The Broadmoor | Colorado Springs, CO

The Independent Petroleum Association America’s (IPAA) will be hosting its’ 2nd Annual Access & Resource Development Conference on June 27th at The Broadmoor. The conference will address issues involving federal land access, energy development and the challenges facing both producers and consumers of oil and natural gas in the United States. There will be three panels including individuals from federal agencies, conservation groups, and other trades. The luncheon speaker will be a governor from the West.

The next day will kick-off IPAA’s Midyear Meeting. Registration will open soon. Visit IPAA’s meetings website for the most up-to-date information.

To hear the 19 engaging presentations you missed, visit the meeting archives and listen to the webcasts provided. Be sure to make note of your favorites, most of these companies can also be heard at IPAA’s upcoming showstopper, OGIS New York, April 16-18, 2012. U.S. Energy, Far East Energy, Samson Oil and Gas Limited and GMX Resources, Inc., to name a few, are all coming back for our spring symposium.  

For more information on OGIS New York, including how to register and make a hotel reservation, click here.

Thank you to all who participated in OGIS Florida. I hope you enjoyed the Four Season’s jumbo shrimp cocktail (and the conference) as much as I did!

In President Obama’s State of the Union address, he touted his administration’s role in supposed expanded offshore oil access:

“Over the last three years, we’ve opened millions of new acres for oil and gas exploration, and tonight, I’m directing my administration to open more than 75 percent of our potential offshore oil and gas resources.  Right now — right now — American oil production is the highest that it’s been in eight years.  That’s right — eight years.”

However, the 75 percent of potential offshore oil and gas resources is actually lower than both Bush and Clinton administrations before him. These comments made it seem like he is opening additional areas for development, but he is not opening additional areas at all. This is the same plan he released in early December that was criticized by many energy advocates.

Take Virginia for example. Governor Bob McDonnell of Virginia has implored the administration time and time again to bring energy and jobs to Virginia. Now, he – like many others who see the direct link between offshore oil and natural gas development and job creation – supports the new GOP House American Energy and Infrastructure Jobs Bill.

In light of these developments – or lack thereof –IPAA President and CEO President Barry Russell sent a letter to the Obama administration, urging Bureau of Ocean Energy Management (BOEM) to reconsider the 5-year Outer Continental Shelf (OCS) Oil and Natural Gas Leasing 5 year plan for 2012-2017, which gives limited access to America’s vast offshore resources. To see the full letter, please click here.

IPAA commented:

“The current Proposed Program is directly contrary to the impression the President left with the American people. The Proposed Program under consideration by BOEM would open no new areas of the OCS for assessment and leave exploration and development activities focused on previously leased offshore areas, most of which have been available for 50 years.

Also, 182 House members signed a bipartisan bill referencing the expectations after the moratoria in the Gulf were lifted:

“At the time these moratoria were removed, it was anticipated by the public and the Congress that without these obstacles in place the result would be that future five year plans would include significant new access to the OCS thereby laying the groundwork for new jobs, energy, and revenues… Consequently, we were disappointed that the proposed plan announced by your Department on November 8^th would open no new areas of the OCS for assessment and leave exploration and development activities focused in the same places where we have been looking for a generation.”

The oil and natural gas industry is keenly aware that it must operate in offshore waters with the utmost safety. Many companies have gone above and beyond even the most stringent regulations in offshore waters in order to ensure the greatest level of worker and environmental safety. The way to progress to more safety and security is not through limiting access to the Gulf. Opening offshore areas for responsible oil and natural gas development is a must if President Obama wants to reawaken the economy – particularly in the Gulf Coast states still reeling from the moratorium. Let’s rework this 5-year plan to reflect President Obama’s encouraging remarks in the State of the Union about oil and natural gas.

IPAA’s 18^th Annual Texas Wildcatters’ Open is scheduled for March 22 at Blackhorse Golf Club in Cypress, Texas. Last year’s tournament welcomed more than 300 players and 50 sponsors, with more than 40 door prizes distributed at the dinner/awards ceremony. Sponsorship is the only way to guarantee your spot in the tournament. Space is limited, so view the sponsorship opportunities and make your selection today!

Tuesday, January 24
The Westin Houston, Memorial City
                                                                                                           

Arthur L. Smith (Art) will be the keynote speaker of IPAA’s Private Capital Conference on January 24 at the Westin Houston, Memorial City. Art founded Triple Double Advisors, LLC in August 2007 after he completed the sale of John S. Herold, Inc. to IHS, the global information specialist. He serves as portfolio manager and oversees the firm’s energy research. From 1984 to 2007, Art was Chairman and CEO of John S. Herold, Inc. where he helped guide the growth of Herold into a widely-recognized independent authority in oil and gas research and consulting. From 1976 to 1984, he was an energy equity analyst with Argus Research Corp., The First Boston Corporation and Oppenheimer & Co., Inc. Art currently serves on the Board of Directors of PAA Natural Gas Storage, L.P. and Pioneer Southwest Energy Partners, L.P. Previously, he has served on the boards of Plains All American L.L.P., Pioneer Natural Resources, Cabot Oil & Gas Corporation, Evergreen Resources, Inc., Parker & Parsley Petroleum, the New York Society of Security Analysts, and was a past appointee to the National Petroleum Council. Mr. Smith received a BA from Duke University and a MBA from New York University’s Stern School of Business. Smith is the author of the work – Something from Nothing – which chronicles the career of Joe B. Foster and the success of Newfield Exploration Company.

You don’t want to miss hearing this legend of the industry speak. Onsite registration is still available.

Yesterday, the Obama administration announced its rejection of TransCanada’s proposed Keystone XL pipeline that would have traveled from the Canadian oil sands to the U.S. refineries in the Gulf of Mexico.

In the State Department press release, the administration blames Congress for forcing him to make a decision, claiming the administration simply does “not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest.”

Therefore, the administration deemed the construction of Keystone XL “not to serve the national interest.” Really? The construction of this pipeline was set to create 20,000 jobs for Americans. It would have secured a source of much-needed oil that may not be domestic, but at least sourced from Canada, our neighbor and great ally. The completion of this pipeline also would have helped America’s independent producers, who face a backlog in the transport of their oil from Cushing, Oklahoma.

Additionally, the press release even indicates that the president has had four years to review the Keystone permit: “since 2008…been conducting a transparent, thorough, and rigorous review.” That’s when President Obama was elected! Four years is still not enough time?

This flat-out rejection of American jobs, energy security, and economic development is sure confirmation of the administration’s animosity toward the oil and natural gas industry and demonstrates the chokehold that the President’s environmental base has over the administration. The labor unions, a huge base of the Democratic Party, are up in arms over this rejection of jobs. Canadian Prime Minister Harper expressed his “profound disappointment” of President Obama’s decision.

Once again, the administration puts pressure from its environmental base over the needs of the American people. In a struggling economy, the fact that the President puts concerns of radical, anti-development activists over blue collar Americans who would have benefited from the well-paying Keystone XL pipeline jobs is truly shameful.

These words are splashed across the headlines, sounding doom, gloom, and fear– but it’s important to truly analyze the geopolitics at work here. Iran is threatening to block the Strait of Hormuz. But what does this actually mean for the United States, which doesn’t receive oil directly from Iran?

IPAA’s chief economist, Fred Lawrence, broke it down in a Declaration of Independents analysis. Essentially, the Strait of Hormuz is one of the most important trade passageways in the world. The US Dept. of Energy defines the Strait as “the world’s most important oil chokepoint, with an average of 14 supertankers passing through it every day, most of them heading towards Japan, South Korea, India and China.”

Asia and Europe would feel this supply shock most of all because these are “two regions with growing import dependence on the Middle East.” Luckily for the United States, “Our total import dependence is declining. U.S. net imports have dropped from over 60 percent of our total consumption in 2005 to around 45 percent in 2011 through November…52 percent of our oil imports emanate from the Western Hemisphere.” This is due in large part to the increased shale oil reserves, made accessible by the combined technologies of hydraulic fracturing and horizontal drilling.

Although the U.S. is clearly more insulated from Middle East supply shocks, we are far from isolated. The growing interdependence of global markets makes any economic hit to European or Asian markets a close second hit to the U.S. markets. As the analysis outlines,

“Given the current debilitated state of world markets, every bit of negative economic news from Europe or China exacts a toll on our recovering economic markets because they are two of our top trading partners. Any oil shock of this magnitude would pass quickly through the global business cycle as energy costs directly impact trade flows, industrial activity and consumer spending which comprises over two-thirds of the U.S. economy.”

Thus, the negative effects of a Strait of Hormuz shut-down would certainly hit the United States – although not as hard as it would hit Asia and Europe. In our globalized world, any drama featuring the remarkably strategic and crucial commodity of oil will have ripple affects felt the world over.

Click here to read the analysis and to view original charts and graphs.

Yesterday, the Durham Herald Sun reported that a group of respected scholars came together yesterday on an unbiased, academic panel to discuss the economic, environmental and social impacts of hydraulic fracturing.  RIGHT.

The group that actually came to Duke University on Monday was a gang of biased, anti-development professors whose studies on natural gas and hydraulic fracturing have been discredited over and over again.

Robert Jackson, professor and director of the Center on Global Change at Duke’s Nicholas School of the Environment (the title of which truly says it all) was the author of a study called “Methane contamination of drinking water accompanying gas-well drilling and hydraulic fracturing.” Energy in Depth combed through the study – highlighting the problems with the data, revealing the author’s bias and bringing to light the authors’ own admission that hydraulic fracturing has no impact on water wells.

Not least among the panelists was Robert Howarth, professor of ecology and environmental biology at Cornell University, and author of the notorious paper which claims that natural gas has more emissions than coal. This study has been “debunked by the U.S. Department of Energy, the Council on Foreign Relations, Carnegie Mellon University, and even his own colleagues on campus.”  Check out Energy in Depth’s smack-down of the paper to see how completely biased and manipulated this study was.

Susan Chistopherson, another Cornell professor, said on the panel that the economic benefits are overrated and that “longterm outcomes for the places where drilling takes place are not ‘particularly favorable.’”

Couple that biased, dour outlook with today’s Bloomberg news article about the economic ripple effect of oil and natural gas drilling which started off saying:

“Thirty-four years after Black Monday, the day Youngstown Sheet & Tube announced shutdowns marking the end of the Ohio city’s steel era, a $650 million mill is coming to life thanks to the natural-gas drilling boom.”

It continued on to cite these statistics from Marcellus shale development:

“Employment by businesses directly involved in Marcellus shale grew 114 percent in the first quarter of 2011 from the same period in 2008, according to the Pennsylvania Center for Workforce Information and Analysis. Wages in Marcellus industries average $76,036, compared with the state average of $46,222.”

It’s truly a shame Duke and Cornell are not serving their purpose as academic institutions to seek the truth but getting together to espouse to each other their politically-motivated, debunked accusations in the form of an “academic panel.”

There are real concerns from the public about the environmental impact of natural gas development which need to be addressed by academics, industry, and the government. However, these blatantly biased panels instill illegitimate fear in the public and detract from these real concerns.  The industry is ready and willing to participate a real, honest conversation surrounding hydraulic fracturing and natural gas development.

Registration is now open. Visit the meetings webpage for a complete list of speakers.

Book Your Beachfront Room Today! Call: 561-582-2800

p.s. Still need to register for OGIS Florida? Check out my post on registration and begin preparing for this stellar opportunity!

 So here is the basic “to do list” before getting on a plane to Palm Beach, Florida:

1. REGISTER FOR OGIS. Download the faxable registration form or register online. Brittany Green, IPAA’s Meeting Registrar, is ready and available for all registration questions at 202-857-4733.

2. BOOK YOUR HOTEL. IPAA has a block of discounted hotel rooms at the Four Seasons Resort Palm Beach, the location of all OGIS Florida meetings and events. To receive IPAA’s discounted rate of $299 for a single or double, please call the hotel directly at (561) 582-2800 and ask for room reservations. Be sure to mention IPAA OGIS in order to get the discount. After Tuesday, January 10, 2012, the IPAA room discount will end, so get moving!!

3. CHECK OUT OUR PRESENTING COMPANIES. This year’s list of presenting companies is an all-star lineup that is continuing to grow as the conference gets closer. Attendee registration grants you not only access to presentations by C-level management, but great networking events, small breakout sessions for q&a and one-on-one meetings for analysts.

Abraxas Petroleum Corporation
Callon Petroleum Company
Carrizo Oil & Gas, Inc.
Cross Border Resources
Evolution Petroleum Corp.
Far East Energy Corporation
FX Energy Inc.
Gastar Exploration, Ltd.
GeoResources, Inc.
InterOil Corporation
Panhandle Oil and Gas Inc.
Penn Virginia Corporation
PetroQuest Energy, Inc.
QR Energy
Samson Oil & Gas Limited
U.S. Energy Corp.
W&T Offshore, Inc. 

4. PACK YOUR SUNSCREEN. Palm Beach in February is a sunny 75 degrees!

Stay tuned next week for information on requesting One-on-One meetings at OGIS Florida!

For the most up-to-date information on OGIS Florida, visit www.ipaa.org/meetings.

The major media outlets are all reporting on the economic good news of 2011, the real stimulus sweeping the nation:  Despite the recession, the oil and natural gas industry is providing jobs, tax revenue, and economic growth in communities across the United States.

“Sure enough, money is flowing by the barrelful into Mountrail County, transforming a tiny community once proudly situated in the middle of nowhere into an unexpected oasis of prosperity at the heart of the nation’s biggest oil play…With the unemployment rate at only 1.3 percent, local sons and daughters are no longer leaving to find work. (New York Times)

“As the rest of the nation watched incomes drop or stagnate, in Mountrail County median income rose more than 50 percent in the last decade, the fifth-highest gain in the nation. Residents earned on average an additional $20,000, adjusted for inflation, according to an analysis of census data by Andrew A. Beveridge, a demographer at Queens College in New York.” (New York Times)

“A Pittsburgh-area school district gets $628,000 for lease with oil and gas drilling company…Phillips Exploration’s lease with the South Butler School District also carries an 18 percent royalty from any gas that is produced and sold from the acreage.” (Associated Press)

“Chemung and other counties in the state’s Southern Tier where shale gas is assumed to be plentiful can expect a surge in retail sales and tax revenue from those workers once drilling begins…Last year, Chemung led all New York counties in the growth of sales tax and hotel tax revenue, as well as in the expansion of its tax base, avoiding the property tax increases and economic doldrums faced by local governments elsewhere in the state.” (New York Times)

“In northeastern Ohio, oil companies from across the U.S. are setting up shop, developing wells and putting people to work, trying to get the oil out of the sedimentary rock.” (Fox News)

“People who have opportunities in many other places in the country or elsewhere in the world have elected to come to Ohio and seek opportunity here, that tells me that people who are making very rational decisions spending shareholder money are coming to the conclusion that this is worth chasing.” (Fox News)

“The boom in low-cost natural gas obtained from shale is driving investment in plants that use gas for fuel or as a raw material, setting off a race by states to attract such factories and the jobs they create. Shale-gas production is spurring construction of plants that make chemicals, plastics, fertilizer, steel and other products. A report issued earlier this month by PricewaterhouseCoopers LLC estimated that such investments could create a million U.S. manufacturing jobs over the next 15 years.” (Wall Street Journal)

This morning, Lee Fuller, IPAA’s vice president of government relations appeared on a panel on hydraulic fracturing on the Diane Rehm Show (NPR & WAMU’s 88.5). The purpose of the panel was to address the “New Concerns Over Hydraulic Fracturing.” The panelists included two of the natural gas industry’s most vocal opponents – Ian Urbina,  New York Times’ reporter of the infamous “Drilling Down” series, and Dusty Horwitt of the Environmental Working Group, an active anti-development organization. Peter Robertson of America’s Natural Gas Alliance (ANGA) represented the natural gas industry as well.

Throughout the interview, as accusations on environmental dangers of natural gas development were addressed, Lee urged the panel and the public to put accusations in a broader context.

On Hydraulic Fracturing

“It’s important to put this in some context. The context is we’ve probably done a 1.2 million or so hydraulic fracturing jobs in the United States since it was initiated and the success record for that effort has been extraordinary—to the point where we’re now looking for one or two instances to try to suggest that there is some sort of systemic problems with fracturing.”

“In fact, all of the analyses that have been done suggest that fracturing is safely managed now and continues to be safely managed.”

On Pavillion

“It hasn’t been peer reviewed. It’s very important that we not jump at conclusions with respect to Pavillion until there is a better chance for questioning to be made.”

“Even EPA Administrator Jackson has been very cautious taking a position on the quality of this report. Secretary Salazar of DOI has been very critical. The state of Wyoming is concerned about the quality of the data.”

“In fact, one of the monitoring wells that EPA drilled may well have been drilled into a natural gas formation. The reason why they’re seeing various chemicals and compounds there may have been from their own well operations.”

On Landowners

“We have about a million oil and gas wells that are in operation today in the United States and around 8.5 million leaseholders. The process for actually going through the leasing activity is one that has been working in general quite well.”

“As the industry has moved into areas like the Marcellus in Pennsylvania and New York…the familiarity with the industry is not as extensive. There probably needs to be a better mechanism to share information with the potential leaseholders as that contract is being negotiated.”

To listen to the full segment, please click here.

American oil, gas production righting our economy’s ship


By Virginia “Gigi” Lazenby, founder and CEO of Bretagne, LLC

Only a few years ago, our nation was looking toward a future of dependence. Dependence on foreign energy supplies, imported technologies, and the hope that one day an economic miracle would land at our feet and revitalize our nation. Today, however, it seems as though our waiting could be over – and for good. America’s on- and offshore oil and gas reserves have presented a new opportunity for the United States’ energy supply, and alongside it, tens of thousands of jobs and millions of dollars in revenues and economic activity.

America’s independent producers alone are responsible for developing 95% of our nation’s oil and gas wells, producing 54% of domestic oil and 85% of domestic natural gas. Despite the poorly painted picture of “Big Oil,” the real truth is that the average independent producer employees less than 12 employees. Yet, collectively, it’s the small independent producers that have made – and continue to make – great strides to provide and responsibly develop the job-creating, American resources we all rely on every day to keep our economy moving and competitive.

The innovative combination of horizontal drilling and hydraulic fracturing, led by America’s independent producers, has unlocked vast quantities of oil and natural gas from shale deposits. At the same time, offshore development – both in shallow- and deep-water – enables communities and countless individuals to find opportunities to get back to work across the nation and to be proud again. Hotels are bustling, restaurants once on the brink of shutting their doors are packed, family farms are remaining intact, and governments are collecting much-needed revenues for schools, roads, and other important programs.

And the whole world is taking notice. As foreign oil imports into the U.S. are down from 60% in 2005 to 47% today, even OPEC leaders like Saudi Arabia have admitted increased access to North American reserves are beginning to change the global energy supply chain. Russia and other major natural gas-producing nations are seeing the power they were once able to leverage erode by the day as more natural gas is responsibly produced here at home and in other countries worldwide.

Yet with impressive growth has come obstacles. As the New Year quickly approaches, our industry stands at a crossroads. As readily and safely as American innovation has unlocked the potential of our on- and offshore energy reserves, heavy-handed regulation and unnecessary roadblocks have been misguidedly erected by some leaders in Washington. Threatening U.S. supply and restricting access to our nation’s abundant and reliable energy resources, duplicative and unnecessary bureaucratic red-tape continues to impede this development – and consequently stands in the way of job creation, economic growth, and energy security without adding any additional environmental safeguards.

This month, President Obama released a new 5-year plan for offshore leases. And while the plan represents a good first step, it certainly does not represent a bold statement that America is finally – once and for all – serious about our nation’s energy security. At the same time, the Obama administration continues to slow-walk permits in the Gulf of Mexico while also creating barriers for onshore development on taxpayer-owned lands onshore.

With every new and excessive limitation, another livelihood of one of the four million American workers who depend on the oil and natural gas industry for a well-paying job is put at risk and a new job disappears. Our producers are ready and able to develop our natural resources in a safe and responsible manner while providing for the needs of the American people. It is clear that we have the ability to help take our nation down the path of prosperity and energy security.

The coming year will certainly be full of electoral excitement, as it especially is every presidential cycle. Jobs continue to be front-and-center on the minds of the American electorate, and rightfully so. Our industry can continue to be a solution to our jobs crisis – if Washington will be a partner and not an adversary. We see a bright horizon of revived rust belt towns and a strong, broad-based energy outlook that sees our abundant oil and natural gas resources as a competitive advantage in the global economy – not a liability. We stand ready to do our part in ushering in a renewed, stronger and more secure America. This is the clarion call of our time.

