What I see are people who want affordable energy. They want strong environmental standards - they want a lot of things - but first and foremost they want affordable energy. And if you want affordable energy, you want oil, gas and coal.
Natural gas will displace coal in power generation. Getting natural gas into the transportation fleet is harder. It works best for vehicles that work from centralized fueling facilities like trucking fleets or buses and cabs. That is happening. Before it can make big inroads beyond that, infrastructure is going to need to be developed.
About 75% of the price of gas is really dictated by crude oil. At the heart of the issue is increasing demand over a period of many years around the world. World crude oil consumption now is close to 90 million barrels a day. Most of the growth in demand is coming from China and the developing world.
Most of the well-developed world - Australia, Western Europe - they develop their resources base, they inventory it, they develop it, and they view it as a good source of jobs and revenue. We are a country that for too long has taken affordable energy for granted.
Historically, the United States has had a wonderful energy policy. We're blessed with a diversity of resources. We have oil. We have gas. We have coal. We have nuclear. And renewables. And as a result, one of our biggest competitive advantages has been affordable energy. You need a strong economy and you need affordable energy to fuel that economy.
Actually, I'm a strong supporter of comprehensive tax reform.
First, the oil and gas business pays its fair share of taxes. Despite the current debate on energy taxes, few businesses pay more in taxes than oil and gas companies. The worldwide effective tax rate for our industry in 2010 was 40 percent. That's higher than the U.S. statutory rate of 35 percent and the rate for manufacturers of 26.5 percent.
Chinese growth will either be strong or very strong. They have a voracious demand for energy that will only continue to grow. What they're doing... is looking at all forms of energy. They're going ahead very strongly with coal, nuclear, oil, natural gas.
Price creates incentive, and energy will be developed if there's demand for it at the price you can develop it.
If you look around the world, the countries with the best environmental practices are the wealthiest. There's a reason for that. If you're worried about where your next meal is going to come from or shelter over your head, your focus is on those things.
Despite some struggles of our own, Americas business and economic system remains the envy of much of the world.
