IPAA Emerging Leaders in Energy

Kristen Lingley, Matt Kellogg, and Julia Bell speak at YPE International Summit

Production is booming, investments are soaring, and companies are recruiting. No one can argue that it’s an exciting and historic time to be a part of the U.S. oil and natural gas workforce.

The oil and natural gas industry is often misunderstood and is beset with problems that accompany an aging workforce.  There is currently an information gap between the established leaders and the newly minted “next generation” of industry leaders. IPAA Emerging Leaders in Energy program seeks to bridge this gap.

Career development for young professionals is key to the industry’s success. With this in mind, IPAA has developed a new program designed to engage young professionals and college students on the pressing political, business, and technological issues facing the oil and natural gas industry.

As an IPAA Emerging Leader in Energy, you will receive outstanding opportunities that include: networking with leaders of America’s premier oil and natural gas companies, monthly IPAA-TIPRO luncheons in Houston, seasonal luncheons and meetings with IPAA leadership and staff around the country, and expanding your social media presence. By participating as an Emerging Leader, you can expand your network, strengthen your career, and delve into the pressing policy issues of our time through social media engagement.

Nikki McDermott & Julia Bell at the IPAA Emerging Leaders booth in Las Vegas

Here’s what IPAA Emerging Leaders in Energy have been up to this spring:

  • IPAA Emerging Leaders in Energy rolled out in Las Vegas. In April, IPAA staffers Julia Bell, Matt Kellogg, Kristen Lingley, and Nikki McDermott introduced the IPAA Emerging Leaders in Energy Program at the Young Professionals in Energy (YPE) International Summit in Las Vegas. IPAA staffers gave a keynote luncheon, entitled “Conquering the Evil Empire Myth: Representing the Oil Industry in Washington, DC.”
  •  IPAA – YPE Happy Hour. IPAA teamed up with YPE again in April when IPAA sponsored a happy hour networking reception at the Rio in Denver. IPAA staffer Cortney Hazen introduced the program to the young energy professionals of Denver and explained the upcoming opportunities in the area.
  • Denver Career Networking Luncheon. Yesterday, IPAA hosted its first luncheon in Denver, Colorado on May 23. Dan Naatz, Vice President of Federal Resources and Political Affairs at IPAA was the featured speaker. Prior to coming to IPAA, Dan was Chief of Staff for the late Senator Craig Thomas of Wyoming. Young professionals listened to Dan speak about his experience working on Capitol Hill and his suggestions on resumes, cover letters, interview preparation and networking.

Check out these events that are quickly approaching:

  • IPAA Midyear Meeting. IPAA’s semi-annual Midyear meeting and Land Access & Environment Conference is at the Broadmoor in Colorado Springs from June 27-29! This event isattended by the top oil and natural gas executives, financial consultants, federal agency contacts, and state and regional cooperating association leadership and members. As an IPAA Emerging Leader in Energy, you will be able to attend the Welcome Reception on June 27 for free and will be introduced to several of our notable members. This is an unparalleled opportunity where you can connect with and learn from the most influential leaders of our industry. To attend the full meeting and conference, you will receive a discounted rate as an Emerging Leader. If you wish you attend the Welcome Reception Only, please email Brittany Green and include your name, company or school, city and state so we can have a badge waiting for you when you arrive. If you wish to attend the entire meeting, please click here to register.
     
  • Houston Luncheons. Join IPAA and Texas Independent Producers & Royalty Owners Association (TIPRO) at our monthly luncheons with guest speakers at the Petroleum Club of Houston. These will be complimentary for IPAA Emerging Leaders. The June luncheon on the 13th of the month will feature Jerry Schuyler, President & COO of Laredo Petroleum Corporation. There are limited spots so email Nikki McDermott with your name, company / school, and city to secure your spot.

Email Luanne Tyler (ltyler@ipaa.org) with your name, company / school, and email address to get involved today!

Energy Heats Up the 2012 G8 Summit

At the 2012 Group of Eight (G8) Summit held this week in Camp David, energy held a prominent place on the world leaders’ agenda.

IPAA educated on the role of shale as a “global game changer” in G8: Camp David 2012, the official publication of the G8 Research Group that was distributed to heads of state, CEOs, financial institutions, and government representatives at the summit. IPAA highlighted how natural gas is a low-cost, abundant fuel that is pivotal for countries’ energy portfolios in the decades ahead. IPAA also demonstrated how the industry’s safe, game-changing completion process of hydraulic fracturing is playing an unparalleled role in creating jobs, enhancing energy security, and boosting economies of nations around the world.

“Despite speculation and propaganda, hydraulic fracturing is a proven-safe technology. In fact, out of the 1.2 million wells that have been fractured in the U.S., not a single case of groundwater contamination has ever been proven as a result of hydraulic fracturing. A study from the Energy Institute at the University of Texas at Austin reaffirmed this fact in February 2012. The study found “no evidence” of hydraulic fracturing ever leading to groundwater contamination.