In the in-studio interview, Bruce explained, “The American people need to recognize that we have incredible resources in this country. We could become the leading producer of oil in the world, surpassing Russia, surpassing Saudi Arabia all because of these wonderful resources plays in America.” In response to environmental concerns, Bruce also asked people to look at the facts of hydraulic fracturing which is a safe “completion method that industry has used for sixty plus years.” He also described the amazing economic and energy security that increased oil and natural gas production would bring the United States.

To watch the video, please visit the IPAA Youtube channel.

Today, Ohio Treasurer Josh Mandel’s must-read op-ed ran in the Wall Street Journal. The article highlighted the amazing opportunities the Utica shale play grants for Ohio and the major roadblocks from Washington that seek to threaten them. Josh Mandel is also running for the U.S. Senate in Ohio.

Clearly Mandel understands that the oil and natural gas industry is a major jobs creator and that other industries ranging from manufacturing to construction to service industries also reap the benefits. Unfortunately, the Obama administration has halted the sale of drilling rights in Ohio’s national forest. And by one estimate, the article says, the administration has killed or threatened more than 200,000 jobs.

Here are some highlights:

JOBS

“The Ohio leases would have included parcels in three counties badly hurting for jobs…A September study for the Ohio Oil & Gas Energy Education Program found that production in the Utica shale formation has the potential to create more than 200,000 Ohio jobs by the year 2015.”

MANUFACTURING

“Along with Republic Steel, U.S. Steel has also announced new jobs and expansion in Ohio, in its case to meet demand for steel piping created by shale exploration. Vallourec & Mannesmann plans to build a plant in Youngstown, breathing new life into the heart of the rust belt. The Canton-based steel manufacturer Timken recently said that its planned expansion is motivated in part by strong sales to oil and gas companies, which make up 20% of the company’s sales.”

CHEAPER ENERGY

“Exploration in the Utica shale could also mean cheaper utility bills for consumers. A Pennsylvania State University study published in July found that natural gas prices there dropped by 12.6% in 2010, saving consumers $633 million. The U.S. Energy Information Administration says that summer 2011 natural gas prices in the Northeast were 2%-15% lower because of increased shale production.”

Please click here to read the full article.

Bruce said it better than I can, so without further ado, here is the video below.

Leave it to the EPA to create a catch in the amazing oil boom in the Bakken play in North Dakota that’s helping to give the United States the inherent power that comes with energy production.

The EPA is trying to regulate hydraulic fracturing under the Safe Drinking Water Act (SDWA). The agency is currently developing guidance for hydraulic fracturing permitting under the SDWA’s Underground Injection Control program. There are a number of fundamental errors with this approach.

1. Hydraulic fracturing has been successfully regulated under the careful watch of state regulators for decades. STRONGER, the State Review of Oil and Natural Gas Environmental Regulations, demonstrates the working relationship between state regulators and industry. FracFocus is another state-based initiative. It is online chemical registry website where production companies list their hydraulic fracturing fluids.
2. This is outside of the scope of the SDWA. Passed in 1974, the SDWA never intended to apply to well completion fluids. According to the EPA, the UIC “regulates the subsurface emplacement of fluid” but hydraulic fracturing fluid is part of the well completion fluid. In other words, it comes out and does not stay in. In the 1990s, environmental groups brought their case to court to change the scope of the legislation to regulate the industry. The 2005 amendment, coined by environmentalists as the “Halliburton loophole” is not a loophole at all, but simply a clarification of the legislation, which brought the scope back to the legislation’s purpose.
3. Although the EPA must acknowledge that hydraulic fracturing is excluded from the SDWA, which was clarified in the Energy Policy Act of 2005, the EPA seeks to do this by the SDWA’s authority to regulate diesel fuel. However, this interpretation is ridiculously broad.  This sweeping interpretation would include any kind of oil – including canola oil – if it has the same characteristics as diesel, according to Lynn Helms, the director of North Dakota’s Department of Mineral Resources. The actual amount of diesel fuel in the hydraulic fracturing fluid is miniscule – around .088 percent of the fracturing fluid. That amounts to 4,400 gallons in 5 million gallons of fracking fluid. However, this small amount is a necessary component. In the harsh winters, it keeps the liquid from freezing.

The North Dakota energy boom- which also is proving to be an enormous economic boom providing thousands of well-paying jobs in North Dakota -  is in grave danger.

Essentially, the EPA would pull rank – taking away the primacy of the states to regulate hydraulic fracturing if the state regulatory programs did not comply with new federal rules. This would create massive uncertainty. The industry would essentially be frozen, unable to continue with new production as the state scrambled to iron out this process.  Lynn Helms said, “I believe it will be stopped cold for 12 to 24 months. The best case is 15 months and that’s only if we red-lighted everything else and got nothing else done.” The precedent is Alabama – the industry never fully recovered when the EPA pulled rank on that state.

Lee Fuller, IPAA’s Vice President of Government Relations agreed. He voiced his concerns that these efforts are “part of a larger effort by the agency to bring virtually all fracking operations in the country under its authority.” He believes it’s key to narrowly define the definition of diesel fuel in the Safe Drinking Water Act.

This halt in production would devastate North Dakota’s amazing job growth, eliminate investments in the American economy, and create massive uncertainty that our nation cannot afford right now. This is a serious issue – the EPA was designed to protect our nation—not be an unnecessary job-killer and a true threat to our nation’s energy security.

Last week, IPAA held its Annual Meeting in La Quinta, California, in the desert oasis of Palm Springs. The sheer number of Annual Meetings IPAA has had – this is the 82^nd – confirms the status of IPAA as a true institution. This meeting was one of goodbyes and hellos as its the end of Chairman Bruce Vincent’s term.

In the past three years, former Chairman Bruce Vincent made quite a splash in Washington, the industry, and in media outlets across the country. From newspapers to television to Congress he proclaimed the amazing benefits of American oil and natural gas and championed America’s independents. Bruce had an interesting three years to lead the industry. He confidently steered us through the storm of the Macondo incident and boldly charged on in the sunny skies of the amazing independents-driven shale revolution.

Bruce has an unparalleled depth of knowledge of policy issues which he communicates sharply and succinctly. In his farewell address, he summed up the policy environment that the industry finds itself in. He said, “The oil and gas industry is part of the solution. We can’t let Washington make us part of the problem.” Here at IPAA, we can truly say it was a pleasure and a privilege working with Bruce and the independent industry will be forever indebted.

At the Board meeting, IPAA elected Virginia “Gigi” Lazenby, CEO and 100 percent shareholder of Bretagne LLC, to be the new chairman. Gigi had previously served as vice chairman with immediate past chairman Bruce Vincent. The Board also elected Mike Watford, CEO of Ultra Petroleum, to be Vice Chairman. The team of Gigi and Mike truly displays the diversity of the independent oil and gas industry. Gigi is the founder of a very small oil and gas production company in Kentucky, and Mike is the CEO of a huge E&P company in Houston. Thus, they can bring two completely different voices to Washington on how regulations affect the independent producer. 

In her acceptance speech, Chairman Lazenby discussed the three themes of “People, Performance, and Politics” for success in the policy world. In particular she highlighted the role of the IPAA Wildcatters Fund, the largest oil and gas association political action committee in the United States. At a time when the Obama administration has been particularly harmful to the industry (see Keystone, offshore plan), it’s more important than ever to elect policymakers who understand the prominent role the industry plays in boosting the economy, creating jobs, and bolstering our energy security.

Gigi also discussed how her lifelong experience in the industry through the good times and bad times has given her a “great education” that enabled her to start her own company—Bretagne, LLC in 1988. She quipped “As the saying goes, ‘the strongest steel is tempered closest to the flame.’ I am proud to be IPAA’s Steel Magnolia!”

A couple more meeting highlights: Former IPAA Chairman Mike Linn won the 2011 Chief Roughneck Award, there was great dialogue with industry leaders on the importance of community engagement, and we had a popular International Committee meeting complete with Australian food, wine, and a even an Aussie industry leader. Also, a few of the staff had the opportunity to explore the canyons on the outskirts of Palm Springs in a jeep!

The greatest part was interacting with our members — the oil and natural gas wildcatters. The people in this industry are the reason why we, as IPAA staff, come to work– to fight for the flourishing of the independent industry. It was especially great for me, at my first meeting, to meet  the people I’ve heard so much about over the past couple months. I want to give a huge thanks to the IPAA meetings department for their hard work in making these meetings so successful. Finally, we are excited to work with Gigi and Mike in the coming years.

Given the politics in Washington, it will definitely be a wild ride.

Did you hear? Louisiana has some big news—news that is far bigger than LSU’s victory over Alabama this weekend. Okay, well maybe not far bigger for hardcore Tiger fans. In fact, LSU is featured in the good news.

Last week, former Louisiana State economics professor Loren Scott released a study which demonstrated how critical the oil and gas industry is to Louisiana’s economy. Every single parish in Louisiana has workers employed by the industry. Including production offshore from the Outer Continental Shelf, the state of Louisiana ranks #1 in oil production and #3 in gas production. Scott’s study showed that “the three sections of the oil and gas industry provided 310,217 jobs, generated more than $16.1 billion in household earnings and supported $77.3 billion in sales by Louisiana firms in 2009.”

However, Scott cautioned that these economic gains are not without serious risks from Washington. Specifically, the Obama administration threatens this growth by attacking the industry in its plan for jobs. Scott warned that this “very mobile industry…can go away” if penalized through tax hikes and burdensome regulations.

Today, Mark Kaiser and Yunke Yu—also hailing from LSU—published a detailed article in Oil and Gas Journal which discussed the impact of the Haynesville Shale on Louisiana natural gas production:

“Conventional oil and gas production in Louisiana has been in steady decline for 4 decades, but in recent years, new technology and innovation has opened up a new resource play in the Haynesville shale that is expected to play an important role in the state for many years. In the past 5 years, shale gas has reversed Louisiana’s gas production decline and promises significant growth potential in the future.”

Kaiser notes that the Haynesville shale play, discovered in the past decade, has estimated technically recoverable reserves of 73 to 289 TCF, making the region one of the largest shale plays in the US. This new technology is a combination of hydraulic fracturing and horizontal drilling – technologies that have been around for decades but utilized now in a new way.

The combined technologies of hydraulic fracturing and horizontal drilling are the key to this access – and are also under attack by environmental groups. Unleashing these technologies is key to protecting and increasing the economic gains from oil and natural gas in Louisiana.

On Monday, the Department of Interior announced that it will extend nearly 1400 deep-water oil and gas drilling leases in order to make up for the Administration’s moratorium and the subsequent permitting delays.

This is clearly a welcome decision, considering the pain that the oil and gas industry is still feeling from the uncertainty following the moratorium. Unfortunately, the Administration did not include shallow-water leases in the extension, which were also severely impacted by the political and economic uncertainty.

Here’s the official IPAA press release:

“We applaud the Department of Interior’s decision yesterday to extend nearly 1400 deep-water oil and natural gas drilling leases. This action will help minimize the general uncertainty that has plagued the oil and natural gas industry since the painful five month deep-water moratorium.

“Unfortunately, shallow-water leases have not been included in this extension. These companies – often smaller, independent producers – have also been adversely affected by the moratorium and the permitting slow-down that followed. We believe it judicious to extend these leases as well.

“Although extending the deep-water leases is an important step to eliminating uncertainty, more needs to be done to promote the industry’s investment and increased economic activity in the Gulf. Therefore, we urge the administration to provide a stable business climate by opening additional offshore acreage for responsible development and developing a robust 2012-2017 five year plan.”

This either is a genuine olive branch to the offshore oil and gas industry in light of the economic hardship the people of the Gulf have faced since the moratorium. It also could be a move to the middle before election season kicks in high gear. Whatever it is, it’s welcome– and we’d like to see more policy moves to streamline the permitting process to promote Gulf development.

Yesterday, the bipartisan Marcellus Shale Caucus held a hearing on the Hill which delved into the technology behind shale gas development. The two presenters represented the technical side of the industry: Dr. Peter Duncan, founder of MicroSeismic, Inc., and Rich Downey, Completions Manager of EOG Resources, a US independent producer.

Producers usually use the technology of microseismic monitoring on the first few wells on a given field in order to fully understand the structure and complexities of the shale rock. The purpose of microseismic monitoring is to give the engineers and geophysicists the exact location of where the fracture or a “fracjob” took in the shale rock. Dr. Duncan described the way microseismic monitoring works as a “stethoscope on the face of the earth.”

Essentially, the geophones, which are typically drilled vertically into the ground, pick up on the waves from the “pops” or breaks from the fractured shale, which release the same amount of energy as a person dropping a can of soda to the floor. Contrary to what enviros would have you fear, this is not the kind of energy that would conceivably cause an earthquake. Targeting these waves reveals exactly where the frack took place (See above picture).

As Rich Downey of EOG explained, companies use microseismic monitoring because the health of a well depends upon containing the fractures within the “zone of interest.”

Let me spell this out. There is no natural permeability in shale. Permeability (whether natural or man-made) is necessary for the extraction of oil and natural gas. Hydraulic fracturing, by blasting water, sand, and a small amount of chemicals into the rock, creates permeability in the rock.

Pressure is absolutely necessary. If the fractures creep even 50-100 feet outside of the zone of interest into a fault line or other point of weakness, which is less compact than the tight shale, the pressure will be lost and thus the chance for permeability and gas extraction will be lost. If the microseismic monitoring reveals the impacts of the fractures are outside of the zone of interest, the company would immediately shut down the fracjob. In other words, the well will be rendered useless.

When drilling opponents say that hydraulic fracturing causes groundwater contamination, it is clear they misunderstand — or misrepresent — the technology which proves otherwise. The horizontal drilling and hydraulic fracturing typically occurs 7000 feet below any viable groundwater. The frack occurs within 100 feet in the shale rock. As Downey demonstrated, the well will be ruined if the fractures extend even 50 feet outside of the zone of interest – let alone 7000 feet – the length of four and a half Empire State Buildings—above to the groundwater. Not to mention, the groundwater is additionally protected with cement casing.

The oil and gas industry has historically been reluctant to delve into the complicated technical prodcedures and explain them to the public. Clearly, it’s difficult. However, thankfully, the industry now recognizes their responsibility to educate the public on the safe practices of hydraulic fracturing and horizontal drilling. This Marcellus Shale Caucus briefing is a perfect example of the kind of education the industry should continue to focus on. After hearing these presentations, it’s impossible not to be floored by cutting-edge technology of the oil and natural gas industry. It truly reenforces the safety of the process. (After all, it’s in the industry’s interest for it to be safe and for their wells to be functioning.)It’s also hard not to question if the environmentalists have taken a second to learn about the technology behind shale gas development…or if they even want the public’s fears to be dispelled.

Too much is at stake for the country in terms of economic growth, energy security, and American jobs for the industry not to educate the public on this technology. The industry must get past the talking points and delve into the difficult geophysics and technology behind shale gas development in order to truly dispel the public’s fears. After all, if the oil and gas industry is successful — as Bloomberg noted today —”Shale Gas Reserves Could Reignite the U.S. Economy.”

This week, businessman Steve Forbes came out in full defense of the industry – and on the attack against President Obama’s anti-industry rhetoric. In Politico, he discussed the political hot button issue of the oil and gas industry’s tax provisions, mischaracterized as “subsidies” by the White House.

Instead of allowing the industry to do what they do best – invest in the economy, unlock energy, and create jobs—Forbes discusses how President Obama and his compatriots in Congress have demonized the industry, painting them as an industry propped up by taxpayer handouts. This could not be further from the truth.

As Forbes points out, “What the president knows, but fails to divulge in making his case, is that U.S. oil and natural gas companies do not receive taxpayer subsidies. The provisions he’s targeting for repeal are the same tax credits and deductions available to a broad swath of other U.S. companies.” In fact, the industry pays an enormous amount to the federal government – over $86 million dollars a day.

Or, look at it this way: “The industry is taxed at an effective rate of 41 percent. For comparison, the average tax bracket for industrial companies is 26 percent. The oil and gas industry pays its fair share. If the president were really interested in creating jobs and economic growth, he would support more domestic energy production rather than punitive tax increases.”

President Obama has made it clear he supports a “green agenda.” Not only do green projects produce a miniscule amount of energy compared to oil and natural gas, they do not create jobs! They are not a real competitive source of energy – Solyndra is not an exception, it’s the tip of the iceberg.  

On the other hand, opening up America’s vast reserves of oil and natural gas and promoting development would create more than 1 million jobs would “create more than 1 million jobs nationwide; channel an estimated $800 billion in additional government revenues; and contribute 10 million more barrels of oil and natural gas per day by 2030.” Why are we arguing again?

It’s truly astounding that President Obama has an answer to the economic crisis by way of the job creating oil and natural gas industry, but instead seeks to stifle their productivity. The oil and natural industry is helping the poor and the middle class across the entire country by providing them with well-paying jobs.  This can be real, lasting economic recovery—if the President stops political pandering.

I encourage you to read the full article.

ConocoPhillips Chairman and CEO Jim Mulva’s op-ed was published in today’s Wall Street Journal. He zeroed in on the job creating power of natural gas that is already re-energizing our nation and the potential jobs if this resource is properly unleashed.

IHS Global Insight has estimated that “more than 600,000 Americans already explore, produce, store and transport natural gas” and that another “2.2 million jobs are sustained indirectly by the incomes of natural gas workers, or in companies that service the industry.” Mulva highlights the great plays of the Marcellus in the East and the Barnett in Texas to showcase the transformative effects of natural gas’ job creation.

Mulva also pointed out that natural gas is a clean – and abundant – energy source. The development of natural gas provides Americans with a low cost, environmentally friendly source of energy. For example, Mulva points out that compared to coal, natural gas yields half the carbon dioxide, uses 60 percent less water, and producers no coal or ash. This should please environmentalists and consumers alike.

A new study released today from the University of Maryland backs up Mulva’s “clean claims” regarding natural gas. The study found that natural gas extracted from shale deposits for electricity production is better for the environment and air than coal. This can also be added to the list that discredits the controversial Cornell study which asserted that coal is more environmentally friendly than natural gas. Nathan Hultman, director of Maryland’s Environmental Policy Program, reiterated that “arguments that shale gas is more polluting than coal are largely unjustified.”

In order for natural gas to create 1.5 million jobs by 2030, Mr. Mulva outlined four main policy recommendations for the government:

“First, governments must stop singling out the oil and natural gas industry for tax increases. Its effective global tax rates already far exceed those of other industries.

Second, when considering new natural gas regulations, government should first assess the adequacy and enforcement of the thousands of existing federal, state and local regulations that already govern production. Duplicative or conflicting requirements add little protection but needlessly increase costs and further stifle the economy.

Third, government must open new areas to exploration, while ensuring sound environmental stewardship.

Finally, although all energy sources are needed, government mandates that force electric utilities to use renewable energy sources such as wind and solar are mistaken.”

However, Mulva also pointed out the natural gas industry’s responsibility to “demystify its work” through educating the public on development techniques and the regulations already in place that ensure environmental protection. In other words, a proactive industry approach to public relations is crucial to developing America’s abundant natural gas successfully and unleashing amazing job potential.

There’s nothing “un-American” about this policy proposal.

With election season almost in full swing, you hear alot of political battling over which candidate or party is truly “fighting for the middle class.” Underneath the political rhetoric on the campaign trail and in Washington, one thing is indisputable. The oil and natural gas industry is changing the lives of middle class people. Let’s hear a few stories.

