February 25, 2013 / 4:45 PM / 5 years ago

RPT-UPDATE 3-US execs united on oil drilling, divided on gas exports

* Officials should ease rules as oil, gas sectors boom, executives say

* Controversial oil sand pipeline a good idea, CEOs say

* Help for clean energy, more efficiency also part of mix

By Patrick Rucker and Valerie Volcovici

WASHINGTON, Feb 25 (Reuters) - Chief executives from some of the largest U.S. companies offered an energy blueprint on Monday that would expand drilling but they dodged thorny questions such as whether the nation’s oil and gas wealth should be exported.

The Business Roundtable, a policy forum for leading CEOs, urged President Barack Obama to expand offshore oil production, coal exports and drilling on public lands in the interest of a fresh energy policy.

New technology has already put vast natural gas reserves within reach - unlocking shale deposits and creating a sudden glut of the fuel - but executives stayed silent on whether that bounty should be exported.

Energy interests hope natural gas sales abroad will help their bottom line while some domestic industries fear exports will rob them of cheap fuel that could expand the nation’s manufacturing base.

The Roundtable, which brings together executives from companies as varied as Coca-Cola Co and JPMorgan Chase & Co, balked when asked for a concrete position on natural gas exports.

“We haven’t been overly specific with what we want to do there,” David Cote, chairman and CEO of Honeywell International Inc told reporters in a call to discuss the plan.

Dow Chemical Co, a proponent for a go-slow policy on natural gas exports and a member of the Roundtable, has warned that shipping the fuel abroad would mean fewer domestic factory jobs.

Sudden natural gas exports “would allow U.S. firms to profit from exports in the short term but at the long-term expense of the rest of the economy,” Dow CEO Andrew Liveris wrote in a Monday editorial in the Wall Street Journal.

The United States stands to gain as many as 5 million new jobs by the end of the decade as foreign companies build domestic factories to tap cheap and abundant natural gas and electricity, the Boston Consulting Group concluded last year.

The energy sector has asked the Obama administration to bless plans to build natural gas export docks but officials have not signaled their intentions.

Whatever happens to exports, though, the Roundtable encouraged development of carbon fuels that are the backbone of the nation’s energy sector and it urged federal officials to open more land to oil, gas and coal interests.

The organization also repeated its call to approve the Keystone XL oil sands pipeline from Canada to Texas.

“Technology, coupled with access to vast resources, could help strengthen America’s position as an energy superpower,” Chevron Corp CEO John Watson said in the call.


Crude output increased more in 2012 than any any other time since the domestic oil industry got started in the mid 19th century, according to the Energy Information Administration.

Much of that boom follows innovations such as hydraulic fracturing, or fracking, which has opened large parts of the country to drilling and ushered in a major shift away from coal to cleaner natural gas in electric power generation.

There are still too many restrictions, the executives said, and officials should expand drilling as one step to end “the decades-long cycle of ad hoc energy policies.”

The CEOs have been meeting with lawmakers recently to push the connection between energy development and jobs. The report also comes at a time when President Barack Obama is reshaping his energy team and has vowed to take action on climate change.

The Roundtable called for “collective actions” to curb heat-trapping greenhouse gases blamed for climate change rather than price carbon emissions, as President Barack Obama had urged in his State of the Union address earlier this month.

It warned that excessive regulation by the Environmental Protection Agency (EPA) and other government bodies would drive production and manufacturing overseas, where environmental protection may be more lax.

Regulations to control fracking and other drilling has typically come from the states rather the Washington, the Roundtable said, and federal authorities should “respect” that rule and avoid over-regulating that could put some fracking zones off-limits.

While the CEOs said they favored offering tax incentives to help commercialize non-fossil energy, such as renewables and carbon capture and storage, they warned that those subsides must be “finite” and “phased out in a predictable fashion.”

Congress should adopt or extend tax incentives for other renewable fuels and technologies but incentives should be limited to those that are on “a credible path to unsubsidized competitiveness” and can eventually be phased out.

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