“Like any other industrial process, industry is aware of the need for continual advancement to ensure the safety of the environment in communities where development is taking place.  From preliminary testing of the area via seismic data to restoration of the completed well site, industry places safety and the environment as a top priority in development.  Industry has stepped up to voluntary disclose chemicals used in over 11,410 wells across the United States. Safety, efficiency, water conservation, wellbore integrity, and environmental protection are key chapters in development.”

The feature also highlighted shale plays around the world – from European Union to China to South America. The proven benefits of development to the United States’ economy and job creation were also demonstrated.

IPAA concluded by discussing how natural gas from shale is an area which leaders from the different countries can and should work together to promote.

“The development of natural gas from shale presents an opportunity for global leaders to work together and provide our growing world with the energy it needs to expand, advance, and progress. From the Lower Saxony in Germany, to the Eagle Ford in Texas, across to the Cooper Basin in Australia, shale plays around the globe are redefining our world’s energy potential and providing countless economic benefits for local, federal, and global economies.”

This was a great opportunity for IPAA to advocate the amazing benefits of developing oil and natural gas from shale to an international audience. Please click here to see the full feature, which was circulated to more than 12,000 international policymakers. At the summit, the leaders released a 40-point declaration, in which the G8 leaders voiced their commitment to sharing best practices for energy production, particularly related to the technologies of hydraulic fracturing and deep water drilling.

Another energy issue brought up did not have a consensus as common-sense – tapping the strategic petroleum reserve. Last year, amid rising gasoline prices, President Obama used the Libyan crisis to justify tapping the Strategic Petroleum Reserve. IPAA responded that the administration’s action was “not a solution, yet another decision that will only prolong the nation’s vulnerability to swings in oil prices. Drilling for more oil at home will not only increase American oil supply, but will also create jobs and increase government revenues through taxes and royalties. Releasing oil from our strategic reserves cannot accomplish these other important goals.”

Now, with President Obama’s likely support, that option is on the table once again – this time in an election year for the president. In response to the volatility of world oil markets, G8 leaders agreed to “stand ready to call upon the International Energy Agency” to release oil from the Strategic Petroleum Reserve. Again, IPAA has long argued that tapping the Strategic Petroleum Reserve is a political play rather than a practical response to world supply disruptions. Instead of this knee-jerk reaction, the U.S. should spearhead a national energy policy that encourages production of American oil reserves by increasing access to federal lands and eliminating regulations that serve only as unnecessary red-tape.

For more information on energy at the G8 summit, read the White House’s fact sheet on G-8 Action on Energy and Climate Change.

North Dakota and Texas: Oil’s MVPs

       

This week’s Declaration of Independents analyzed America’s rebirth of crude oil production – they kicked it off with this amazing fact:

“U.S. crude oil production, after sinking to levels not seen since the mid-1940s, rose more than half a million barrels per day just between 2007 and 2011. That size of increase has not been witnessed in the U.S. for more than forty years.”

Why is this “revival” occurring and why now? The fact is there has been an absolute revolution in oil and natural gas development technology. With new developments that combined horizontal drilling (used for about 30 years by the industry) and hydraulic fracturing (used for more than 60 years) America’s independent producers were able to break through thick shale rock that was previously impermeable to access oil (and natural gas) trapped in shale.

America’s two “All-Star States” of North Dakota and Texas, with their now famous (at least in the energy world) plays of Bakken and Three Forks in North Dakota and Permian Basin and Eagle Ford in Texas are pulling the weight in this increased production. These rich shale plays are the sweet spots from which America’s oil and natural gas companies are creating this reversal in U.S. liquids production.  

North Dakota, for its part, has increased its production by an outstanding 240 percent in the past four years alone! The state is experiencing an economic and jobs revival never experienced in the state’s history. Texas, which was experiencing a steady decline in production beginning the 1970s, has completely turned around, as evidenced by graph.

Also, IPAA’s economists noted:

“Even since we published our first article less than a year ago on the reversal in U.S. liquids production through 2010, we’ve had to add another 300,000 barrels per day to American liquid production figures just to bring things up to date with the 2011 annual data. So far in early 2012, the trend, if anything, has accelerated — U.S. liquids production in January and February has already been beating the 2011 average by an additional 660,000 barrels per day.”

Clearly this story is only getting better because America’s oil and natural gas resources “are not a static figure, but can evolve dramatically when technological advances and human ingenuity come into play.”

This is fantastic for the American economy. Increased barrels of oil mean increased jobs for Americans. According to the Bureau of Labor Statistics, the number of Americans now employed in oil and gas development and support activities has grown by more than 100,000 in five years – from 344,000 jobs in mid-2007 to 454,100 in March 2012.