Colorado:

Rick Davis and mother Ruth Davis: Rick’s father, Joe, told them stories from years ago of Coloradoans striking it rich after oil and gas were discovered underneath their property. He never gave up on that possibility—advising his family to hold onto those rights. Now, years later, Rick and his 88-year old mother Ruth have leased their land to oil and gas to “follow Joe’s dream.” (New York Times)

Ohio:

Cory May: A young veteran and native of eastern Ohio, Cory’s mother is a janitor and his father is an unemployed machinist. For years, Cory (pictured above) thought his only career option for years was either the military or a minimum wage job in a factory. Until the natural gas industry rolled into Ohio and “changed his prospects.” Cory took a two week shale exploration course that upon completion, qualified him to apply for industry jobs. Now he has taken a job cementing wells for Halliburton that pays well above the minimum wage — $60-$70K a year!  “It blew my mind, really. I was like – what? It’s [the industry] coming here? It’s kind of unheard of, really.” (Associated Press)

John Riggs: John works on the drilling rigs in Carroll County, Ohio: Over the roar of engines, he yells, “The benefits are good. They treat you right. Where else are you going to find a job working six months a year making one hundred grand?” (The Plain Dealer)

Donna Sauer: The sleepy town of Carrollton, Ohio in which Donna has lived and owned Donnna’s Deli for years, is all of a sudden fresh with activity, excitement, and – customers. She calls the roughnecks, engineers, and surveyors (her new customers) “the gas guys” and describes them as really the “nicest people…extremely courteous.” The oil and natural gas industry and the residents have a mutually beneficial relationship. Donna describes, “We’re happy they’re here, and they’re happy to be here.” (The Plain Dealer)

Monica Wetherell: The Wetherell’s family property in the hills outside of smalltown Stuebenville is on land which has natural gas reserves. Once used as a dairy farm, it will soon be leased to a drilling company for one million dollars. “It’s peace of mind … knowing that when the money comes we’ll be able to put money away for college for the kids, pay off some debts.” (ABC News)

North Dakota:

Barb Russell: A 60 year old grandmother from Farmington, Barb moved to the oil fields of North Dakota to improve her job prospects. Barb sure did—in the form of a tripled income. She now uses her prior experience as a school bus driver to bus Halliburton workers to the drilling rigs every morning. (Star Tribune)

Mark Luna: An unemployed electrician from Phoenix, Mark started sending resumes to Bismarck, North Dakota when he heard about the Bakken boom. In Arizona, “it took 30 days just to get a call back…Here, it took only a week” – to get an offer. Two weeks later, Mark moved with his family to North Dakota. (ABC News)

Yesterday, the U.S. Environmental Protection Agency (EPA) announced its plans to develop standards for wastewater discharges produced by natural gas extraction from underground coal-bed and shale formations. Although a great deal of wastewater is reused or re-injected, the EPA says, there is some that needs to be disposed of. Right now, wastewater is prohibited from being directly discharged to U.S. waterways. In their statement, the EPA said that it will “consider standards based on demonstrated, economically achievable technologies, for shale gas wastewater that must be met before going to a treatment facility.”

IPAA immediately sent out a press release with IPAA President and CEO Barry Russell’s comments on the announcement. From the press release:

“We agree with Administrator Jackson that the needs of our energy future should be met safely and responsibly. America’s wastewater has been managed under the federal Clean Water Act in partnership with state regulators since 1972.  EPA’s action to develop new standards for these discharges is an ongoing part of its Clean Water Act responsibilities.  The new guidelines EPA develops will then be used by states to regulate specific wastewater discharges. 

“We stand ready to work with EPA and other stakeholders on the development of these guidelines. As the EPA notes, wastewater from shale gas development cannot be discharged into waterways, and the underground disposal of wastewater has been federally regulated by the EPA for nearly four decades.  Moreover, no wastewater resulting from shale gas development is currently discharged untreated into surface waters.”

Essentially, the press release clarified how wastewater has been already regulated by the states since 1972, through federal delegation under the Clean Water Act. It also highlighted how the oil and gas industry “continues to increase the amount of wastewater that it recycles, improving from near zero percent just a few years ago to nearly 100 percent in the Marcellus shale.”

Russell’s comments were immediately picked up in The Hill, Los Angeles Times, Miami Herald, The Olympian, ProPublica, Gas Daily, E&E News, and the Kansas City Star.

Last week, GOP Presidential Contender Governor Rick Perry unveiled his plan for job creation, entitled “Energizing American Jobs and Security.” A pro-develoment energy policy is the foundation for Perry’s plan to create jobs.

First of all, Governor Perry lays out why President Obama’s energy policy has utterly failed. Essentially it boils down to a policy of restriction—restriction of access to American industry and restriction of industry activity. American jobs have been the victim of this restrictive energy policy. Perry criticizes the slow permitting of the Gulf of Mexico since the 2010 spill and drilling bans on federal lands in onshore and offshore Alaska. One main critique is of the Obama Administration empowering of an “overzealous” Environmental Protection Agency, which has enacted regulation that is “more than economically painful, it is completely unnecessary.”

Governor Perry’s own plan greatly encourages oil and natural gas development. He proposes opening up restricted federal lands from Alaska to the Southern Atlantic Outer Continental Shelf and speeding up and streamlining the offshore permitting process in the Gulf of Mexico. Onshore production is crucial to his plan. He points out that developing the vast reserves of oil and natural gas in the West could create over 500,000 jobs! Not only would this boost the U.S. economy but these “western oil and gas resources are projected to produce more energy than total U.S. imports from Saudi Arabia, Iraq, Kuwait, Venezuela, Colombia, Algeria, Nigeria, and Russia.” He also specifically spotlights the Marcellus Shale in the Northeast, which, if unhampered by government restrictions and bans, could create over 250,000 jobs by 2020. Needless to say, these are all great recommendations. We have time and time again touted both the economic side of the energy development coin and the energy security side.

It’s no surprise that Perry, who as Governor as Texas has witnessed firsthand the overreach of the EPA, wants to dismantle the EPA in order to curb the power of this regulatory, job-killing threat. He proposes that 60 percent of the current EPA budget be redirected to the states – who are closer to local communities and closer to the environmental issues – and therefore have the greater ability to regulate the industry. He would also enact legal reform. In other words, neither the EPA abuses of the Clean Air Act / Endangered Species Act nor attempts to regulate greenhouse gas emissions would stand under a Perry Administration. The entire oil and gas industry could breathe a sigh of relief. This elimination of uncertainty would bring more investments into new onshore development projects and new jobs would be created.

As for the Department of Interior and the affiliated agencies underneath it, a President Perry would certainly not defund them. Instead, to solve the offshore permitting problems he would tighten them up by clearing the red tape and creating concrete timelines for the federal government to approve offshore permits for development. We would like to emphasize that a fully funded Department of Interior—specifically the Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM) is essential to having a healthy, regulated, and successful industry in the Gulf.

Out of a number of other policy recommendations not directly related to oil and natural gas – such as opposing a federal renewable portfolio standard (RPS) for electricity generation, he sort of slides in comprehensive tax reform. He advocates for a “flatter corporate tax code” and for eliminating all energy subsidies, but he does not go into too many details. His generality in discussing overhauling the current tax structure is troubling in light of the complexity and enormous political relevance of this issue. Perry’s economic team would do well to read the IPAA analysis on how the current tax code has provided industry investment for decades. Revising  the tax code to eliminate intangible drilling costs (IDC) and percentage depletion would devastate the independent producers—who drill 96% of our nation’s wells—potentially making them uncompetitive with larger companies. However, it’s unclear if Perry is targeting these provisions.

Besides my huge caveat on revising the tax policy, which is a huge cause for concern, this plan is great for job creation. Unfortunately, although Perry is 100% correct that unlocking our nation’s vast energy reserves is an essential part of “putting America back to work,” it’s going to be difficult for him only to have only energy as his jobs platform, as many Americans may minimize his as a provincial focus (“yes, yes, we know you like oil and natural gas, you’re from Texas”)

However, this crucial link between energy development and job creation and economic recovery can NOT be underestimated. Texas’ success in job creation through energy development is an invaluable lesson for whoever America chooses as the Republican presidential candidate. Whether the jobs plan is 9-9-9 or 59 points, the GOP candidate better remember the 1.2 million well-paying jobs that developing America’s vast resources of oil and natural gas will undoubtedly create.

In September, the National Petroleum Council (NPC), a group of industry, regulatory, academic, and manufacturing representatives, released its final set of recommendations to Secretary of Energy Steven Chu. Among the report’s key findings, the council determined that America’s potential oil and natural gas reserves are both much greater than previously thought and that the nation needs both oil and natural gas despite efforts to diversify its energy portfolio and become more energy efficient.

Today, the Center for Strategic and International Studies (CSIS) hosted a panel in which report contributors delved deeper into the recommendations of the report, which is entitled “Prudent Development of North America’s Oil and Gas Resources.” I attended the event and here’s what I heard.

Chris Smith, Deputy Assistant Secretary for Oil and Natural Gas at the U.S. Department of Energy, gave the opening remarks. He lauded the industry’s innovations, such as the technologies of horizontal drilling and hydraulic fracturing, that have made the development of shale oil and natural gas possible. He acknowledged that “it’s hard to find an industry that’s more technologically sophisticated than the energy industry.”

Smith stressed the “huge” regulatory challenge with regard to shale gas development, and therefore urged for a consistent industry and government message. He also reiterated the concerns of educating the public but also emphasized that “it’s about taking those concerns seriously.”

The Resource & Supply expert, Andrew Slaughter of Shell, focused on the increasing reserves of America’s oil and natural gas resources. The United States has overtaken Russia as the world’s leading natural gas producer. Also, increasing oil reserves have great implications for economic security, he noted, as there is potential to substitute foreign oil imports with American oil.  

However, production and development of these resources does not happen in a vacuum. Slaughter emphasized that these “high production opportunities” are greatly affected by “fiscal and regulatory frameworks.” In other words, the amazing benefits of oil and natural gas development—jobs, economic growth, revenues, and energy security—is threatened by bad energy policy. The United States must institute policies that encourage production of oil and natural gas, for, as Slaughter pointed out, there is not another place in the world with a portfolio of supply options for oil and natural gas like the U.S.

Panelist Scott Moore, who is Vice President of Marketing at Anadarko, focused on the importance of “prudent development.” He said that prudent development is “essential for public trust” and “fundamental to industry success.” Especially in places where the public is not used to an industry presence, like the Marcellus in Pennsylvania, the industry must make a special effort to educate and enter into a dialogue with the public to not only assuage their fears about drilling but also change their own behavior to comply with the concerns of the public. This includes expanding the role of STRONGER – the State Review of Oil and Natural Gas Environmental Regulations– and FracFocus. Moore also stressed the need for more effect methodologies to measure the environmental change before and after well site activity. He also pointed out that the oil and natural gas industry pays over $250 million in state, federal, and local taxes each year.

Finally, Clay Bretches of Anadarko outlined the five basic policy recommendations that the National Petroleum Council had for Secretary of Energy Steven Chu:

1. Support prudent development.

2. Better reflect environmental impacts in markets and choices.

3. Enhance efficient use of energy.

4. Enhance regulation of markets.

5. Support intellectual capital and skilled workforce.

These are all essential for successful and sustainable development of American vast oil and natural gas resources. For more information please visit the National Petroleum Council website at www.npc.org.

The September energy article of National Journal’s magazine discusses the “Good News, Bad News” of the vast new supply of America’s petroleum reserves. The article correctly highlights the great economic implications of the vast oil reserves in North Dakota’s Bakken shale play. However, the “bad news” that these abundant reserves somehow cannot translate into increased energy security for America is simply wrong.

America’s oil shale plays like the Bakken—but also the Eagle Ford, Marcellus, Haynesville, Barnett, and now the forthcoming Utica (all which Davenport neglects to mention)—are causing an energy security revolution. The United States has increased its oil production by 10 percent since 2008 due to an increased production from oil found in these plays.

The article to expect “no change in the numbers that really matter” regarding America’s reliance on foreign oil. But let’s take a look at these numbers.

From 2005, foreign oil imports have decreased from 60 percent to 47 percent today. That’s a 13 percent decrease of reliance on foreign oil in just five years. Fewer imports mean a greater insulation from global oil supply shocks and thus a greater protection from global political pressures.

In a new report released this month, Goldman Sachs projects that American oil production should reach 10.9 million barrels a day by 2017. This would launch the United States ahead of Russia and Saudi Arabia to become the world’s top producer of oil.

Last week, Declaration of Independents addressed this very issue in the latest analysis entitled “American Oil Transforms World Energy Geopolitics.”

“Because these [oil shale] plays are named by their regions, and we often track the trends in economic growth and job creation by looking at the micro-level, the temptation is to call this shale oil boom a ‘regional phenomenon.’ The regional impact of these oil shale plays is indeed tremendous—the economies of local communities, cities, and states are being transformed. However the impact of this collective oil boom is by no means confined by state, region – or even country – borders … Combine America’s increasing energy production with the continuing political turmoil in the Middle East (Libya’s oil supply shocks, for example) and we have reason to believe as Amy Myers Jaffe concluded – ‘America may be back in the energy leadership saddle again.’”

Contrary to what the National Journal piece espouses, this certainly looks like “a change in the fundamentals” of American energy security to me.

A couple of weeks ago, I blogged about the discussion of the Secretary Energy Advisory Board’s (SEAB) Shale Gas Subcommittee Report at the Center for International and Strategic Studies (CSIS). On Tuesday, I attended the Senate Energy and Natural Resources Committee’s hearing on the 90-day report.

The panelists, who were part of the Shale Gas Subcommittee appointed by the Department of Energy, were made up of Dr. Daniel Yergin (shown above), Dr. Stephen Holditch, Dr. Mark Zoback, and Ms. Kathleen McGinty. These panelists were experts in their field – and Ms. McGinty was a former Pennsylvania Department of Environmental Protection secretary. The panel discussed that amazing benefits of shale gas and unanimously supported a common-sense approach to the environmental issues surrounding shale gas development.

For example, Dr. Yergin—author of the new best-selling, critically acclaimed book “The Quest: Energy, Security, and the Remaking of the Modern World” cited that shale gas accounts for 30 percent of total natural gas production – and he noted that that number is only slated to grow. He discussed the amazing benefits of shale gas development—several hundred thousand jobs, lower energy bills, and billions in economic revenue.

Dr. Stephen Holditch emphasized that the fluid in hydraulic fracturing is 99.5 percent water and that the chemicals that make up the 0.5 percent can be found in common household items. He stated that there is “absolutely no evidence hydraulic fractures can grow from miles below the surface to the fresh water aquifers.”

Of course, all agreed that the process must be regulated safely and soundly. The panel unanimously supported a common-sense approach to the environmental issues surrounding shale gas development. They praised state regulatory regimes like STRONGER (State Review of Oil and Natural Gas Environmental Regulations) and joint industry efforts like FracFocus. They emphasized the regional differences between shale plays which give states the best ability to regulate the industry. Yergin emphasized that a federal regulatory superstructure on top of the already successful state superstructure would hinder investment and actually remove the process from the local communities.

The Senators, on the whole, agreed. Senator Lisa Murkowski touted the “game-changing technology” that has enabled this development and agreed that the United States shouldn’t “try to apply a one-size-fits-all” approach to shale gas extraction.  Senator John Hoeven, also a former governor of North Dakota and therefore quite familiar with shale gas development, said that the U.S. needs to regulate hydraulic fracturing “in a way that empowers the state and the industry to move forward.” The main stickler in the bunch was Senator Al Franken, who suggested that instead of the government, the industry should pay to regulate itself. Needless to say, if this ever was the case, folks like Franken would say that the industry had cozied up to the regulators and perhaps even that the industry was buying the regulators off.

Overall, the hearing was a successful dialogue regarding the issues confronting both the industry and regulators. Above all, it’s essential that state regulators and the industry need to go out and speak to local communities to discuss not only the economic benefits of shale gas development but also the environmental impacts. The public has an absolute right to know what’s going on in their communities.

For more information, Energy in Depth has a fantastic roundup of quotes from the hearing.

The Independent Petroleum Association of America (IPAA) — founders of the EID program back in 2009 — announced this week  the creation of a new regulatory compliance system to help Marcellus  operators better understand and ultimately meet and exceed the regulatory rules as they exist in the Commonwealth.  The asset, developed by experts with decades of experience in Pennsylvania, will assist operators in navigating the state’s complex regulatory system, which includes eight different agencies implementing regulations based on more than 100 different state and federal statutes, some of which can be found here.  The new tool will be critical in helping operators continue their trend of producing fewer violations, safer operations, and greater efficiency in developing resources from shale.

Read on, here…

In light of the amazing developments in Ohio’s shale oil and natural gas reserves in the Utica shale play, Energy in Depth (EID) – the outreach and education project, managed by IPAA, which focuses on researching, explaining, and setting the record straight on oil and natural gas energy development – launched a new Ohio initiative. 

Energy In Depth Ohio will seek to engage in and add something meaningful to the emerging energy conversation, identifying and mobilizing many friends to stand up in support of a commonsense, homegrown energy strategy for Ohio.

The work is well underway. Groups such as the Ohio Oil and Gas Association (OOGA) and Ohio Oil and Gas Energy Education Program (OOGEEP), have helped make this project an authentic grassroots reality.

Just yesterday, EID Ohio Field Director Shawn Bennet, a Cambridge, Ohio native, met with the Muskingum County commissioners regarding the development of Ohio’s oil and natural gas resources. Bennet related the illustrious safety record of America’s oil and gas industry regarding the proven technologies of  horizontal drilling and hydraulic fracturing. According to local southeastern Ohio Whiz News, he told them about the 80,000 hydraulic fracturing jobs in Ohio since drilling began in the 1950s–and not one proven case of groundwater contamination among them.

Bennet also discussed the enormous economic ripple effects that drilling would have. “You’re going to have hotels that are going to be booked solid, restaurants that are going to have waits, money that will be spent throughout the community at all of the local businesses.”

This is great news for Ohio. However Bennet and the other folks on the team have a formidable enemy bent on persuading the public to ban energy development in Ohio. These well-funded environmentalist groups, mostly directed from outside the state, are also up and running — and determined to distort the facts. Therefore, EID Ohio, parterning with OOGA and OOGEEP will have to engage the people of Ohio—to educate them on the history of the industry, the methods of energy development, and the economic benefits that the state will reap from this development.

EID Ohio is also reaching out to the people directly through a cohesive online effort. To learn more, visit the website at www.eidohio.org and follow them on Twitter @EIDOhio.

Last week, the Ohio Oil and Gas Energy Education Program (OOEGEP) rolled out a study which projected the economic impact of the vast oil and gas reserves in Ohio.  The study demonstrated that in just four years, more than 200,000 jobs would be created due to industry drilling, exploration, leasing, and royalty revenues from the Utica shale play. Thus, the oil and gas in Ohio means a $12 billion increase in overall wages and a $22 billion increase in economic output for the state of Ohio.

Like the IPAA analysis projected in August, the Utica shale play is going to be a game-changer for Ohio. Since then, here’s what folks have been saying:

Ohio Governor John Kasich at Columbus energy summit last week: The Utica “means that people in the eastern part of this state, who have been living in many ways in poverty with the shutdown of great industrial production in Ohio, they may have another chance.”

“When you think about Marcellus and particularly Utica shale in the eastern part of this state, it’s unbelievable.”

Mark Mills, Forbes contributor said in Buckeye Oil Billions Will Unleash an Ohio Manufacturing Tech Boom: “A prediction.  The Ohio Valley is on track to become a hotbed of innovation.  And one which will almost certainly focus on 21^st century manufacturing.”

Ohio State Representative Jay Hottinger in the Newark Advocate: “Instead of raising the tax burden on Ohio’s hardworking families, the government can fund operations by utilizing [oil and natural gas] right under our feet. I am a strong supporter of such commonsense solutions that allow Ohio to help itself.”

Ohio is on the verge of an economic revival. Towns which have been struggling for decades since the flight of manufacturing are about to wake up and smell the oil–oil that can now be accessed due to cutting edge industry technology. That’s a real reason to be energized.

Energy policy can make some strange bedfellows. Former President Jimmy Carter is once again promoting his policy for energy independence—this time touting natural gas. Throughout his presidency, Carter was a strong advocate of green energy, even pledging that our nation would generate 20 percent of our energy through renewable sources like solar and wind. He believed that renewables were the only way to insulate our nation from supply shocks and reduce our reliance on foreign oil.

It’s absolutely clear that our nation is nowhere near to being able to rely on wind and solar—and President Carter now admits that. In fact, even with massive subsidies from the government, renewable energy sources only account for 11 percent of American energy production. In an interview with Platts this week, Carter revised his vision for the future: “If you substitute for some of the dreams I had on solar energy the newly realized supply of natural gas then we can reach that goal in a different way.”

Natural gas is the cleanest fossil fuel and we have it in abundance here in the United States. The latest Potential Gas Committee (PGC) study recently increased the technically recoverable reserve base for our country to 1,898,000 billion cubic feet – the highest the PGC has ever published in its 46 year history. Our nation has reserves that yield over a century of secure American natural gas supply. For more information on natural gas in America, please see the new IPAA natural gas analysis.

President Carter said that these reserves were a positive thing for our nation and he is absolutely right. Utilizing natural gas helps put us on a real path to energy security as it lessens our need for foreign imports drastically. Plus, natural gas is a cleaner fuel that has the potential to build gaps between the energy industry and environmentalists.

Carter warned, “If the Americans don’t get the message from ordinary intelligence and study and political leadership, they will have to get the message from crises that will arise in the future that threaten the well-being of our country.”

In other words, listen up enviros: natural gas is the new green.

