Findlay, Ohio,
09:13 PM

The energy industry's role in building a better future


Marathon Petroleum Corp. Chairman, President and CEO Gary R. Heminger today moderated an energy policy panel discussion in Cleveland, Ohio. In his introductory remarks, Heminger said that reliable, affordable energy is the key to longer, healthier lives, and a better world for everyone. Below are his remarks in their entirety.

No other energy source can meet the world’s needs on the required scale for the foreseeable future. To pretend otherwise dismisses the dignity of our fellow human beings in need. Their need for energy - in fact, their lives - become vague abstractions.
Chairman, President and CEO Gary R. Heminger

Good afternoon ladies and gentlemen. Thank you for being here for this important panel discussion. Of all the issues we face, energy is one of the most critical to our national well-being. It is fundamental to economic prosperity, national defense, agriculture, health, and much more. Energy is also a contentious issue that’s always the subject of policy debates. These debates often center on the trade-offs we as a society are willing to accept to get the energy we need.

We often hear from those who oppose fossil fuels because of the trade-offs they entail. But we don’t often hear about other trade-offs. For wind and solar, we have to consider the mining operations that procure the rare-earth metals that make them work; the amount of land they require; the fact that their power is not always available; and the wildlife deaths caused by wind turbines and some solar technologies. For biofuels, we must consider that despite massive government subsidies and mandates that are now more than a decade old, so-called “advanced” alternatives like cellulosic biofuel are still not available in commercial quantities; higher ethanol blends that EPA and others are pushing pose significant safety and reliability problems for consumers; and even gasoline with 10 percent ethanol, which is prevalent nationwide today, can harm powerboats, chainsaws, lawnmowers, roto-tillers and other small engines. So while Marathon is certainly not anti-ethanol, we are very much opposed to the federal RFS [Renewable Fuel Standard] program that seeks to dictate which fuels consumers use, and how much of them.

Weighing these trade-offs is a delicate business, one that requires a steadfast dedication to facts and data, rather than emotion and speculation. It is a pleasure for me to introduce my fellow panelists, each of whom plays an important role in the ongoing debate about how to best meet the energy needs of our great nation, and a world that relies on this country for leadership.

Stan Chapman is senior vice president and general manager of TransCanada’s U.S. Natural Gas Pipelines. He’s responsible for the safe, efficient operation of the company’s more than 30,000 miles of U.S. natural gas pipelines. Stan started his career in the gas pipeline sector in 1988, and has worked with Columbia Pipeline Group, El Paso Pipeline Group and its predecessor Tenneco. Stan is president and member of the board of directors of the Interstate Natural Gas Association of America and past board member of the Northeast Gas Association.

Jack Gerard is president and CEO of the American Petroleum Institute, the trade association that represents the oil and gas industry. Jack has led the API since 2008, and has been instrumental in expanding its membership and influence across the nation and internationally, with offices in Dubai, Singapore, Beijing, and Rio De Janeiro. He is widely recognized as one of Washington D.C.’s most influential advocates for our industry. Prior to his role with API, Jack led the American Chemistry Council and the National Mining Association, as well as working for Members of Congress and a lobbying firm he co-founded.

Congressman Bill Johnson represents Ohio’s Sixth District in eastern and southeastern Ohio, where he was first elected in 2010. He serves on the House Energy and Commerce and the House Budget committees, and is a member of the House Shale Caucus. Prior to his election, Representative Johnson created and built high-technology businesses, and also served as chief information officer of a global manufacturing company. Prior to his private-sector accomplishments, he served a distinguished, 26-year career in the U.S. Air Force, retiring as a Lieutenant Colonel.

Lastly, Doctor Bill Cassidy, Senator from Louisiana, was planning to be with us this afternoon. Understandably though, given the tragic events that unfolded in Baton Rouge Sunday, Doctor Cassidy wanted to remain in Louisiana this week. Our thoughts and prayers are with the officers killed in that senseless attack, and with their families and loved ones.

My name is Gary Heminger. I am chairman, president and chief executive officer of Marathon Petroleum Corporation, a refining, transportation and marketing company located in Findlay, Ohio. Marathon Petroleum is the nation’s third-largest refiner, and the largest in the Midwest. We also own and operate the largest refinery in Doctor Cassidy’s home state of Louisiana, where the refining industry – and the oil and gas industry in general – plays a vital, irreplaceable role in the economy. I am also chairman and chief executive of MPLX LP, which is a partnership sponsored by Marathon Petroleum. MPLX provides transportation and storage for crude oil and petroleum products, as well as transportation and processing of natural gas and natural gas liquids. I have been in this industry for more than 40 years and I’ve had the good fortune to see every aspect of our business, including oil exploration and production, refining, pipeline operations, retail, and more.

Ladies and gentlemen, given my experience in the petroleum business, I can say without reservation that I am proud of our company and our industry. Reliable, affordable energy is not just the life-blood of our global economy; in many cases, it can mean life itself. And fossil fuels in particular are the most efficient, effective way to meet our world’s energy needs.

Oil and natural gas, and the many fuels and other products we make from these commodities, make people’s lives better every day. Coal also makes an enormous contribution to meeting our power needs. Every person here benefits from fossil fuels and the products they make possible.

