2020 have all pledged to reverse the economic games made by this administration, and they vow to wipe out his energy reforms. Thankfully president Trump has a deep commitment to energy and our continued economic flourishing, and with the Mueller investigation behind him president Trump has a much better shot of getting reelected. But he can’t hold them back forever, and there will be a time when he leaves office and the question will become who and what policies will replace that for which he has set for the United States. The bottom line is that the fundamental aspect of energy prosperity isn’t our ample supply of energy. We’ve got a lot but so does China and so does Russia. It’s the sounds of our political system, it’s the system of free enterprise, the enshrinement of private property, the freedom of our labor markets, the privatization of risk. Economic freedom is the greatest engine of prosperity we have yet discovered. Thank you very much.