In his jobs plan, President Obama remarked “Building a world-class transportation system is part of what made us an economic superpower” and called on Congress to reboot this system in order to stay strong and create jobs. In response, IPAA in its Declaration of Independents hat, released an analysis of oil’s role in transportation infrastructure.

No honest conversation about our energy needs and energy future is complete without discussing America’s transportation demands. In fact, according to the Energy Information Administration (EIA), transportation made up almost 28 percent of our entire energy demand in 2010. What fuels make up this transportation demand? You guessed it, oil– it makes up an outstanding 93 percent of American energy transportation demand. Oil is also a crucial building block of highway construction as petroleum products help create asphalt and concrete.

Based on projections by the Energy Information Administration’s Annual Energy Outlook, which assumes a static policy scenario, the IPAA charts demonstrate petroleum demand will continue to increase by the year 2035, even while we further diversify the U.S. energy portfolio. The analysis also compared the recent studies by the government, an industry council, and a renowned petroleum economist to demonstrate that America’s reserves of oil can keep up with this demand. Please read the complete analysis for more information.

As the analysis writes, “Petroleum is the fuel of America—our consumers want it, our economy and infrastructure require it, and our companies have the technology to supply it from home.” However, if President Obama succeeds in his war against American oil producers and successfully overhauls the tax structure that has encouraged industry investment for decades, our nation’s energy security, economic security, and job security will all suffer.

America needs petroleum and we have a choice of where it can come from. We can either produce American oil or we can rely on expensive imports, increasing our dependence on foreign countries hostile to our way of life. President Obama is choosing imports; we think it should be American.

Today, the Center for Strategic and International Studies (CSIS) hosted a discussion on the Secretary Energy Advisory Board Shale Gas Subcommittee Report. The talk featured Dr. John Deutch, Chairman of the subcommittee and professor at the Massachusetts Institute of Technology (MIT). This report, the first part of which was released in August, was conducted in response to a request from Secretary of Energy Steven Chu who directed the committee to monitor and give recommendations to the potential environmental impacts of shale gas development. 

Dr. Deutch emphasized that unanimously, the panel found no environmental damage potential significant enough to lead them to recommend a moratorium on natural gas drilling of any kind. In fact, he lauded the enormous reserves of shale gas to be the “best piece of news for energy in the U.S. in the last 50 years.” Shale gas gives him the confidence, he said, to “look forward to the day when domestic natural gas displaces foreign oil in the United States.”

Regarding the industry progress of further minimizing environmental costs, Deutch was extremely optimistic. He pointed to the industry’s proven track record of improving technology in order to gain access to more reserves with a smaller environmental footprint. For example, he highlighted horizontal drilling, which allows a dozen wells to be accessed from one well pad, reducing surface impact and truck activity by 60 percent. He expects the water used per well to decrease significantly in the next few years.

The subcommittee’s main recommendation for industry was the absolute necessity for measured field data in assessing environmental impacts and the industry’s progress in minimizing them. He believed that disclosing the results was essential to quelling the fears of the public and instilling confidence. IPAA believes that industry initiatives like FracFocus, the hydraulic fracturing chemical registry website, can be a tool to do this.

Because the regional differences are so important, the subcommittee preferred the role of state and local regulators over EPA and other federal top-down regulators. State and local regulators need to showcase their efforts, like the effective public, private, and government collaboration of STRONGER—the State Review of Oil and Natural Gas Environmental Regulations.

It is absolutely vital for the industry and state regulators to step up and highlight their efforts and progress to the public. As Deutch noted, the greatest public concern about shale gas development comes in regions where the public is least familiar with the industry. It is the industry’s responsibility to tell the public of the enormous economic and national security benefits of natural gas development, while convincing them of the environmental progress made in development.

A few weeks ago, Washington political world was a-buzz with the news that President Obama decided to back off an EPA rule to tighten Bush-era ozone standards due to the enormous burden it would put on businesses. This was an absolute win for the industry, but a blow to Lisa Jackson, the head of the Environmental Protection Agency, who has been crusading for this rule since she became head of the EPA in 2009. She went so far to say that the current ozone standards were not “legally defensible.”

Following the announcement, many inside the Beltway questioned Lisa Jackson’s tenure at EPA. However, she publicly and respectfully agreed to stand behind President Obama’s decision, making  it clear that she would not be leaving.  In the weeks following, Obama has made inroads to mend fences with environmental groups. In a press release, he suggested that backing off the job-killing ozone rule was an exception and wrote, “Work is already under way to update a 2006 review of the science that will result in the reconsideration of the ozone standard in 2013.” In other words, “we’ll pick this up later.”

Whether or not President Obama has made personal promises to Ms. Jackson to more harshly regulate the oil and natural gas industry in order to make up politically for backing off the EPA ozone rule, one thing is apparent: In recent weeks, Obama has amped up his anti-industry sentiment in his pitch for jobs.

Right now part of his jobs plan is calling for repealing the “tax loopholes” on oil and natural gas. In reality, these investment-encouraging provisions are applied to all industries. Repealing these provisions is not only counterproductive to job creation, but actually destructive as it would cost thousands of jobs and particularly devastate the smaller independent companies. Please read the IPAA tax structure analysis to learn how repealing the historic provisions will cost the country.

President Obama is nervous about the vocal environmentalists. What Obama should be most concerned with is job creation. In fact, the oil and natural gas industry is one of the only industries currently creating a large amount of well-paying jobs in spite of economic turmoil.  But for radical environmentalists, the fact that the nation is facing an economic crisis is not paramount. Despite the fact that the oil and natural gas industry overall has an extremely safe track record, these environmentalists believe quelling industry and development is a absolute moral issue. In reality, the moral issue is putting Americans back to work. Millions of families are struggling. People are taking jobs that they are overqualified for. Companies, burdened by regulations, are forced to lay off workers or close up shop completely.

President Obama is seeking to appease the environmental wing through hurting the oil and natural gas industry. It’s clear that overhauling the tax provisions for the industry would be the ultimate trophy for environmentalists. For the sake of job creation, economic growth, and energy security—lawmakers, the public, and industry must fight to ensure that they do not succeed.

Last week, Director Michael Bromwich announced that the Bureau of Ocean Energy, Management, Regulation, and Enforcement (BOEMRE), the federal agency that oversees offshore drilling, will be devolved into two separate entities. As if there wasn’t enough red tape already for oil and gas companies.

Before permitting applications and exploration plans were both vetted through BOEMRE. Now, starting October 1, oil and gas companies looking to drill offshore will have to go through two separate agencies: the Bureau of Safety and Environmental Enforcement and the Bureau of Ocean Energy Management. Previously, BOEMRE was previously the Mineral Management Service (MMS).

This new administration shakeup is worrisome for oil and gas producers, who have already had a lot of trouble getting permits approved after the Macondo incident. Last month, the administration announced that the first lease sale since Macondo, which occurred in April 2010, will be in December of this year. Yesterday, at a meeting at the Center for Strategic and International Studies, Bromwich blamed the industry for these delays. “Instead of commissioning studies that don’t bother to understand how the process actually works, they would be better served by devoting more resources to improving the quality of their applications.”  Citing the letter that IPAA signed and sent to President Obama last week, Bromwich called industry studies, which demonstrate the economic impacts of the permit slowdown, “politically motivated” and claimed that the numbers were “made up out of thin air.” This includes, of course, the Quest Offshore study, commissioned by the American Petroleum Institute, which demonstrated that the industry could create 190,000 more jobs over the next two years if offshore oil and gas producers were able to ramp up their activity to pre-Macondo levels.

In the thick of this shakeup, the Department of Interior (DOI) and BOEMRE jointly announced six new safety regulations on the offshore industry. The rules would require drilling operators to identify and avoid risks in an effort to reduce the number of human and organizational errors that could lead to accidents or oil spills. IPAA, with the offshore oil and gas industry, remains 100 percent committed to promoting the safety of its workers. However, it seems strange to create new regulations at a confusing time for the administration—when BOEMRE is being divided and reorganized. Michael Bromwich himself has admitted that he is “sure there will be some surprises” in the restructuring process.  

New regulations announced at a very uncertain time for the offshore drilling agency may not be the wisest move. The agency is already backlogged with the amount of permits that need to be approved offshore. Hopefully the economic benefits our nation could reap are not stifled. We shall see. After all, as IPAA Vice President Dan Naatz warned, the industry is “headed into unchartered waters here.”

In remarks this evening before a Joint Session of Congress, President Obama repeated his interest in raising taxes on oil and natural gas companies as a means of addressing the federal deficit. In response, IPAA President and CEO Barry Russell released the following statement:

“It is unfortunate that, at a time of historically high unemployment and nominal economic growth, the President would once again propose raising taxes on America’s oil and natural gas producers.

“The President’s recommendations for improving transportation and the nation’s infrastructure fail to recognize the energy required to make these programs successful.  It will require oil and natural gas — which should come from American resources.  Instead, he calls for taxing our nation’s oil and natural gas industry, one of the few industries that actually is creating jobs today.”

“Contrary to popular belief, the tax proposals laid about by the President would not chiefly impact ‘Big Oil,’ but rather the 18,000 independent oil and natural gas producers in the United States who on average employ only 12 workers. These companies drill 95 percent of the nation’s oil and natural gas wells and account for 67% of total domestic production of these resources.

“The oil and natural gas industry as a whole generates more revenue for the federal government than any source other than income taxes, paying an effective federal rate of 48% plus substantial state and local taxes. In fact, a recent study by IHS Global Insight showed that independent producers could generate $930 billion for state, local, and federal governments in the form of taxes, rents, and royalties over the next decade, as well as support the creation of approximately 900,000 new jobs. The President’s proposal to raise taxes, however, would only generate an estimated $30 billion, while also crushing jobs and significantly weakening America’s ability to produce its own energy.

“If the President is truly interested in reducing the deficit and creating jobs, he needs to recognize the important role that independent producers can continue to play in fueling a short-term recovery and a long-term revitalization of America’s struggling economy. Calling for a series of shortsighted tax hikes, however, will move this country in the opposite direction, and will result in fewer American jobs, larger deficits, and an even greater dependence on foreign, unstable regions to meet our growing energy needs.”

Tonight, in front of Congress, President Obama will announce his much-anticipated jobs plan. The cost of the plan is set at $300 billion, much to the chagrin of many lawmakers in Congress who want to scale back the government’s spending spree due to a deepening national debt. 

In Detroit last week, President Obama gave a preview of his plan in front of labor union members, which includes putting people back to work through government-funded construction projects reminiscent of the stimulus package. Later in the speech, he called out Republicans in Congress for defending the historic tax structure for oil and gas companies: “…you say you’re the party of tax cuts?  Well then, prove you’ll fight just as hard for tax cuts for middle-class families as you do for oil companies and the most affluent Americans.” In fact, these lawmakers are actually helping middle class families.  The historic tax structure encourages private American investment and, consequently, American jobs. Read how repealing the tax structure for American oil and natural production will cost this country.

It’s puzzling that President Obama continues to target the oil industry, considering it’s one of the few bright spots in this dismal economy actually creating a large amount of well-paying jobs. The oil and natural gas industry could be an even larger pillar for job creation if the President changes his administration’s course on energy policy. John Schiller, chairman and CEO of Energy XXI, targeted the problem, saying “if the government would get out of the way, from a regulation standpoint, and let us [XXI] do what we do good, you’ll see us continue to hire and grow this economy.”

Meanwhile, Americans are echoing this frustration at the administration. President Obama’s job approval ratings are at an all time low of 38 percent, numbers which came in the wake of news that no new jobs were created in August and unemployment remains at 9.1 percent, despite White House forecasts that it would drop to 8.3 percent in 2012.

Yesterday, a Wood Mackenzie study revealed that policies that expanded drilling in the United States would create over 1 million jobs by 2020. The study looked at the effects of policies which would loosen regulatory restrictions on drilling to open up vast areas of resource-rich land for development—land that is now off-limits. It included policies that would speed up permitting in the Gulf, open up New York for shale drilling, and approve the Keystone Pipeline XL. Not only would jobs be created, but the government’s own bank account would be replenished. The study estimates that wider development would add $36 billion in new revenue by 2015 and $803 billion by 2030. The study reported that in addition to jobs, these policies would produce an additional 1.27 million barrels of oil-equivalent (BOE) per day by 2015 and 4.19 million BOE in 2020. This goes a long way to increasing our energy security and minimizing our dependence on foreign oil—two goals President Obama says he supports.

IPAA, along with an array of industry groups, sent a letter to Obama that called for faster offshore oil and gas permitting in his plan for jobs. We’ll see if Obama’s jobs plan does indeed include a responsible energy policy that develops our rich resources and puts Americans back to work or if he will continue targeting and demonizing the very companies that are keeping this economy afloat. The American people—desperate for work—will be watching.

In the context of a sinking economy, President Obama announced the appointment of Alan Krueger as his top unemployment advisor in the president’s forthcoming jobs plan set to be revealed next Thursday.

In response to this, IPAA released an analysis of the Federal Reserve Board’s (FRB) monthly index of industrial production. Our economic team detailed the percentage change from January-July of 2005 with January- July of 2011 of oil and gas related sectors compared with other industries. Here’s what they found.

Industries directly related to oil and natural gas production have a significant role in the Federal Reserve Board’s data – accounting for more than 10 percent of the overall value of the index.

 “As the chart shows, one of the few bright spots for output growth across industries has been the upstream (exploration and production) oil and natural gas sector. While the overall index has shrunk by 2.3 percent over the period, all the sectors shown for upstream oil and gas, including crude oil production, natural gas production, extraction of natural gas plant liquids, drilling, and oil and gas field machinery, have shown increases over the period. The index for natural gas production is up more than 20 percent, while crude oil production is up a lesser two percent, but notably reversing a prior decline.  Extraction of natural gas liquids rose more than 16 percent.  The increases for drilling services (up more than 16 percent) and “mining and oil and gas field machinery” (which nearly doubled) further reflect the robust role of oil and natural gas production.”

If Alan Krueger is interested in job creation, he must look at what the oil and natural gas industry is already doing to create jobs and grow the economy. Unfortunately, IPAA revealed that Krueger is no friend to the oil and gas industry: During his tenure as assistant secretary and chief economist at the Treasury Department, he said this: “policies [such] as a cap-and-trade system or investing in clean technologies are a more effective way to reduce our vulnerability to an oil price shock and promote energy security than are tax subsidies that encourage oil companies to extract more oil from the ground than is economically justified without such subsidies.”

A cap and trade system which is in fact, a tax on energy, has been reviled by the American public. It is a poor excuse for energy or economic policy which would not only devastate the oil and gas industry, but would hurt the American consumer and greater economy as well. IPAA has also demonstrated that revising the historic tax code would target the investments of the independent oil and gas producers, and would cost this country—in terms of jobs, revenues for the government, and energy security. Please read the IPAA tax structure analysis for more information.

If policymakers like Krueger and Obama want to grow the economy through job creation, government spending, and consumer spending, they must look to the oil and gas industry, specifically the independents. To learn more about how independents promote economic growth in all three ways, please read the full analysis: Oil and Natural Gas Industry is Lifeline to Sinking Economy.

About two months ago, the state legislature of New Jersey voted to ban hydraulic fracturing there altogether and sent this bill up to Governor Chris Christie to be signed into law. As I blogged, Energy in Depth sent a letter to Governor Christie of New Jersey, asking him to veto the bill. The industry, environmental groups, and the general public waited to see what Governor Christie would do.

Late last week, Governor Christie vetoed the bill—but recommended to instate a one-year moratorium on hydraulic fracturing in order for New Jersey’s Department of Environmental Protection could study the matter. While this one year moratorium is obviously preferable to an outright ban of hydraulic fracturing, it is still not an industry victory.

Instating a ban of any time frame suggests that hydraulic fracturing is a threat to the environment. Of over one million wells drilled in the past 60 years using the technologies of hydraulic fracturing, there has been not one proven case where fractured well has been the cause of groundwater contamination.

Lee Fuller of Energy in Depth released this statement:

“It’s unfortunate and ill-advised that Gov. Christie would seek to ban the regulated use of hydraulic fracturing for any period of time, a technology that has been used safely for generations not only in the context of oil and natural gas, but to stimulate water wells and gain access to geothermal energy.

As the Garden State’s natural gas demands continue to tick upward, and with the governor touting the clear benefits of this abundant homegrown resource, banning this time-tested technology in the state – where no operators are actively seeking to explore for natural gas – flies directly in the face of common sense.”

Additionally, New Jersey has no natural gas production, so the ban is clearly a political move. Instead of political positioning, Governor Christie and the state legislatures should model themselves after New York, which has plentiful reserves of natural gas, and where Governor Cuomo just lifted the ban on hydraulic fracturing.

Politics should never trump policy. It is dangerous to create a precedent which suggests something other than the facts: Hydraulic fracturing is a proven, safe method; the utilization of which can unlock an abundance of energy which would create jobs, grow our economy, and increase our energy security.

With rebels finally closing in on Tripoli, people have revamped their speculations about Libya’s troubled oil production. The six month conflict has reduced Libyan oil production from about 1.6 million barrels per day before the start to 50,000 barrels per day now. Although analysts are hopeful that the fall of the Gaddafi regime will enable production to increase to about 300,000 barrels per day in a few months, most are doubtful that it will return to pre-conflict levels until after 2013.

IPAA released an analysis this week which pitted the decreasing Libyan oil production against the increasing American oil production. When juxtaposed against one another, it’s the outstanding gains of U.S. production stand crystal clear. Click here to view the full analysis.

Our economists noted:

“Although all Middle Eastern conflicts make us question the future stability of the oil market, the real answer lies within our own borders. The United States, due to shale and tight oil discoveries cropping up throughout the lower 48 states, is more than making up for Libya’s decreased oil production.”

Shocks in the oil supply are no small matter. However, our oil producers in America—lead by independent producers opening up established and emerging shale plays—have our energy needs covered. These numbers reflect the industry excitement demonstrated at the Summer NAPE® conference, which I blogged on earlier this week.

Clearly, the United States is at a crossroads: we can further restrict our own energy development and leave ourselves susceptible to oil supply disruptions from turbulent conflicts overseas, or we can increase our energy security by enacting energy policy that promotes oil production of our vast resources here at home—which will also provide jobs and give our economy a much-needed boost.

Please visit www.oilindependents.org for more information on how America’s independent oil producers are influencing the global energy market.

The Obama camp has come out on the attack against Texas Governor Rick Perry, the newest presidential contender. Responding to claims that Perry has been instrumental in the vast job creation in Texas, David Axelrod, Obama’s top campaign adviser commented:

“There’s a specific reason that Texas has done so well, and that’s because the oil industry has done so well in the last few years, and the military has grown because of the challenges that we have had overseas. He’s been the beneficiary of things that he had very little to do with.”

What’s that you say? The Obama team is crediting the oil and gas industry as a job creator? Of course, that’s exactly what the industry is, so it shouldn’t be a strange phenomenon that it gets this credit. Unfortunately, as I have highlighted in this blog, the Obama administration has been far from friendly to the industry, demonizing it countless times over the past few months.

On the one hand, Axelrod is correct. The oil and gas industry IS an incredible job creator. At least the administration isn’t denying that (although I don’t know if they’ve ever said admitted this before). A few weeks ago, our economists highlighted this correlation: Out of the top ten petroleum producing states, nine of them have unemployment rates below the national average. The industry creates a huge amount of jobs each year—multiple studies released this year reflect the enormous job creating role of the industry.

On the other hand, the Obama camp is not being fair to Governor Perry. He deserves a great deal of credit because he is enacting good energy policy. After all, what does the administration think energy policy is? Energy policy comes from policymakers—and it enables the industry to do what it does best: tap into our own energy supply and thereby provide jobs, increase economic security, and grow our economy.

Credit should be given where credit is due. Governor Perry, unlike the Obama administration, understands the enormous potential for economic growth that the industry offers, and has promoted drilling in the Eagle Ford shale play in south Texas. This week on the campaign trail he discussed the impact of natural gas on the economy and jobs: 

“There may be copious amounts of natural gas down there. Because the Eagle Ford in south Texas — no one knew it was there until four or five years ago…There are new technologies finding new ways to bring this energy source. And we need to be … talking about ways to make America as independent energy-wise as we can.” 

Good energy policy opens up our federal lands, making it easier for the industry to unlock this supply of energy. Good energy policy minimizes the bureaucratic red tape while allowing state regulatory regimes and best industry practices to work effectively. Good energy policy increases our energy security by allowing us to rely less on supply from hostile countries through tapping our own vast reserves. 