Hydrocarbon fuels get us to work and school every day, connect us to family and friends, and give us the freedom to go where we want, when we want. I’m certain fossil fuels got every one of us to this room today. Even if you never drive a car, you still eat food that was planted, harvested and transported with diesel power. Our homes, offices and other buildings fend off cold winters and hot summers with coal- or natural gas-fired electricity, or by directly burning natural gas. You use everyday items that were brought here on petroleum-powered trains, planes, boats and trucks. And in fact, many of the everyday items you use are made of petroleum-based materials.

With all of these benefits, it should come as no surprise that there is a direct relationship between energy consumption and a country’s wealth. Abundant, reliable energy allows people to achieve greater prosperity, higher standards of living, and longer, healthier lives. Thankfully, here in the U.S., we have access to enormous amounts of energy and a modern infrastructure to put it to good use. We produce, process, and use fossil fuels more cleanly and safely than ever before. Our emissions are lower than ever. And, we are the most prosperous nation in history. But it seems some people have forgotten that reliable, affordable energy was instrumental in getting us here, and is still critical today.

There is a dedicated group of folks whose goal is to make our most reliable, plentiful forms of energy much more expensive, so that less reliable forms of energy seem more attractive. The Clean Power Plan is one of these efforts. Some are advocating a carbon tax, which would hike energy prices even further. When energy costs more, every aspect of our lives becomes more expensive – getting from point A to point B, buying items from the supermarket shelves, lighting and heating our homes… the list goes on and on. Because higher energy costs have such widespread effects, those who can least afford it suffer the most.

To the extent that anti-fossil fuel activists are able to succeed in less-developed nations, the effects on the poor can be even more dire. Energy poverty is widespread in our world today. More than a billion people have no electricity. And almost 3 billion people rely on wood and other biomass for indoor cooking, which causes millions of deaths per year from respiratory illness. Energy poverty today means high infant mortality, lower life expectancy, illiteracy and many other social ills. But access to energy is life-changing. Energy can mean something as simple as having lights after sunset to do homework. Or, it can mean something as critical as being able to grow more food, or power incubators at a hospital.

Yet although traditional energy sources are critical to modern life, it has become fashionable in some circles to criticize the coal and petroleum industries as antiquated, and even to question the morality of what we do. I would contend that if we do value every one of our fellow human beings, we must consider how vital affordable energy is to everyone’s well-being.

For those who still must farm with human or animal power, for those who don’t have electric lights, for those who can’t transport themselves to markets, schools or medical facilities quickly or efficiently, treating petroleum fuels or coal as if we can do without them is unrealistic. No other energy source can meet the world’s needs on the required scale for the foreseeable future. To pretend otherwise dismisses the dignity of our fellow human beings in need. Their need for energy… in fact their lives, become vague abstractions.

We must avoid falling prey to this mindset – that some people are expendable. In an ideal world, that would be an uncontroversial statement. But consider this: Even as developing nations face problems that could be alleviated with plentiful, reliable, proven energy technologies, organizations like the United Nations, the International Monetary Fund and the World Bank have made greenhouse gas reductions their priority. This means they favor costly, less-reliable sources of energy like solar and wind for development projects, rather than the types of energy that can spur genuine prosperity.

Here in the U.S., we consider wind and solar energy to be supplemental, because together they supply only about 5 percent of our electricity. And that’s after decades of government subsidies to try to make them more attractive. And yet, our official policy is that when we help developing nations build power infrastructure, we oppose the reliable fuels that got us to our own level of prosperity, and support the unreliable supplements.

Ladies and gentlemen, this is hypocritical. The message is that we are already rich, and we don’t care if others have to stay poor longer. Why? Because we want the satisfaction of seeing them use alternative energy.

Certainly, hypocrisy is unpalatable. But what’s worse – much worse – is what I referred to earlier: treating hundreds of millions of people as expendable... As if they are simply statistics. We know what would help them, but we won’t provide it because of an ideology that places human life far too low on the priority list.

What’s ironic about this ideological outlook is its ability to be blind to one reality, while seeing another so clearly. Consider this quote from the World Bank:

“Inclusive economic growth is the single most effective means of reducing poverty and boosting prosperity. Yet most economic activity is impossible without adequate, reliable and competitively priced modern energy. This is why access to energy is so important in the fight against poverty.”

This is a remarkably clear-eyed view of energy’s importance, and I couldn’t agree more. But the World Bank seems oblivious to energy’s role in alleviating poverty when it talks about climate change. Just this year, the World Bank launched its Climate Change Action Plan, calling it “the defining issue of our time.”

I’d like to pause to emphasize that. The World Bank’s own research shows that in the developing world, thousands of people are dying from indoor air pollution each and every day – yet they call climate change the “defining issue of our time.” In their own words, climate change “could” push millions into poverty. But we know for a fact that millions of real people are dying each year, and we know that proven, reliable energy sources could alleviate that. So it seems that to some, ideology is more important than reality… more important than those vague abstractions we call our fellow human beings.

Whether here in the U.S., or in developing nations around the world, reliable, affordable energy is the key to longer, healthier lives, and a better world for everyone. To those of us who consider human life precious, and no person as expendable, the facts are clear:

First, fossil fuels are the only source capable of providing energy on the scale needed today and in the future.

Second, fossil fuels are the key to billions of people living longer, healthier, and more prosperous lives.

Third, we produce, refine, and use fossil fuels more cleanly now than ever before, and are getting cleaner with every year that goes by.

And so, ladies and gentlemen, the conclusion is just as clear: The world needs more fossil fuels, not less.