Not only is this fantastic for America’s economy, it’s encouraging for America’s energy security. In fact, U.S. import dependence dropped from 50.4 percent in January 2010 to under 40 percent in February 2012. That’s a 10 percent drop in just two years.

The breakdown of numbers in this reversal is truly extraordinary. I encourage you to read the full analysis.

Inside-the-Beltway Standard for American Energy

Last week, the Department of Interior released Bureau of Land Management’s proposed rules for hydraulic fracturing operations and well construction on federal lands. The fact is that states have been successfully regulating oil and natural gas operations for decades and are the best equipped to do so. A national standard for hydraulic fracturing and well construction makes me raise a few questions:

  1. Which state operations are these national standards closest to?
  2. How can one standard take into account the vast geologic differences between states?
  3. If oil and natural gas producers are operating according to a certain state’s standard that is more stringent, does this incentivize them to lower their standard?
  4. If it is more stringent, does this standard allow for flexibility that is often needed at the wellbore?
  5. Does a national standard override the progress being done at the state level?
  6. Does the federal government have the necessary funding and expertise to regulate?
  7. Will these new rules make it harder for America’s independent producers to gain access to America’s federal lands?

The answer to these questions will be determined in the rules and the application of these rules. But these problems could all be avoided if the administration let the states do what they have been doing – regulate oil and natural gas development safely and responsibly. When the federal government inserts itself into the process, there will inevitably be primacy issues. IPAA President Barry Russell also pointed out that America’s independent producers are already having a tough time gaining access and developing U.S. federal lands because of the burdensome bureaucracy of federal regulations.

The draft rules are an improvement from leaked drafts we have seen in the past, which did not utilize FracFocus.org and proposed that operators would have to disclose their hydraulic fracturing additives before the fracturing process. This would be extremely difficult for operators, since the additives are finely tuned and often have to be changed right before fracturing for best results. 

However, the concern still stands that these new draft regulations, “which mandate one-size-fits-all regulations on hydraulic fracturing operations on public lands, will indubitably insert an unnecessary layer of rigidity into the permitting and development process.”

IPAA President Barry Russell continued,

“America’s public lands are extraordinarily diverse. Independent producers and state regulators understand the geographic and geologic differences of their states and have had a long and successful history in safely dealing with them. The federal government’s role should be to further empower the states to continue their safe regulation of hydraulic fracturing.”

IPAA’s position was referenced in the New York Times, Reuters, Pittsburgh Post-Gazette, CNBC, Bloomberg, San Francisco Chronicle, E&E News, The Hill, Platts’ Gas Daily, The State Journal, Gas Business Briefing, and more media outlets.

The final, most important question I pose to Interior is this and should be the question on which the administration’s energy policy rests: Will this new standard help or hurt production of America’s oil and natural gas resources?



Independents Conquer New York

Okay, it’s impossible to conquer New York. But IPAA came pretty close in mid-April when we held our 18th Annual OGIS New York. OGIS stands for Oil and Gas Investment Symposium and IPAA holds these events in Florida, San Francisco, and London – but New York takes the cake. This year, more than 1800 analysts attended the three-day conference!

It’s unparalleled opportunity for our publicly-traded member-companies to present the portfolio and E&P activities of their companies to New York’s financial sector.  Some of the all-star CEOs included Aubrey McClendon from Chesapeake, John Richels from Devon Energy, Janet Clark from Marathon Oil, and Lynn Peterson from Kodiak Oil & Gas Corporation.

On the second day of the conference, NASDAQ welcomed IPAA to New York by inviting us to ring the opening bell. IPAA President Barry Russell along with IPAA leadership and staff (myself included) joined him in this outstanding event. Our logo and faces were plastered up on Times Square for everyone to see.

Then, former Chairman and IPAA’s own media darling Bruce Vincent was interviewed by in the studio on CNBC’s “Street Signs, where he discussed the oil and natural gas industry’s response to President Obama’s oil speculation regulation plan.

Bruce pushed back against the effort to demonize speculators and investors, who actually bring necessary liquidity into the market. He took a complicated topic and broke it down for CNBC viewers: “One of the concerns that producers have is producers use these markets all the time to hedge our product…we want to be able to hedge and take some of the price risk out. We want to be sure we are still able to do that.”

Please see the IPAA YouTube page for the full video.

There was great press to round up the event, such as AOL Energy, Market Watch, and Wall Street Journal and more. IPAA member Clayton Williams also participated in an exclusive interview live from the event with CNBC’s “Squawk Box.”

It was a great week in the Big Apple. We are always pleased to host this event which brings such value to our member companies, the finance world, and the U.S. economy as a whole.