What good energy policy is NOT is a federally imposed moratorium on offshore drilling and delaying over a whole year to sell new leases for the Gulf of Mexico. Good energy policy is not EPA’s continued attempts encroach on state regulatory regimes of hydraulic fracturing. These policies inhibit economic growth, stunt job creation, and increase our dependence on foreign sources of energy. Governor Rick Perry knows that politics doesn’t create jobs, but he knows that good energy policy enables the industry to be outstanding job creators.

Last week, the bi-annual NAPE expo was held at the George R. Brown Convention Center in Houston, Texas. Many members of the IPAA staff traveled to Houston to attend NAPE, the world’s largest prospect and property expo, which IPAA has been a proud partner of since 1995. With over 6000 attendees, NAPE proved once again to be an expo which drew the industry, despite temperatures in Houston reaching 100 degrees.

As part of the conference on Wednesday, Lee Fuller, vice president of government relations at IPAA, was featured on an expert panel entitled, “The Golden Goose – Spotlight on Economic Significance of the U.S. O&G Industry.” Fuller focused on the disastrous economic impacts of changing the current tax structure that has encouraged industry investment for decades and fielded multiple questions from members of the industry about the political climate in Washington.

The special guest speaker at the NAPE Industry Luncheon on Thursday was Lieutenant General Russel Honoré, who commanded the Joint Task Force for Hurricane Katrina. Lt. General Honoré stressed the need cultivating a culture of preparedness, especially in states that are susceptible to natural disasters. The Lt. General is pictured above with Therese McCafferty, IPAA’s vice president of administration and member services.

During the luncheon, the industry gave over $200,000 dollars to charities. One of the recipient charities was Canine Companions for Independence, a non-profit which gives wounded veterans highly-trained assistance dogs that help them regain their mobility and independence. Former Special Forces soldier, Jason Morgan said that his dog, Nepal, helps him everyday, not only physically, but emotionally as well. Jason and Nepal are pictured above holding the IPAA dog toy that members of our staff gave away at our booth. IPAA is proud to support Canine Companions for Independence and encourages all to give back to our troops who make enormous sacrifices for our country’s freedom.

All in all, NAPE was a huge success. At the IPAA booth, we were able to talk with our members, whom we always look forward to connecting with and we also signed up some new members. The next NAPE will take place in Houston (as always) in the winter—we’ll keep you updated with details in the months ahead.

In late June, I wrote about the recent Morgantown city council ban on hydraulic fracturing within a mile of the city limits. This was in reaction to Northeast Natural Energy’s drilling above the Monongahela River about a mile from a city drinking water intake. The company, which had already complied with state’s regulations and recommendations from the Morgantown Utility Board, was slated to lose over $7 million dollars that it had already invested in the drilling site.

However, Northeast Natural Energy did not take this blow lying down. The company called it an illegal power grab by the city and took the city to court. On Friday, the Associated Press reported that Monongalia County Circuit Court Judge Susan Tucker sided with the company, and declared that the city pre-empted the state’s authority in regulatory matters. The state alone has sole regulatory authority over oil and gas operations, the judge ruled. Judge Tucker wrote that the high court has ruled that has also said that when the state and a municipality enact legislation on the same subject, “the municipal ordinance must yield.”

This ruling reflects an important precedent: city councils are not allowed to circumvent the regulatory authority of the states in order to ban drilling around the perimeters of cities. This ruling will hopefully quell the efforts of anti-development groups from targeting specific cities to raise unfounded fear about the process of hydraulic fracturing, which, out of over one million wells drilled, has never been the proven cause of water contamination.

This is a huge victory for both the industry and the people of West Virginia. Drilling in West Virginia has the potential to create thousands of jobs for the people, increase our nation’s energy security, and jumpstart our stagnant economy.

“The release of the SEAB Shale Gas Production Subcommittee Ninety-Day Report marks another instance where evaluation of shale gas development using hydraulic fracturing concludes – on balance – that the current state and federal regulatory processes are effectively protecting the public while allowing the development of America’s abundant natural gas. While the Report makes a number of recommendations, these recommendations are largely directed at improving public knowledge about development and enhancing the effectiveness of the current management of shale gas development environmental risks.”

 All in all the report was a mixed bag. The report stressed the need for industry transparency of hydraulic fracturing chemicals, which IPAA supports, but didn’t go as far as to insist on federal regulation of chemicals. Unfortunately, the report hesitated to acknowledge the success of effective programs in place to regulate hydraulic fracturing. IPAA suggests the industry mechanisms in place, like Fracfocus.org—a chemical registry website—adequately addresses the education of the public on the chemicals used in the process. IPAA also believes that the Department of Energy needs to give more credence to the successful state regulatory regimes already in place, like STRONGER—the State Review of Oil and Natural Gas Environmental Regulations. After all, these regulations have enabled the industry to safely and effectively practice hydraulic fracturing. Horizontal drilling and hydraulic fracturing are not a “one size fits all” technique. Different geologic formations require different methods and techniques. Therefore, the blanket policy of a federal regulatory regime is not the proper response.

All in all, the report may have been the best that could be expected, given the false fear that the New York Times has been stirring up on the proven safe practice of hydraulic fracturing.  At the very least the report is a practical, not emotional response which “stands in stark contrast to the strident, hysterical demands for moratoria on hydraulic fracturing.”

Investors, companies, and geologists are eagerly talking about the Utica shale play, an organic-rich shale rock formation that was formed thousands of years ago and lies thousands of feet below than the Marcellus shale play and is thought to be  “the next big boom in American oil and natural gas reservoirs.” IPAA through its Declaration of Independents initiative, analyzed the different projections of the Utica. In particular, IPAA zeroed in on the Point Pleasant formation of the play, located in eastern Ohio. Point Pleasant is particularly significant because it is thought to be rich in not only natural gas, but  liquids as well.

IPAA discussed the economic ripple effect that development of the Utica, sparked by independents, would bring to Ohio and the U.S.:

“Technological advancements in drilling have now made these once-elusive resources accessible to oil and natural gas companies. With a new supply of energy, come new jobs, government revenues, and economic growth. Thought impossible a few years ago, as Ohio’s private manufacturing jobs have fallen more than 35 percent from 2001, the Wall Street Journal recently reported that a steel plant has been erected in Youngstown, Ohio to meet the demands of the oil and natural gas industry. This is indicative of what jobs the future holds for Ohio. As in most unconventional shale plays, independent oil and natural gas producers are leading the way as pioneers of the Utica shale play. Larger companies are now following suit because of the investor excitement and the huge gains expected there.”

However, IPAA pointed out there are political dangers that threaten development. Environmentalists and other anti-industry groups are working to ban horizontal drilling and hydraulic fracturing, which are how companies drill in shale. They claim that these methods cause groundwater contamination, although there has not been one proven case of this occurring of over one million wells drilled in the industry’s history. Just this Monday, anti-industry groups sent a letter to President Obama full of misinformation and flat out lies, demanding he ban hydraulic fracturing “by any legal means necessary.” The IPAA-managed Energy in Depth industry coalition, published a point by point rebuttal that same day. Energy in Depth is setting up a grassroots campaign in Ohio to promote the job creation, economic growth, and increased energy security that will development of the Utica means for Ohio and the United States.

Governor John Kasich is welcoming the oil and gas industry to Ohio with open arms as experts predict the industry could provide thousands of jobs to the state. He called the Utica a “revolution” and told people “Folks, this is huge” for the economy and people of Ohio. You can’t blame him. He has discovered a jobs-laden, economy boosting treasure that has been quietly hidden for thousands of years underneath the very feet of the people of Ohio.

For more information on what industry experts are saying about the Utica, please read IPAA’s full Utica analysis.

To read more about the role of independents in the American oil industry, please visit www.oilindependents.org.

Once again, the New York Times’ most celebrated shale skeptic Ian Urbina, has attacked the natural gas industry. And once again, the shoddy reporting which NYT’s own public editor criticized Urbina for is in full force. The released story is an effort to discredit regulatory and industry officials, including Lisa Jackson of the EPA, who have stated over and over again that there is not “any proven case where the fracking process itself has affected water.” Urbina used borrowed research from the publicly anti-shale Environmental Working Group (EWG) to write the story. EWG actually showed Urbina’s cards when they went ahead and broke the story two hours before the NYT did.

What was the NYT “breaking story?” Turns out it is not so “breaking” as it actually happened nearly thirty years ago. Urbina describes the controversy around a well drilled in Jackson County, West Virginia in 1982. The claim, backed up by old reproductions of completion reports, is that hydraulic fracturing caused the contamination a well 600 feet away on the property of James Parsons.  

Three hours later, Energy in Depth published a rebuttal to the piece. For one thing, EWG’s lawyer, Dusty Horwitt’s own statements actually betrayed a much more “measured tone” in regard to his certainty on whether or not hydraulic fracturing actually caused the water contamination:

In one section (page 8) [Dusty Horwitt admits] that “it is unclear” how fluids could have accessed the well. In another section (page 13), EWG concedes that the West Virginia-based laboratory commissioned to investigate WV-17 “did not conclude that hydraulic fracturing caused the contamination …” And in its press release, EWG admits that “it is possible that another stage of the drilling process [and not hydraulic fracturing] caused the problem.”

Also, Energy in Depth notes, Urbina relies on testimony from “well-known oil and gas opponent” Carla Greathouse, who wrote the 1987 EPA report  in question that characterized the 1982 contamination as resulting from hydraulic fracturing.  Although one of Greathouse’s openly stated goals of the report was actually to cause more EPA regulation of drilling, Energy in Depth discovered that the EPA arrived at “precisely the opposite conclusion” in its 1988 report to Congress. Please click here to read the full Energy in Depth rebuttal.

Lee Fuller of IPAA and Energy in Depth, who wrote his own rebuttal in the Washington Examiner, stated:

“We’re talking about a technology that’s been deployed more than 1.2 million times in more than 25 states over the course of more than 60 years. I think it says an awful lot about fracturing’s record of safety that the best these guys could come up with after studying the issue for an entire year is a single, disputed case from 30 years ago that state regulators at the time believe had nothing to do with fracturing. Three decades later, the technology today is better than it’s ever been, the regulations are broader and more stringent, and the imperative of getting this right, so that we can take full advantage of the historic opportunities made possible by shale, has never been more apparent. Despite the Times’ best efforts, this story does not prove that hydraulic fracturing had anything to do with the contamination of a water well 30 years ago.”

So is this really even a story? It seems to be based (as usual) on speculation and wishful thinking on the part of EWG and the NYT.  Once again, Energy in Depth’s reporting proves to be more substantial than the New York Times. Energy in Depth relies on facts, figures, and testimony of leading industry and government officials which state that there is no found causation between hydraulic fracturing and well contamination. New York Times relies on outspoken, radical opponents of shale, rumors, and speculation—and sure, an outdated 1987 report rife with rumors and a clear agenda thrown in there.

Clearly, the maps bear a striking resemblance to each other which identifies the positive correlation that petroleum consumption has on the growth of a state’s economy. In other words, a greater level of petroleum consumption is an integral part of a productive economy. An industrial manufacturing sector cannot exist without the fuel of petroleum to power the process. Plastic, lubricants, asphalt, rubber and many other finished products are also not possible without the value-adding substance of petroleum. To understand more about the consumption-economic growth correlation, please read the entire analysis.

Our economists highlighted this telling fact: Out of the top ten petroleum producing states, nine of them have unemployment rates below the national average.

Where do independents fit into this picture? Independent oil and natural gas producers are the “leaders in the exploration and production of domestic petroleum, which makes this economic development possible in the United States.” Without independents, the supply of American petroleum would be crippled. Without abundant petroleum, economic growth is stunted. When economic growth is stunted, American jobs are lost.

Petroleum powers the economy of this nation overall, evidenced by this strong correlation between states that have high petroleum use and high output. Petroleum is integral in our daily lives, not just as a fuel, but because it is present in common objects that are crucial to living a high-quality life.

After months of contested debate that pushed the United States economy to the brink of default, President Obama signed the bill to raise the debt ceiling into law. The bill, crafted by House Speaker John Boehner, was passed by the House on Monday night with a bipartisan vote of 269-161 and passed by the Senate today with a bipartisan vote of 74-26.

Absent in the bill were any provisions which increased taxes on the oil and gas industry which would have resulted in a loss of industry investment—which inevitably means a loss of jobs, decreased government revenues, and diminished energy security.

IPAA President and CEO Barry Russell sent a letter to Congressional leadership asking them to oppose any provisions with tax increases on the industry. In it, he highlighted the role of independent producers as job creators and explained the adverse consequences of the tax increases:

“Two key issues that affect independent producers relate to drilling costs and percentage depletion. These are neither loopholes nor subsidies. They are mechanism—like depreciation that provide for capital recovery. Independent producers historically have reinvested as much as 150 percent of their American cash flow back into new American projects. Changes that limit this capital will affect the 4 million jobs associated with just America’s independent onshore investments.”

The resistance against any tax provisions on the industry was picked up by legislators like Democratic Rep. Gene Green (TX-9) and his colleagues, who sent a letter urging House leadership to oppose any bill which, through eliminating the “capital necessary to continue drilling new wells” would  “put thousands of these jobs in jeopardy, deepen our nation’s dependence on unstable regions of the world, and hamper our economic recovery.” Read IPAA’s economic analysis to learn how repeal of the historic tax structure would adversely affect the industry and devastate the economy.

Although the battle has been won, the administration’s war on oil continues. Part of the debt compromise includes the creation of a bipartisan commission, appointed by Congressional leadership. This commission will have to work together to make greater deficit reductions by late November. In his initial comments upon signing the debt compromise, President Obama spoke of a “balanced approach” in which “everything is on the table.” What the President meant by “everything,” was made very clear the next moment when he specified that the balanced approach must include “getting rid of taxpayer subsidies to oil and gas companies.” President Obama is still unabashedly intent on singling out of the oil and gas industry for tax hikes would continue—and he hopes the commission will be the perfect means to do so.

Jay Carney, the president’s press secretary, also made similar remarks in his press conference commenting that when finding 1.2 trillion more in deficit cuts as legislated through the deal, we must ask “oil and gas companies…[to] share in the sacrifice.”

The American economy scored a victory when tax increases on the industry were left out of the deficit bill. However, the administration’s rhetoric shows that the industry is not in the clear. Undoubtedly, Democratic legislators on the commission will seek to raise taxes on oil and gas companies as part of a larger assault on the industry. What America needs right now are jobs, energy supply, and energy security. What America doesn’t need is a tax hike on the industry—which would absolutely result in an increase on the debt through decreased revenues to government coffers.

On Monday, the House passed the North American Made Energy Security (NAMES) Act by a vote of 279 to 147. The bill, H.R. 1938, requires the President, through the Secretary of Energy to make a final decision on whether or not to approve TransCanada Corp.’s proposed Keystone XL pipeline, which would run from Canada to Texas, by a deadline of November 1.

The administration said that the legislation is unnecessary because the State Department is set to decide on the Keystone Pipeline by the end of the year, The Hill reported. However, proponents of the bill have pointed to the fact that TransCanada Corp has spent years waiting for the permit to be approved. The company filed its permit application with the State Department in 2008.

On the floor Republican Congressman Bill Flores of Texas expressed his support of the bill:  “Every additional barrel that can be produced here in North America is one fewer barrel that we need to import from the Middle East.”

Rep. Flores is absolutely right—we must continue to work to increase our energy security through insulating ourselves from political pressures from Middle Eastern countries. However, the importance of drilling in our abundant reserves in America is top priority as well.

The votes came down along party lines, with most Republicans voting in favor of it, and most Democrats voting against. The bill, authored by Republican Representative Lee Terry (NE-2) will go to the Senate, where it has an uncertain future.

Today, IPAA set a frame of reference around the weekly economic analyses that our economists are working on through the Declaration of Independents initiative. In the press release, IPAA outlined the growing need to underscore the domestic and global importance of petroleum, both as a main commodity and as an economic and political player in the international arena.

Our economists emphasized:

“Petroleum is a major driver in making America’s Gross Domestic Product almost a quarter (~23 percent) of the world total. Petroleum is our largest consumed fuel, approximating almost 37 percent of our total demand (2010). One only has to look at China and India to see how this fuel is playing a larger role in developing countries. Between 2000 and 2010, China’s oil demand almost doubled adding 4.2 million barrels per day. India added more than 1 million barrels per day over the same timeframe. Non-OECD countries demand added 12.5 million barrels per day. The impact of this fuel on society is global, national and local and data will help illustrate the many faceted perspective of this fuel.”

They also highlighted the role of independents as key players in unlocking new petroleum reserves in America:

“For a time, it appeared that future reserves were to be found internationally or in deeper waters offshore in addition to the known reserves in areas such as the Arctic National Wildlife Refuge (ANWR). New and old onshore plays are now helping the U.S. reverse its liquids decline, and IPAA will spotlight this trend that has accompanied the shale natural gas revolution.”

In sum, the IPAA economic team explained the need to demonstrate these trends with data that showcases how these activities will affect production, oil imports, and job creation across the country. To view oil production statistics and learn more about the “data behind the analysis,” please read the full analysis.

Last night, President Obama made a special televised address to the nation to discuss the debt ceiling negotiations. And, yep, he attacked oil companies…again.

“Most Americans, regardless of political party, don’t understand how we can ask a senior citizen to pay more for her Medicare before we ask corporate jet owners and oil companies to give up tax breaks that other companies don’t get.”

This is not the first time (or the last—you can count on it) that the President has made oil companies a main target in the debt ceiling debate.

June 29, Press Conference: “And… if we choose to keep tax breaks for oil and gas companies that are making hundreds of billions of dollars, then that means we’ve got to cut some kids off from getting a college scholarship… I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up a tax break that no other business enjoys.  I don’t think that’s real radical.”

June 16, Weekly address: “I don’t think oil companies should keep getting special tax breaks when they’re making tens of billions in profits.”

April 26, Letter to Congress: “One of those steps [to address rising gas prices] is to eliminate unwarranted tax breaks to the oil and gas industry and invest that revenue into clean energy to reduce our dependence on foreign oil.”

Although the President claims that oil and gas companies receive “tax breaks that no other business enjoys,” this is simply not true. The industry experiences deductions for ordinary and necessary business expenses that all industries enjoy. Click here for the entire in-depth analysis of the oil and gas industry tax structure.

Seemingly, it wouldn’t be a presidential speech for President Obama unless he was demonizing the oil and gas industry. This is the same industry that supports 9.2 million jobs in the United States. This number should appear familiar to President Obama, as 9.2 percent is the current unemployment rate. In fact, the oil and gas industry is to thank for 7.5 percent of U.S. GDP. The activities of independent oil and gas companies specifically supported 4 million of those jobs and contributed 4 percent to the nation’s GDP.

There is no way that President Obama is unaware of these numbers. In fact, I am sure he has more than one economic advisor pointing to states like North Dakota and Oklahoma, which have respective unemployment rates of 3.2% and 5.3%, and rely heavily on the oil and gas industry. There is clearly something else at play here—many would argue an ideological opposition to the industry. This is unacceptable: Our nation desperately needs a boost in jobs and economic growth and the oil and gas industry is a key to this growth. In the midst of increasing turbulence in the Middle East, our country desperately needs energy security. Tapping into our own abundant reserves of energy here at home is a crucial part of insulating ourselves from the political pressures of these countries.

Even at the small chance that President Obama is demonizing and targeting oil companies without full knowledge of the potential economic devastation of his actions, ignorance does not equal innocence—especially not if you are the President of the United States.

In this blog, there has been a lot well-deserved frustration directed at BOEMRE—the Bureau of Ocean Energy Management, Regulation, and Enforcement—and so it continues.

A new IHS report entitled “Restarting ‘the Engine’ — Securing American Jobs, Investment and Energy Security” revealed that since the Gulf of Mexico moratorium imposed by the Obama administration was lifted last year, there has been a significant slowdown in drilling permit approvals. When the report says significant slowdown, it means significant slowdown. The study found that the number of pending plans submitted to BOEMRE increased by a whopping 90 percent from previous levels before the spill. Exploration and development plan approvals are down by more than 85 percent.

America’s oil and natural gas companies are more than willing to comply with regulations. But after jumping through hoops for the administration, endless delays that keep people from getting back to work in the Gulf is unacceptable. Although the administration frames this as “careful consideration” for safety since the spill, the administration should instead focus on “careful consideration” for the livelihoods of the people of the Gulf of Mexico.

It’s not too late. The study, commissioned by the Gulf Economic Survival Team (GEST), found that a pro-active administration approach could work amazing economic benefits for the region that would also resound across America. For example, 230,000 American jobs could be created in 2012 alone if BOEMRE expedites the permitting process to allow a return to drilling in the Gulf. This would add more than $44 billion in US GDP—not a minor boost to our struggling economy.

The “economic engine” of the Gulf of Mexico, is not totaled, but simply “stalled.” The backlog in permits indicates that the industry is ready to rev up the economic benefits of the region. If the industry is allowed to really get back to work in the Gulf, the economic benefits will ripple across the country. It’s time for BOEMRE to stop stalling the Gulf of Mexico.

To read more key findings of the study, please click here.

Here’s the breakdown:

Onshore lower 48 crude oil production accounted for the largest increase among these broad categories, up more than 11 percent or nearly 340,000 barrels per day.

Offshore lower 48 accounted for the next largest increase in liquids production, up nearly 260,000 barrels per day or more than 18 percent over the three-year period.

NGPL production gains added another 200,000 barrels per day to domestic liquids supplies, an increase of more than 11 percent to well over 2 million barrels per day.

Alaskan crude oil output losses were substantial with a decrease of more than 150,000 barrels per day since 2008 first quarter.

Despite the offsetting decline in Alaska due to bureaucratic hold up on permits on land and infrastructure needed for drilling, IPAA found there was a substantial increase over the past three years for lower 48 crude oil and U.S. NGPLs. This comparison, which demonstrates that the first quarter of 2011 is even more promising than that of 2008, proves that there is no lack of energy abundance in the United States. This is all contrary to what resource scarcity alarmists would have you believe, of course.

Not only is tapping this energy abundance critical to U.S. jobs and economic well-being, but it has massive foreign policy implications. IPAA found that if that new production (the amount by which 2011:Q1 exceeds 2008:Q1) “had been sourced instead from some new foreign country, that volume would have ranked among the top ten U.S. petroleum import sources.”

The impact of independents on this increased supply is enormous:
Onshore, they account for nearly 65 percent of lower 48 crude oil output. Offshore, in the Gulf of Mexico, independents are the largest shareholder in 81 percent of producing oil and gas leases, operate over half of the developing and producing deepwater fields, and account for about 30 percent of all offshore crude oil production.  As for NGPL increase, independents have played a leading role here also, taking natural gas production to its highest level in 40 years. To learn more about the impact of independents and see the complete breakdown, please read the complete analysis of the breakdown of U.S. Liquids Production by quarter from Q1 of 2008 to Q1 2011.

Clearly, any way the pie is cut, independents serve as the sweet, substantial filling in these increases of domestic energy supplies.

If you are an American with a TV, chances are you or your parents recall this infamous question that kept 83 million viewers spellbound as they waited for the answer for six long months of 1980—catapulting the television series, “Dallas,” to pop-culture stardom. Although I won’t spoil the show by repeating the answer (as if you’ve forgotten), I will say J.R. Ewing was not the only one “shot” by the drama-soap that ran for over ten years.

“Dallas” covered the twists and turns of the Ewings, the well-established Texan oil family with plenty o’ money and plenty o’ skeletons in their closet. J.R. was the CEO of the independent company, Ewing Oil, and was notorious for his obsession with maximizing his profits and defeating his rivals at any cost.

J.R. was the quintessential villain that fans of the show loved to hate. He was power-hungry, corrupt, and unfaithful to his wife. He lived a life of manipulation in which he used the people in his life (especially his righteous brother Bobby) as mere means to the end of a fatter bank account.

While these are all perfect traits for a soap opera villain, it unfortunately warped how people perceived the independent oil industry. It was as if the public unconsciously projected the avarice of J.R. and the Ewing family onto the industry. It created this idea that the industry itself was somehow inherently greedy—as if J.R. was an accurate representation of the real people working in the oil industry. The independents’ image was damaged—“shot”— if you will, by the show’s representation of corrupt Ewing Oil.

When the creators of the show made a television movie reunion special in 1996, IPAA took the lead in setting the record on independent oil companies straight. IPAA recruited former “Dallas” actress Susan Howard to speak on behalf of independents in a commercial that aired during the television movie event. She asked fans to separate fact from fiction and emphasized that people working in the independent oil industry are ordinary Americans. With the help of sponsors, the industry commercial was shown in nearly 25 media markets around the country and received national media attention.

Now, fifteen years later, the TNT television network has officially given the green light for a brand new “Dallas” series set to air next summer. It will chronicle the “new generation” of the Ewing family. Actors Josh Henderson and Jesse Metcalfe (both from “Desperate Housewives”) have been cast as J.R. and Bobby’s sons. Never fear, three of the original actors are back, including Larry Hagman, who played J.R. Ewing.

There is no harm in watching the show for entertainment. But it’s just that—entertainment. The public needs to keep in mind IPAA’s 1996 message: Separate fact from fiction. The average independent producer employs eleven people. Let’s not get carried away and let the fictional “Dallas” characters distort our understanding of the American independent oil industry.

For the real facts on the American independent oil industry, please visit our Declaration of Independents site.

The truth is that the current tax structure ensures the competition and innovation of the American oil and gas industry. Revising this historic tax structure would increase the taxes on oil and natural gas companies. This will not only hurt the industry, but cost the country. IPAA, through its new Declaration of Independents initiative, decided it was time to get the facts straight:

FACT: Fossil fuels account for 78 percent of American energy production, and receive 13 percent of tax incentives.

FACT: Renewable energy sources account for 11 percent of American energy production, and receive 77 percent of tax incentives.

IPAA fleshed out the nuances:

Productivity: The oil and gas industry is productive – the industry is not being propped up by “so-called” subsidies that it receives.

Impact to Independents: Changing the tax structure will directly and negatively impact America’s independent producers – who drill 94 percent of the wells in the United States – and the overall productivity of the industry by reducing jobs and diminishing investments.

High Risk: The current tax policy reflects the high-risk activity of exploration and production and the producers’ challenge to find productive resources, as well as its capital intensity, i.e. intangible drilling costs.

Competitive: The current tax structure enables small, independent companies to compete, especially in marginal well activity, i.e. percentage depletion.

Clearly, the oil and gas industry is a productive industry which receives deductions for normal business expenses due to the high risk and expensive nature of exploration and drilling. Although people protest they just want to end the tax breaks to “Big Oil,” ending these deductions would actually diminish the smaller companies’ ability to compete with the larger oil companies. Click here for the entire in-depth analysis of the oil and gas industry tax structure.

On Monday, IPAA President & CEO Barry Russell sent a letter to Congressional leaders regarding the ongoing debt ceiling negotiations—explaining the impact repealing these normal business deductions on American oil and gas production would have on the nation. Because the independent oil and natural gas industry is vital to job creation, energy independence, investment, and infrastructure in our country, slamming the industry with increased taxes would undoubtedly damage the country. 

Every time the talking heads in Washington complain about oil “subsidies” and “loopholes,” they demonstrate their ignorance on wellheads—and the issues facing the industry. Policymakers need to educate themselves on the purpose of this tax policy before our country gets hurt by legislative overhaul of this historic tax structure.

Two studies were released this week that demonstrated the enormous potential of the oil and gas industry in the United States—if burdensome regulations are kept from limiting the industry.

The Quest Offshore study, commissioned by the American Petroleum Institute and the National Ocean Industries Association (NOIA), revealed that as many as 190,000 jobs will be created over the next two years if the industry bounces back from the steep decline in activity in the Gulf of Mexico after the oil spill.  Thank the Obama administration’s moratorium for the decline which halted offshore drilling in its tracks. Even after the moratorium was lifted, the administration slowed down the permitting process, making it extremely difficult for companies to put their drills—and their employees—back to work.

The report concluded that offshore oil and gas activity in the Gulf of Mexico could support 320,000 jobs in Texas, Louisiana, Mississippi and Alabama by 2013, if spending on capital and operating expenditures rises from $24.2 billion in 2010 to $42.4 billion in 2013.

However, these jobs and this level of investment will only occur if and only if the permitting process is streamlined—made simpler and faster. Right now, companies are stuck in the red tape of the Bureau of Ocean Energy Management, Regulation, and Enforcement’s (BOEMRE) federal agency for many months to even years. Randall Luthi, of NOIA, said absolutely that “the current pace of permit reviews and approvals will just not get us there.”

The second report, commissioned by the Western Energy Alliance, studied the impact of onshore drilling in the West. Due to technological progress that has “opened the door to a century’s worth of new oil and natural gas” in the West, the ICF international study found that the industry is projected to increase investment in the West by $58 billion annually by 2020—and could support 504,120 jobs in that region.

The study revealed that these investments could generate 1.3 million barrels of domestic oil production a day and has the potential to produce 6.2 trillion cubic feet of natural gas per year by 2020. Combining these oil and natural gas estimates, the supply from the West alone is projected to produce more energy per day than total U.S. imports from Saudi Arabia, Venezuela, Iraq, Kuwait, Colombia, Algeria, Nigeria, and Russia. These are incredible numbers which prove that the key to energy security comes is unlocking our energy reserves here at home.

These two studies report great news for the industry and for our country. However, IPAA cannot stress enough that this great supply of domestic energy, this investment in our economy, and these jobs are all contingent upon avoiding “misguided government action” which threatens American energy viability.

On Friday, Lee Fuller, Vice President of Government Relations at IPAA, testified before the House Natural Resources and Agriculture Committees regarding proposed regulations on the George Washington (GW) National Forest. The regulation option addressed at the hearing would prohibit horizontal drilling and associated hydraulic fracturing in the forest due to “water concerns.” One of these concerns includes the fear propagated by anti-industry groups that hydraulic fracturing could poison the water supply. No such case has ever been recorded.

The Forest Service and the Bureau of Land Management (BLM) also claimed that the water used in horizontal drilling would take away from the water needed by the forest. However, as Fuller pointed out, horizontal drilling and hydraulic fracturing have “allow[ed] for prolific development” in natural gas production. In fact, horizontal drilling actually decreases the amount of vertical wells that need to be drilled, decreasing the amount of water used in production overall.

On the other side, Natural Resources Defense Council’s (NRDC) Amy Mall praised the “caution” of the administration. She repeated that there is “limited scientific knowledge” and that “many uncertainties remain” about the effects of horizontal drilling on the environment. In response, Congressman Fleming of Louisiana pointed out that because of horizontal drilling’s huge economic benefits and the absence of environmental harm, the burden is then on environmental groups to give evidence to the contrary.

The committees relied on Fuller’s background as a petroleum engineer to explain the technology behind horizontal drilling. He refuted claims that hydraulic fracturing leads to methane contamination in drinking water. Fuller explained that although methane contamination can occur naturally (non-oil and gas sources) or from wells, there has been no case of contamination occurring from the process of hydraulic fracturing. He reminded the committees that there is “always going to be skepticism” about new technologies, but the industry’s technical guidance standards and the state’s regulations sufficiently address environmental safety concerns.

Maureen Matsen, Virginia’s deputy director of natural resources, testified that the proposed ban would “harm Virginia, and Virginians, by burdening business and preventing job growth.” She agreed with Fuller that the ban is unjustified and “without any tangible benefit that we can see beyond what is already accomplished by our well-established regulation of natural gas development.”

Lee stated in his testimony that the proposed ban “presents a far larger issue—the reluctance of the current Administration to support the development of the full spectrum of American resources.”

To view a further breakdown of Amy Mall’s claims versus Lee Fuller’s claims, please see IPAA’s Friday Fact Check.

For the first time in 20 years, US domestic petroleum supplies have been increasing, while petroleum imports have been declining. This may be surprising to many people, especially because resource scarcity alarmists try to insinuate that our own domestic supply is running out and that it is useless to drill for more oil at home.

IPAA revealed yesterday that over just two years, from 2008 to 2010, “domestic crude oil production rose more than 11 percent and production of natural gas plant liquids rose by more than 12 percent.” This is a tremendous increase of domestic supplies— 800,000 barrels per day! As the press release notes, the increases in domestic production have “contributed nearly half of the decline in petroleum imports of 1.7 million barrels per day over that two year period.”

This is due in large part to the leading role of independents that increased drilling in the Bakken, Permian, Eagle Ford, and offshore areas. In fact, independents drill 95% of America’s oil and gas wells, and provide more than 4 million U.S. jobs.

This may be bad news for oil rich countries’ dictators like Hugo Chavez, who uses the fact that Venezuela is the fourth-highest exporter of oil to the US as leverage in foreign policy dealings with us. However, it’s good news for America—both economically and politically. Not only does increased domestic production of oil create jobs for Americans, it reduces our nation’s dependence on countries that export their oil to us—countries that are often hostile to our way of life.

Although these numbers are encouraging, there is still a long way to go if we want to become energy independent. Drilling at home is a practical and profitable way to insulate us from political pressures relating to demand for oil.

Note: IPAA has been highlighting the contribution of independents to the domestic petroleum industry through its new initiative—Declaration of Independents. In order to illustrate how macroeconomic and global issues affect the microeconomic and domestic economy, as well as the independent producer, IPAA will be increasing its analysis of both global and domestic petroleum. Take a look at the new website—oilindependents.org for more information.

After great anticipation, Governor Andrew Cuomo announced late last week that he will open up New York for natural gas drilling, effectively lifting the ban that was instated last year by Governor David Paterson.

This announcement came in conjunction with the New York Department of Environmental Conservation’s (DEC) recommendations to permit hydraulic fracturing across the state’s Southern Tier—the region where the resource-rich Marcellus Shale extends into New York. The DEC would prohibit hydraulic fracturing on public land and in the New York City and Syracuse watersheds. Joe Martens, the DEC commissioner, announced that hydraulic fracturing “can be done safely with all the precautions we’ve built into the process.” Cuomo emphasized that the DEC’s decision was “based on rigorous testing, research, facts and science, not politics or ideology on the issue.”

New York has much to gain from hydraulic fracturing, and virtually nothing to lose. Fears exacerbated by environmental groups about poisoned drinking wells have turned out to be baseless. In a recent report, the Manhattan Institute, a non-profit state-based research think tank, calculated that an end to the NY moratorium would spur over $11.4 billion in economic input in New York, would create between 15,000 and 18,000 jobs in the Southern Tier and Western New York, and would allow state and local governments to reap in $1.4 billion in tax revenues. In this tough economy, where New York is struggling not least of all, ending the moratorium is the right move for the people of New York.

Just as the New York victory for natural gas was announced last week, state legislatures in New Jersey voted to ban hydraulic fracturing. Although New Jersey produces no natural gas, this vote must be taken seriously because it could have rippling effect across other natural gas producing states.

IPAA’s Lee fuller, writing on behalf of Energy in Depth, sent a letter to Governor Chris Christie, explaining the industry’s opposition to it and urging him to veto it. “While a statewide ban on this technology is not likely to have a material impact on development activities in your state, it could be used by opponents of affordable, reliable energy as a tool to push for implementing similarly destructive, ill- informed moratoria in other states.” Attached to the letter was the Energy in Depth fact sheet, outlining many state regulators’ positions on hydraulic fracturing.

Hopefully Governor Christie, like Governor Cuomo, recognizes the importance of hydraulic fracturing and will stop this symbolic attack in its tracks.

Although Obama’s rhetoric is designed to paint the industry as opposed to health care and education, America isn’t buying it.

On Wednesday, Rasmussen released national poll results which found 75% majority of likely voters feel the US should do more in developing domestic oil and gas resources. On the flip side, only 19% of Americans polled by telephone believe the US is doing enough.

In fact, far from being against children and the elderly, oil and gas producers actually play a huge role in supporting the kind of economy in which college educations and healthcare for the elderly are even possible. According to IPAA-commissioned IHS report, independent producers supported almost 4 million jobs in 2010, accounting for over 3% of US jobs. The independents’ business ecosystem contributed $579 billion—or 4% of total US GDP in 2010.

Not least of all, increased domestic production makes us less dependent on the turbulent, often-hostile Middle Eastern countries that currently supply a majority of our oil—and it gives our government greater ability to protect our way of life. The poll also revealed that only 38% of likely voters think the US is even somewhat likely to reduce its dependence on foreign oil by the year 2025, a goal set by Obama himself earlier this year.

This should be a wakeup call to the Obama administration.

Within 36 hours, IPAA, who manages the Energy in Depth (EID) industry coalition , delivered two rounds of rebuttals and exposed the truth behind the NYT fabrications.

BIASED: Ian Urbina is the same author of the February 2011 attack on the industry, in which he tried to strike unfounded fear in the minds of the public by claiming that hydraulic fracturing fluid is polluting drinking water in the Marcellus Shale. IPAA with Energy in Depth immediately created a fact check. Far from being a credible and independent report, this article was “essentially outsourced to a well-known critic of the industry” Art Berman, who has even had backtrack on his dismal projections of shale plays when they were proven to be wrong.

UNDERHANDED:  What Urbina doesn’t tell you, and what Energy In Depth exposes, is that the vast majority of emails are between people working for obscure companies that have neither expertise nor credibility in analyzing upstream oil and natural gas. His “financial experts” include Deborah Rogers, whose resume (he neglects telling readers) includes actively trying to ban industry efforts of hydraulic fracturing. The fact that Urbina tries to project Enron or Ponzi-scheme illegal activity on the natural gas industry is underhanded and unfounded.

MISLEADING: Urbina painted the natural gas industry as being optimistic without basis about the returns of shale plays in America. Although all business ventures include uncertainties about investments and return, the fact is, the oil and gas industry is indeed optimistic, precisely because we have experience and expertise on our side. EID reported that “according to data from IHS Global Insight and UBS, daily production of natural gas in the Barnett Shale has more than doubled over the past four years, even as the number of rigs operating in the play has decreased by 60 percent. In Arkansas, the Fayetteville Shale now delivers more than 2.5 billion cubic feet of natural gas per day, even with 40 percent fewer rigs in service as compared to the summer of 2008.” Furthermore, EID points out that Urbina is almost completely silent on the greatest shale play—the Marcellus—perhaps because of the wealth of information available about how abundant Marcellus is.

These are only a few examples. Please click here to read what government, industry, and financial experts have been saying about the NYT article and the great production potential of shale gas in America.

Consumer Energy Alliance (CEA) unveiled a new publication today— Energy, Jobs and the Economy: Powering America’s Future—which demonstrates the crucial role that domestic energy production plays in creating jobs, stabilizing energy prices, and improving our economy.

The publication provides a closer look on how energy policy can have unintended consequences on not only the energy industry, but on many other sectors of the economy. It highlights fifteen different industry perspectives including the American Trucking Association, National Association of Manufacturers, American Chemistry Council, and 60 Plus Association (American retirees).

IPAA contributed a chapter which addresses how regulations and legislative initiatives affect the independent oil and natural gas producers in America. IPAA highlights the importance of independent oil and natural producers to the energy industry and to the economy as a whole. IPAA includes a graph which visualizes the fact that onshore and offshore independents produce 54% of America’s oil and 85% of America’s natural gas.  Independents also are technological leaders of the industry—they have paved the way for the rest of the E&P sector in opening up shale plays that offer vast reserves of natural gas. In relation to the greater economy, IPAA demonstrates how independents “stand ready to jump start a stagnant American economy” in the form of jobs and revenues, if and only if our nation develops an energy policy which avoids crushing regulations and punitive legislation that pull the plug on economic development. 

Consumer Energy Alliance, a non-profit organization made up of 139 affiliated organizations and thousands of grassroots supporters, encourages dialogue between domestic industries and American consumers in order to promote pro-growth energy policy and stable prices for consumers.

Acclaimed Democrat strategist Donna Brazile praises the industry and offers her support during IPAA's 2011 Midyear Meeting.

IPAA was proud to host another successful Midyear Meeting this week in Florida. More than 300 IPAA members and their families joined IPAA staff and leadership for the two day event that included a full slate of meetings, presentations, and networking opportunities.

The meeting, held on Amelia Island, began on Monday with an IPAA Board of Directors meeting and a co-operating association meeting. Both meetings provided informative updates on the latest issues surrounding the industry, with the co-operating association meeting focusing on regional level regulatory concerns and how the national regulatory environment and structure is playing on state level concerns.

Highlights from this week also included entertainment from comedian Vic Henley, an economic outlook presentation from Dr. Robert Genetski, and a special keynote luncheon address given by political strategist and commentator Donna Brazile. The meeting also featured panels on the profile of the independent producer, a production optimization discussion, and finally a “View from the Street” look at commodity prices, supply and demand.

Department of Energy announced yesterday that it will release 30 million barrels of oil from the U.S. Strategic Petroleum Reserve (SPR)—a record amount—in order to respond to the supply disruption in Libya. Not surprisingly, the administration emphasized the international effort of nations in the International Energy Agency to add 60 million barrels this month to the international supply. The United States is contributing half of this effort from our emergency supply of oil—which has only been tapped twice before during the international crisis of the Persian Gulf War in 1991 and after the domestic crisis of Hurricane Katrina in 2005 (because many oil platforms were damaged in the Gulf).

Many have raised their eyebrows at the political motives of this short-sighted approach by the administration—an approach which ignores our long-term energy independence needs. Senator Lindsey Graham pointedly asked, “What’s the emergency? Poll numbers?”

IPAA released a statement in which President and CEO Barry Russell criticized the administration’s move and offered a real plan for energy independence.

“Today’s action is 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.”

Click here to read our press release to learn more about IPAA’s position on the Administration’s decision.

Researchers at Oklahoma City University released a new economic study, commissioned by the Oklahoma Energy Resources Board (OERB) which showed that the Oklahoma oil and gas industry provides 300,000 jobs and accounts for almost 1/3 of the state’s GDP.

Lieutenant Governor Todd Lamb pointed to the state’s business-friendly policies as a huge benefit to the industry, which in turn, provides for a far more economically developed Oklahoma. The revenue that the state receives from the oil industry reached almost $1 billion over the past three years and largely supports Oklahoma’s infrastructure and education.

The study found that the industry has an employment growth of 46.2% since 2002 and that 71,224 Oklahomans are directly employed by drilling and production sectors of the industry.

Russell Evans, the leading director of the institute that produced the study, emphasized that although Oklahoma has not been immune to recession realities, oil remains the cornerstone of the economy as a state heavily influenced by commodity markets. However, the industry has actually already added 1/3 of the jobs it lost by the recession.

Other studies have also demonstrated the boon of the oil and natural gas industry on our economy. The API-commissioned PwC study demonstrates that the oil and natural gas industry’s operations directly and indirectly contributed to an incredible 14.1% of total jobs in Oklahoma. The IPAA-commissioned IHS report specifically emphasizes the impact of independents on the US economy, which drill close to 94% of America’s oil and natural gas wells.

Oklahoma comes in at number six for oil production in the United States and comes in at number three for natural gas. It produces 3.5% of total U.S. oil production.

NNE’s President Mike John addressed the council and stressed that the company has taken efforts to not only comply with the state’s regulations in receiving a permit from the Department of Environmental Protection, but has even accommodated the additional requests of the Morgantown Utility Board, which provides the drinking water for the region. He also asked whether the city would compensate him for the $7 million he invested in its site, based upon good faith interactions with the city.

Only Councilman Charles Byrer voted against the ban. He believes the city will be “regretting this down the road” because of the “slippery slope” from a legal perspective and because of the huge amount of jobs and economic benefits that could have been gained from extracting shale gas outside of the city.

Leibowitz clarified that this investigation is separate from and would not fall under Eric Holder’s newly-created Oil and Gas Price Fraud Working Group (but that the FTC would be sure to assist in that as well).

This FTC announcement came in the form of a letter to Democratic Senator John Rockefeller of West Virginia, who requested this investigation in March along with two other Democratic Senators: Maria Cantwell of Washington and Mark Pryor of Arkansas, and Republican Senator Olympia Snow of Maine. Senator Rockefeller expressed his concern that he is “not convinced that these prices increases were necessary or reflected true market conditions” such as high demand, disruption in the Middle East, or perhaps the federal government’s attempts to limit domestic companies’ access to American reserves.

Although Pennsylvania has never taxed production at the wellhead, the state legislature has proposed an impact tax of $40,000/well, which has the potential to limit job creation.  Travis Windle of the Marcellus Shale Coalition promised that the industry is “squarely committed to ensuring that proposed policies relating to fees and revenues do not create an uncompetitive climate for economic activity and job growth in the commonwealth.”

Chris Tucker, a spokesman for Energy-in-Depth, praised Pennsylvanians for recognizing the enormous economic benefits of American shale gas development, which is “creating tens of thousands of good-paying jobs at a time when they’re most needed, while helping to stabilize energy prices for struggling consumers.”

Energy-in-Depth, an initiative of IPAA, is a coalition of America’s independent natural gas and oil producers.

The new 2011 benchmark study reported that the upstream industry’s spending level more than doubled from $72.8 billion in 2009 to $177.9 billion in 2010. E&Y’s confidence in the industry is particularly based on the fact that the upstream reinvestment rate reached an outstanding 170% in 2010, the highest in five years.

This study has been released on the heels of the IPAA-commissioned IHS report, which found that onshore independents drill 94% of the nation’s onshore wells, accounting for 3% of the total U.S. workforce and 4% of total U.S. GDP.

Morning Energy News – May 31, 2011

You smell that?  Oil son, nothing else in the world smells like that.  The smell, you know that gasoline smell.  Smells like…victory.  Someday this war (on affordable energy) is gonna end Anchorage Daily News (5/29/11) reports: Robert Duvall won’t be on board the ship that offloads Escopeta Oil’s jack-up rig this week but he will be making a trip north once the company starts drilling for oil and natural gas in Alaska’s Cook Inlet… A long-time friend of Houston-based Escopeta President Danny Davis, the well-known actor and director is a staunch supporter of domestic oil and gas drilling…”Alaska’s got plenty of oil and gas that we need down here,” Duvall said in an interview Thursday with Petroleum News. “It’s preferable to importing energy from foreign sources, such as the Middle East.”…Duvall would have been on board the vessel that is bringing the Spartan 151 jack-up rig into Cook Inlet, but he’s about to start work on an independent film, “Jayne Mansfield’s Car,” directed by Billy Bob Thornton…However, Duvall plans to visit the offshore rig once it starts drilling.

Game changer: new oil shale deposit in Texas could be large enough to power Al Gore’s homes, jets, and the rest of America for over 100 years New York Times (5/27/11) reports: Until last year, the 17-mile stretch of road between this forsaken South Texas village and the county seat of Carrizo Springs was a patchwork of derelict gasoline stations and rusting warehouses… Now the region is in the hottest new oil play in the country, with giant oil terminals and sprawling RV parks replacing fields of mesquite. More than a dozen companies plan to drill up to 3,000 wells around here in the next 12 months…The Texas field, known as the Eagle Ford, is just one of about 20 new onshore oil fields that advocates say could collectively increase the nation’s oil output by 25 percent within a decade — without the dangers of drilling in the deep waters of the Gulf of Mexico or the delicate coastal areas off Alaska… There is only one catch: the oil from the Eagle Ford and similar fields of tightly packed rock can be extracted only by using hydraulic fracturing, a method that uses a high-pressure mix of water, sand and hazardous chemicals to blast through the rocks to release the oil inside.
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Can’t stop, won’t stop — Gov. Chris Christie continues to save his state by removing taxpayer funded green energy rabbit holes New York Times (5/30/11) reports: Running for governor in 2009, Chris Christie vowed to become “New Jersey’s No. 1 clean-energy advocate.” That was a hollow promise. As governor, Mr. Christie proceeded to cut all the money for the Office of Climate and Energy. He raided $158 million from the clean energy fund, meant for alternative energy investments, and spent it on general programs. He withdrew the state from an important lawsuit against electric utilities to reduce emissions… On Thursday, he took the worst step of all: He abandoned the 10-state initiative in the Northeast that uses a cap-and-trade system to lower carbon-dioxide emissions from power plants. The program has been remarkably successful, a model of vision and fortitude. Lacking that, Mr. Christie has given in to the corporate and Tea Party interests that revile all forms of cap and trade, letting down the other nine states trying to fight climate change…The system works by requiring utilities to either lower their emissions or buy allowances to pollute. Money from the allowances goes to states for clean-energy programs. Since it began in 2008, the system has created more than $700 million for these programs; New Jersey has spent some of its share on helping cities become more energy-efficient. Greenhouse emissions from power plants in the region went down about 12 percent from 2008 to 2010 for many reasons, including lower natural gas prices. Programs like the regional initiative are estimated to have produced more than 10 percent of that decline.
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Sooner or later these cities are going to run out of other people’s money for their green dreams Bloomberg (5/31/11) reports: Cities from Los Angeles to Johannesburg are changing street lights, insulating buildings and promoting cycling to slash carbon emissions as envoys at United Nations talks bicker about binding greenhouse-gas goals…“While national governments continue their excruciatingly frustrating dialog on climate change, we in the cities are acting,” Portland Mayor Sam Adams said in an interview. “It’s sheer common sense. Becoming more efficient with your city’s energy needs means you’re also more economically secure.”…Wracked with budget deficits and economies recovering from recession, municipal leaders are looking for cheap ways to curb energy consumption and help governments meet pollution targets. General Electric Co. (GE) and Siemens AG (SIE), which make power generation equipment, and energy management tool-makers Johnson Controls Inc. and Honeywell International Inc. (HON) are winning contracts from cities to work on efficiency projects.

One two punch: first, Chrysler makes a come back with SUV’s and now a revolutionary gas powered engine with better gas mileage than Chevy Volt at a third of the price Forbes (5/27/11) reports: Everybody wants to talk about what kind of alternative vehicle we’ll be driving next, but I’ve got news for you: the traditional internal combustion gasoline engine isn’t going anywhere. In fact, this 125-year-old invention is getting more efficient all the time, which means we might not have to seriously contemplate those other possibilities any time soon…Automakers have been achieving incremental improvements in the efficiency of their conventional engines with new technologies like direct-injection, six-speed transmissions, turbo-chargers and start-stop systems. With the government breathing down their neck, you can bet they’ll continue to do so. As the U.S. Department of Energy’s fuel economy website shows, each one of these technologies can improve your fuel economy by 5% to 13%. Put them together in a vehicle like the 2011 Ford Explorer and you’re talking about some meaningful improvements…And then there are promising innovations like the gasoline-powered Scuderi engine, whose developer is reporting some massive leaps in fuel economy, at least in laboratory tests. A recent computer simulation conducted by the Southwest Research Institute found that a turbocharged version of the Scuderi split-cycle, air hybrid engine boosted the fuel economy of a 2011 Nissan Sentra by 54%, to about 50 miles per gallon.

AEA’s Tom Pyle sends a clear message to those who have lost their way — no new subsidies E&E News (5/24/11) reports: The political battle over legislation that would offer tax incentives to promote natural gas vehicles is heating up, as supporters launch an ad campaign and conservative critics of the bill in a public letter yesterday chided co-sponsors for backing the “misguided” plan…The new jockeying over the “NAT GAS Act” suggests that its 186 House supporters in both parties could struggle to win a vote on the bill during the pre-August window that sponsors once eyed. What’s more, the emergence among the bill’s foes of the American Energy Alliance — a pro-drilling nonprofit with ties to the oil industry — signals the potential for stronger pushback in the future from oil companies…AEA President Thomas Pyle, previously a lobbyist for Koch Industries and aide to ex-House Majority Leader Tom DeLay (R-Texas), joined 16 other groups yesterday on a letter to lawmakers that blasted the natural gas bill as a wasteful subsidy…The letter’s signatories, including the Club for Growth, the Heritage Foundation’s separate political arm, and the tea party group Americans for Prosperity, warned that backing the bill would amount to shrugging off voter opposition to subsidies that became clear in the midterm elections…”Co-sponsoring this misguided legislation is a sign that you have not heard the message [of 2010] and are not serious about eliminating expensive, counter-productive energy subsidies,” the groups wrote.

Morning Energy News – May 23, 2011

Now let’s see if we can use the tax code to remove Secretary Salazar’s tax deductions and revoke his license to drive The Hill (5/23/11) reports: “Every day, Interior’s policies are costing more Gulf energy workers their jobs. But the Interior secretary needs a raise? That’s ridiculous – it’s offensive,” Mr. Vitter said in a statement to The Washington Times. “I’ll do everything I can to block his raise until Gulf energy workers are at least where they were in terms of work and job security pre-BP. I really want to see new deepwater exploratory permits being issued at pre-BP levels over a three-month period.”… hanks to a constitutional quirk, Interior Secretary Kenneth L. Salazar makes less than most of his colleagues in President Obama’s Cabinet, and a Republican senator says he’ll keep it that way, blocking a nearly $20,000 raise for the high-level appointee until the administration approves more deep-water oil drilling…Mr. Salazar’s salary is set at $180,100, which is $19,600 less than most other Cabinet secretaries. The Constitution prohibits legislators from taking positions in the executive branch for which they voted to raise the salaries, and since Mr. Salazar approved secretaries’ pay levels when he was in the Senate, he would have been barred from taking the Interior job unless the salary was reduced to its earlier level…His Senate term would have expired in January, though which means he’s once again eligible for the higher pay rate…Senate Majority Leader Harry Reid, Nevada Democrat, tried to get consent this week to pass the change in the Senate but was blocked by Sen. David Vitter, a Louisiana Republican who said he won’t yield until Mr. Salazar approves more oil and gas exploration in the Gulf of Mexico. 

You know your state has problems when a San Francisco judge is the voice of economic reason Bloomberg (5/23/11) reports: A California judge’s ruling is unlikely to mean a long delay in starting the state’s cap-and- trade program for greenhouse gases next year, according to Bloomberg New Energy Finance…The decision will require California’s Air Resources Board to resubmit its analysis of alternative policies, which will take “a couple of months,” Tom Marcello, an analyst for New Energy Finance in New York, said yesterday by e-mail. Another ruling might have slowed the launch of what is forecast to be the largest U.S. carbon market by six months, he said…Superior Court Judge Ernest Goldsmith in San Francisco ordered the board on May 20 to stop making rules for cap and trade until the state reviews other ways to limit greenhouse gases, such as a carbon tax. While President Barack Obama failed to win Congressional approval for a national emissions trading program, California is pressing ahead with plans to issue pollution allowances that may be valued at $19 billion by 2020, according to New Energy Finance…The board in California will appeal the ruling today, said Stanley Young, a spokesman for the agency.
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The NYT editorial board doesn’t understand economics or history. Oil prices fell $9 as President Bush announced the end of the moratorium on the OCS New York Times (5/20/11) reports: The closer one looks at what passes for serious debate in Washington over energy, the more depressing it gets. The Republicans have nothing to offer but drill, baby, drill. The Democrats are rightly trying to end industry’s cushy tax breaks, but that’s not an energy strategy… And everyone, including President Obama, seems more interested in scoring political points over rising gas prices than in confronting complex matters like energy security and climate change…In the Senate, the two parties spent this week beating each other up without advancing the discussion. The Republicans and three oil-state Democrats blocked a worthy Democratic attempt to strip the five biggest oil companies of $2 billion in tax breaks they do not need. The Democrats then crushed an effort by Mitch McConnell, the Republican leader, to match two outrageous measures passed by the House that would expedite lease sales in protected coastal waters while undermining safety reforms adopted after the oil spill in the Gulf of Mexico…Mr. McConnell said his bill would bring relief at the pump by raising domestic output. That is fiction. Production will take years to come online and even then would have a tiny impact on prices set on the world market.
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The next time someone says that central banking and inflation do not impact the price of crude oil, send them this article Reuters (5/23/11) reports: North Sea Brent crude futures led the oil complex lower, trading down $2.91 at $109.48 a barrel by 1029 GMT, having dropped by $3.26 earlier…U.S. crude was trading $2.63 lower at $97.46…”The ratings cut for Italy and concern over Greek restructuring and the subsequent euro weakness appear to have prompted the price fall in crude this morning,” Mark Thomas, head of energy Europe with brokerage Marex Financial, said…The dollar rose against the euro as a block of bad news about the euro zone crisis hit the single currency…Fitch Ratings cut Greece’s debt rating by three notches on Friday, pushing the country’s debt deeper into junk status, and rival Standard & Poor’s cut its outlook for Italy to “negative” from “stable” on Saturday….The euro fell below $1.40 briefly, the level which had been seen as an important support…Olivier Jakob with Petromatrix said the euro would remain the key focus for global investors…”Crude oil has not been able to find any follow-through buying over the last ten days and without new fundamental developments it is likely to be harder to find strong fresh buying into crude oil if the Euro weakens further,” Jakob said.
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And next time President Obama tells you that increasing supply does not affect prices, send him this article Wall Street Journal (5/23/11) reports: The natural-gas industry touts its fuel as an attractive alternative to coal and oil, saying it’s comparably clean, domestically abundant and cheap…But that final selling point might not last if the industry succeeds in stirring demand even as it cuts back on drilling…In the past few years, a glut of natural gas has driven down the price to half the 2008 average—a level where it costs a U.S. consumer $2.75 a day to meet a home’s natural-gas needs, according to the American Gas Association. That’s good news for consumers, but a recent study by consultancy Wood Mackenzie found that 40% of U.S. natural gas produced last year didn’t meet break-even prices for producers…Natural gas now costs roughly the same as its energy equivalent in coal and a quarter of its energy equivalent in oil. The gas industry is making some headway in capitalizing on its relative cheapness: President Barack Obama has endorsed incentives for trucks powered by natural gas, and power companies are considering replacing coal-fired plants with gas-burning ones…Those steps would increase natural-gas consumption just as production growth is likely to slow. That’s because companies now can make more money drilling for oil, whose price has soared last year and in recent months on unrest in Northern Africa and the Middle East.
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Too little too late Senator Hutchison, but I guess I do appreciate the tough talk as you head for the exit The Hill (5/23/11) reports: A week after President Obama laid out a plan designed to show his administration is serious about expanding domestic drilling, a top Senate Republican said the administration is not doing enough to encourage production…“It is not enough for the president to talk about producing energy in America,” Sen. Kay Bailey Hutchison (Texas) said in the Republican weekly address. “We call on him to put policies in place that cut the bureaucratic red tape and put Americans to work doing it.”…Hutchison’s comments underscore the bitter partisan divides between Democrats and Republicans on drilling and the major hurdles policymakers face in coming to a compromise on the issue.
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We remind people that, as Hunter Thompson once wrote, only the doomed argue with Chris Tucker E&E News (5/20/11) reports: “If the story here is that EPA didn’t like that decision, that it wasn’t supportive of Congress clearly delineating where its authority ended and the states’ authority began, then here’s another story for you: The sun rose today,” said Chris Tucker, spokesman for Energy in Depth, which was created by the Independent Petroleum…Association of America to fend off federal regulation of fracturing. The U.S. EPA official who oversaw the George W. Bush administration’s 2004 study of hydraulic fracturing says its conclusions about safety have been exaggerated for years….The study found that in certain circumstances, fracturing presented “little or no threat” to drinking water. But Ben Grumbles, who ran EPA’s Office of Water, says the study didn’t deem all “fracking” to be safe, and it didn’t justify exempting all forms of it from drinking water protections….”EPA, however never intended for the report to be interpreted as a perpetual clean bill of health for fracking or to justify a broad statutory exemption from any future regulation under the Safe Drinking Water Act,” Grumbles wrote in an article this week for the nonprofit he now runs, the Clean Water America Alliance…The former assistant EPA administrator also says that after five years and a nationwide surge in drilling, it might be time to take another look at the exemption, which was included in a 2005 energy bill…”A lot has happened since 2005 and, in my view, it makes sense to review the Safe Drinking Water Act landscape as well as the relevance of Clean Water Act programs,” he said

The UK didn’t meet their CO2 reduction target for 2010, even with the recession. So what’s their response? Double down New York Times (5/16/11) reports: Britain is poised to announce some of the world’s most ambitious goals for reducing greenhouse gas emissions — a striking example of a government committing to big environmental initiatives while also pursuing austerity measures… Chris Huhne, the secretary of state for energy and climate change, is expected to release a statement on Tuesday that the British government will set in law a goal to cut its greenhouse gas emissions about 50 percent by 2025…That reduction, based on 1990 levels, would be far deeper than the European Union’s goal of cutting emissions 20 percent by 2020, and it would mean that Britain would make faster emissions cuts than other similar size countries, including Germany. The goal could require households to spend on new energy-saving devices for the home. It could also revive stalled government support for large projects, like those that capture power from tides and that bury carbon dioxide emissions…A spokesman for the Department of Energy and Climate Change declined to comment before a formal announcement….Governments in Britain and North America have broadly retreated from far-reaching pledges since the financial crisis began two years ago.

We can’t tell if Reilly is grasping at the lime light or really cares about his job New York Times (5/17/11) reports: The Obama administration is pushing back against plans by its oil spill commission co-chairman to spread his message about offshore drilling reforms to Cuba, the panel leader said today… William Reilly, the co-chairman of the presidential panel that made a series of recommendations earlier this year to improve offshore drilling safety and regulation after the BP PLC oil spill in the Gulf of Mexico last summer, has already helped convinced Mexican drilling regulators to adopt U.S. regulatory structures…But he said he has had his “wrist slapped” by the Obama administration for his plans to discuss reform with Cuba, with which the United States has had no diplomatic relations since 1961…”I have been causing grief to the State Department,” Reilly, a former U.S. EPA chief under President George H.W. Bush, said during an event hosted by Resources for the Future in Washington, D.C…Cuba is developing plans to drill 16 oil and gas wells in waters 50 miles from Key West, Fla., using Spanish oil and gas giant Repsol YPF and Russian natural gas producer Gazprom.
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The plan worked: Obama was able to talk a tough game knowing the Senate wouldn’t actively make gas prices higher by increasing taxes The Hill (5/17/11) reports: The White House is vowing a continued campaign to repeal billions of dollars worth of oil industry tax breaks after a Democratic bill to nix several incentives sputtered on the Senate floor Tuesday…White House Press Secretary Jay Carney, in a statement Tuesday night, called the 52-48 Senate vote that blocked the bill progress even though 60 supporters were needed to advance the measure….“The vote today – with support from over half the U.S. Senate – is an important step towards repealing these unwarranted subsidies for the oil and gas industry. The Administration will continue to pursue this important reform,” he said…Senate Democratic leadership is vowing to keep the issue alive in wider talks with Republicans and the White House on deficit reduction…Carney also took a shot at Republicans in his statement on the procedural vote, which saw two Republicans vote to advance the bill while three Democrats joined 45 Republicans in voting against it.
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If you think Bromwich is losing it now, just wait until the Senate discovers he’s behind skyrocketing gas prices! The Hill (5/17/11) reports: Four Senate Democrats this week asked the Federal Trade Commission (FTC) to investigate whether U.S. oil refineries are purposefully cutting back capacity levels in order to keep gasoline prices high…Sens. Claire McCaskill (D-Mo.), Charles Schumer (D-N.Y.), Dick Durbin (D-Ill.) and Patty Murray (D-Wash.) cited press reports that this may be happening and told FTC Chairman Jon Leibowitz that this would be a “direct affront” to American consumers… “At a time when major refiners and oil companies are making record profits and American families continue to struggle with gasoline at record prices, the idea that refiners may be manipulating the market to keep prices artificially high is offensive,” they wrote…”It is incumbent upon the Commission to ensure that the American people are protected from this type of manipulation,” the letter continued. “Accordingly, we request that the Commission open a full investigation into these allegations of wrongdoing and to determine the impact this behavior, if confirmed, has on regional and national gasoline prices.”

Morning Energy News – May 17, 2011

Governor Mitch Daniels puts Indiana on the road to serfdom Renewable Energy World (5/11/11) reports: AWEA applauded Indiana Gov. Mitch Daniels for signing into law a voluntary Clean Energy Portfolio Standard (CPS), which sets a goal of 10 percent of the state’s electric generation to come from clean energy sources by 2025 and incentivizes utilities to participate in the CPS…“I applaud the Indiana Legislature and Governor Daniels for setting a course toward more affordable, homegrown Hoosier energy,” said Denise Bode, CEO of the American Wind Energy Association (AWEA). “In particular, I would like to thank the bill’s author, State Sen. Bev Gard, as well as Speaker of the House Brian Bosma for his guidance, Sen. Brandt Hershman, the Senate leadership, and Rep. David Frizzell, for supporting the economic development that this bill will foster in Indiana.”…The bill, SB 251, encourages investment in the state’s growing wind industry as well as other forms of lower-emission energy, including solar, nuclear, clean coal, and hydro. It reflects an amendment offered in the Indiana House by Frizzell (R-Indianapolis) that calls for at least 50 percent of the qualifying energy obtained by Indiana utilities participating in the CPS to come from within the state. The House passed the amended bill on a bipartisan vote of 62-34 on April 21, and the Senate passed the bill by a 31-19 bipartisan vote on April 26. 

Fracking Lies — new study out reports that drinking water is safe in Marcellus Shale region Fuel Fix (5/16/11) reports: Several tests of western Pennsylvania river water prompted by fears of contamination from the state’s rapidly growing natural gas drilling industry didn’t turn up elevated or harmful levels of radioactivity or other pollutants not routinely monitored, a private water utility said Monday…The Pennsylvania American Water Co. said its tests showed that its water quality complies with federal and states standards…Water for one set of tests was drawn from Pennsylvania American’s intakes along the Allegheny, Clarion and Monongahela rivers and Two Lick Creek, which serve the cities of Pittsburgh, Clarion, Kittanning and Indiana. In addition, Pennsylvania American said it found the same result after testing treated drinking water at three plants in late March. Two of the plants serve Pittsburgh, while the third serves Clarion…State regulators have previously said that tests from samples they collected in November through February of water downriver from western Pennsylvania treatment plants raised no red flags for radioactivity. The treatment plants have been handling wastewater from drilling in the vast Marcellus Shale natural gas reservoir – a practice that is scheduled to end this week because of concerns over how it could affect drinking water.
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Americans are demanding more energy and the U.S. Government is helping Brazil and India U.S. Department of Energy (5/16/11) reports: As part of the Partnership to Advance Clean Energy announced by President Obama and Prime Minister Singh of India last November, the Department of Energy has committed $25 million over the next five years to support the U.S.-India Joint Clean Energy Research and Development Center (JCERDC)…This first-of-a-kind effort is a key component of the U.S. and India’s commitment to improve energy access and promote low-carbon growth by facilitating joint research and development of clean energy technologies. Teams of scientists and engineers from the U.S. and India will initially focus on research in three priority areas – building energy efficiency, second-generation biofuels and solar energy…”Developing and investing in new technologies is a key component to meeting the goals of a clean energy future,” said Secretary of Energy Steven Chu. “This innovative approach to collaborative research is a testament to the special relationship shared by the two countries. By working with our partners in India and sharing a strong commitment to building a clean energy economy, we can get further, faster, than by working alone.”
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This is almost poetic justice — solar farm can’t pay property taxes even with a 45 cent kilowatt hour tax payer subsidy Michigan Live (5/16/11) reports: Producing 225,592 kilowatt hours of electricity in its first year of operation, a solar farm in eastern Kalamazoo Coun­ty that went online in early 2010 has exceeded expectations…Also exceeding expecta­tions is the property tax, said Sam Field, a Kalamazoo attor­ney and one of the owners of Kalamazoo Solar…The $27,689 tax bill for the Charleston Township prop­erty means that the owners are losing money, even when being paid a premium price of 45 cents a kilowatt hour by Consumers Energy, he said…“That Michigan property tax burden works out to a cost of 12.3 cents per kilowatt hour,” Field said. “That amount is more than the retail value of the electricity.”…For comparison, Field re­searched the property tax for the Palisades Nuclear Plant in Covert Township along Lake Michigan. He found that the annual real and personal property taxes for Palisades are just over $12 million or .2 cents per kilowatt hour.
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This article is for those who doubt the Federal Reserve play a role in oil markets Fuel Fix (5/16/11) reports: Attempts by the Federal Reserve Board and the Obama administration to head off an economic collapse in 2008 have resulted in a jump in gasoline pump prices of 56 cents per gallon, Rep. Kevin Brady, R-The Woodlands, said today…Brady, the top House Republican on the congressional Joint Economic Committee, released a study that looked at the economic costs to average Americans of the massive infusion of dollars into the U.S. economy by the Fed designed to stimulate the economy and stave of a national economic catastrophe as the U.S. financial system teetered on the brink of collapse…“Americans are paying a steep price at the pump as a result of the weak dollar policies pursued by this administration and the Federal Reserve”, said Brady…The study, entitled The Price of Oil and the Value of the Dollar, states that the value of the U.S. dollar has declined by 14 percent since the Fed began its program formally known as “quantitative easing” (also called “QE1″) in November of 2008, as the financial system neared meltdown.

On Wednesday, Senate Majority Leader Harry Reid (D-NV) plans to hold a test vote on legislation that would increase taxes on the five largest oil companies by $21 billion over the next decade. The bill still has little chance to pass in the Senate, and even less if it made it to the House.

Meanwhile, the Senate Energy and Natural Resources Committee will begin to hear testimony on four offshore drilling bills.

The first two pieces of legislation under consideration were introduced last week by committee Chairman Jeff Bingaman (D-NM) and would impose additional safety standards and boost loan guarantees for a planned Alaska natural-gas pipeline. The third bill would extend offshore leases for one year, and a fourth would establish an offshore leasing coordination office in Alaska.

The committee also plans to hear testimony on more than two additional dozen energy bills throughout the week.

Senate Minority Leader Mitch McConnell (R-Ky.) said Sunday that Republicans won’t discuss nixing tax breaks for major oil companies as part of fiscal reform talks with Vice President Joe Biden. 

“That’s not the kind of thing we’re going to be dealing with here in connection with the serious talks that are going on with the Vice President’s group,” McConnell said on CNN’s “State of the Union.”

Biden and a bipartisan group of Capitol Hill lawmakers are in talks aimed at striking a deal on deficit reduction. The discussions come ahead of a looming deadline this summer for an agreement between the Obama administration and Congress to raise the nation’s debt ceiling.

hmm...

On Saturday, President Barack Obama announced his intention to expand U.S. oil and natural gas production in Alaska and the Gulf of Mexico.

Obama has repeatedly called for a reduction in U.S. oil consumption and expansion of renewable energy sources and their development… and has also expressed limited encouragement for American oil and natural gas production, though his administration has been slow to move forward with such intentions. Under pressure from Republicans and in the face of a staggering rise in U.S. gas prices, the President sought to pacify all sides in his weekly radio address.

“I am directing the Department of Interior to conduct annual lease sales in Alaska’s National Petroleum Reserve, while respecting sensitive areas, and to speed up the evaluation of oil and gas resources in the mid and south Atlantic,” Obama said. “I believe that we should expand oil production in America — even as we increase safety and environmental standards.”

And though some Republicans in Congress praised the President’s words, not everyone was impressed.

“One weekend address announcing minor policy tinkering, while positive, does not erase the Administration’s long job-destroying record of locking-up America’s energy resources,” said Doc Hastings (R-WA), chairman of the House Natural Resources Committee.

Meanwhile, the administration’s reach for “clean” energy policy appeasement might be stalling, as Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) said it’s now unclear whether the White House plan to mandate a doubling of electricity from low-carbon sources like renewables and nuclear power will have enough votes to clear the panel.

The President is seeking a “clean energy standard” under which collective utilities would supply 80 percent of their power from low-emissions sources by 2035.

“We are trying to figure out if we can put together a draft piece of legislation that can get enough votes to be seriously considered in our committee,” said Bingaman over the weekend. “We don’t have the answer to that yet, but we are trying in a conscientious way to get to something that would achieve the kind of objective the president laid out.”

offshore field trip!

The U.S. House of Representatives is in recess this week. But with oil and natural gas issues still a top policy issue in Washington, Republican leadership from the House Energy and Commerce Committee will be on tour in the Gulf Coast this week, working to make the case for expanded offshore oil and natural gas production.

Rep. Steve Scalise (R-LA) is leading the group that will include House Energy and Commerce Committee Chairman Fred Upton (R-MI), Energy and Environment subcommittee Chairman Ed Whitfield (R-KY) and Reps. Gene Green (D-TX), Steve Womack (R-AR) and Steven Palazzo (R-MS).

The lawmakers will tour New Orleans and southern Louisiana Wednesday through Friday and are scheduled to meet with offshore drilling workers and visit an offshore platform as a part of their schedule.

The trip will allow “members of Congress from around the country to get a first-hand view of the technology and innovation involved in exploring for energy safely in the deep water,” Scalise said in a statement.

Morning Energy News – May 16, 2011

A moment of clarity from the USA Today — it’s time to end all subsides, simplify the tax code, and lower tax rates for everyone USA Today (5/16/11) reports: Not surprisingly, the oil industry is grumbling. “A vindictive money grab,” is how the head of the American Petroleum Institute sums up the effort…In truth, it is all of those things, but mostly it is an example of the sort of political gamesmanship that substitutes for serious deficit reduction…The $20 billion is real money worth saving, but it is just 1/200th of the $4 trillion that is widely seen as the minimum that needs to be found over the next 10 years…Earlier this spring, Republicans indulged in their own game of Trivial Pursuit, cutting some minor agencies, such as public broadcasting, that weren’t contributing much to the deficit but which they didn’t much like. Now Democrats are saying, in effect, two can play at that game. They are trying to force Republicans to take the side of an industry about as popular as the flu. With gasoline at $4 a gallon, it’s an easy target…But the initiative is also government at its arbitrary worst, further complicating the tax code by singling out five companies — ExxonMobil, Chevron, ConocoPhillips, Shell and BP — for special taxes not paid by smaller energy concerns, or by similar companies in other industries. 

Senator Bingaman plans on making sausage…err energy policy with Senator Menendez C-Span (5/15/11) reports: As gas prices reach $4 and higher in many parts of the country, Congress is debating several bills related to the oil industry and efforts to curb spending…Sen. Jeff Bingaman (D-NM) gives his thoughts on a bill sponsored by his colleague, Sen. Menendez (D-NJ), to repeal tax breaks and subsidies for large oil companies…Senate Majority Leader Harry Reid (D-NV) is currently in negotiations to bring the bill to the Senate floor for a vote. However, it’s met opposition from Republicans and some Democrats. Sens. Landrieu (D-LA), and Begich (D-AK), who represent energy-producing states, have come out against the bill…The House is also focused on energy legislation. This past week the Republican leadership passed three drilling-related bills which differ from the Senate agenda. The legislation aims to expedite approvals of oil drilling permits, reverse President Obama’s imposed moratorium on deepwater drilling in the Outer Continental Shelf and to set a national goal for oil and gas production.
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Obama says not to worry, more oil production is on the way —I’m still worried New York Times (5/16/11) reports: President Obama, facing voter anger over high gasoline prices and complaints from Republicans and business leaders that his policies are restricting the development of domestic energy resources, announced Saturday that he was taking several steps to speed oil and gas drilling on public lands and waters… It was at least a partial concession to his critics at a time when consumers are paying near-record prices at the gas pump. The Republican-led House passed three bills in the last 10 days that would significantly expand and accelerate oil development in the United States, saying the administration was driving up gas prices and preventing job creation with antidrilling policies…Administration officials said the president’s announcement, which included plans for expanded drilling in Alaska and the prospect of new exploration off the Atlantic coast, was intended in part to answer those arguments, signal flexibility and demonstrate his commitment to reducing oil imports by increasing domestic production…But in fact the policies announced Saturday would not have an immediate effect on supply or prices, nor would they quickly open any new areas to drilling.
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Here’s why I’m worried: the number of rigs actively exploring for new oil is down Fuel Fix (5/13/11) reports: The number of rigs actively exploring for oil and natural gas in the U.S. decreased by six this week to 1,830…Houston-based Baker Hughes Inc. reported Friday that 947 rigs were exploring for oil and 874 for gas. Nine were listed as miscellaneous. A year ago, the count was 1,506…Of the major oil- and gas-producing states, New Mexico gained two rigs while Alaska, North Dakota, Texas and West Virginia each gained one…Arkansas, Oklahoma and Pennsylvania each lost two rigs and Louisiana lost one. California, Colorado and Wyoming were unchanged…The rig count peaked at 4,530 in 1981, the height of the oil boom. The record low of 488 was in 1999.
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I’m not the only one worried — Rep. Upton and Rep. Whitfield are heading down to the Gulf The Hill (5/13/11) reports:  The House Energy and Commerce Committee’s GOP leadership will visit the Gulf of Mexico next week to in a trip aimed at making the case for expanded offshore oil-and-gas development…Chairman Fred Upton (R-Mich.) and Rep. Ed Whitfield (R-Ky.) — his top lieutenant on energy — will be in Louisiana Wednesday through Friday on a tour led by Rep. Steve Scalise (R-La.)…A Scalise aide said the trip will include meetings with energy industry officials Wednesday, a day-long visit Thursday to a Chevron Corp. deepwater drilling platform, and a Friday boat tour of the Louisiana coast…“This is a way to get members down so they can see Louisiana because it is truly America’s energy coast,” said Scalise spokesman Stephen Bell. He said the tour of the Chevron facility is aimed at reviewing the infrastructure and technology that companies are using to drill with safeguards in deep waters.
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We might need to dam up enviros’ tears with this news — hydro power works and developing countries can’t get enough New York Times (5/15/11) reports: Hydropower, a renewable energy source often overshadowed by excitement about wind and solar power, is enjoying something of a global resurgence…Huge, controversial dam projects have recently made headlines in Brazil, Chile and Laos. Many developing countries, hungry for energy to supply their growing economies over the long term, are determined to keep building more modest-sized dams too…Record amounts of hydropower capacity came online in 2008 and 2009, the most recent years for which data are available, according to Richard Taylor, executive director of the International Hydropower Association in London…“There has been, over the last decade, a dramatic increase in the deployment of new hydropower capacity,” Mr. Taylor said.

Morning Energy News – May 12, 2011

Only numbers I trust coming out of DC are the mile markers on I-95 — new report says increasing tax will not affect gas prices New York Times (5/11/11) reports: Senate Democrats have a new weapon in their escalating oil and gasoline war with Republicans, though some party members are none too happy with their leadership’s offensive against the major oil companies…Trying to counter Republican claims that ending some tax breaks for the five largest oil companies would ultimately hurt consumers, Democrats are now armed with a Congressional Research Service report that predicts a negligible impact on the price of gasoline if the changes are carried out…The document, sent to Senator Harry Reid, the Nevada Democrat and majority leader, said that with the cost of oil over $100 per barrel, “prices are well in excess of costs, and a small increase in taxes would be less likely to reduce oil output, and hence increase petroleum product (gasoline) prices.”…In a review of the five specific tax changes being advocated by Democrats, the research service also said that tightening the tax code would make a very small dent in the huge revenues of the industry and that the price of oil hinged on many other, larger considerations.

The oil tax increase was summed up by Sen. Landrieu in a word — “laughable” The Hill Sen. Mary Landrieu (D-La.) called the Democratic plan to scrap tax breaks for the big five oil producers to pay down the deficit “laughable” and derided states that complain about gas prices while producing no energy themselves…“I see what our states produce and these people produce nothing, or virtually nothing — and you ask me can I vote for a bill like this?” asked Landrieu from Senate the floor on Wednesday, comparing the major energy-producing states with non-energy producing states…“No,” said Landrieu, answering her own question. “Not only can I not vote for it. It’s laughable.”…The Democrats’ plan, which may come to the floor this week, was authored by Sen. Robert Menendez (D-N.J.). It would require oil companies to pay taxes for drilling on federal land and remove tax deductions for companies that drill in foreign countries. In all, it would raise about $20 billion, which would be directed toward deficit reduction….Louisiana is one of the highest energy-producing states in the nation and Landrieu argued that the Gulf’s oil industry would be adversely affected by the scrapping of the tax incentives.
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Hallelujah! A permit for deep water exploration has been approved Wall Street Journal (5/11/11) reports: The U.S. approved a Royal Dutch Shell PLC plan to drill for oil in five locations deep under the Gulf of Mexico…The Shell proposal is the second deep-water exploration plan approved in the Gulf since the U.S. government lifted a moratorium on deep-water drilling in October. The moratorium was imposed following the BP PLC oil spill in April 2010. At least six other deep-water plans are pending for the Gulf…Companies apply for permits to drill after receiving approval for an exploration plan…The Shell plan approved Wednesday, for the so-called Appomattox discovery, includes five wells in about 7,200 feet of water roughly 72 miles, or 116 kilometers, off the Louisiana coast. Shell runs the Appomattox venture and holds an 80% stake. Nexen Inc. holds the remaining 20%…U.S. regulators assessed the plan and determined it met new safety standards instituted after the Gulf oil spill last year. The drilling “would not have a significant impact on the quality of the human environment,” according to a press release from the Bureau of Ocean Energy Management, Regulation, and Enforcement…Marvin Odum, president of Shell’s U.S. subsidiary, said the company was “pleased” with the news.
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Get ‘er done! House passes a bill that will force Dept. of Interior to act on permit applications within 60 days New York Times (5/11/11) reports: Maneuvering on oil drilling, gas prices and industry profits intensified on Capitol Hill on Wednesday. House Republicans pushed through a bill to accelerate offshore oil and gas exploration as Democrats vowed action on measures to rescind billions of dollars in tax breaks for major oil and gas companies… The drilling bill was approved 263 to 163, with 28 Democrats joining unanimous Republicans, after the majority swatted down several Democratic amendments. The bill would force the Interior Department to act within 60 days on all applications for offshore drilling permits. The House then turned to a second Republican-sponsored bill that would open much of the Atlantic, Pacific and Arctic shorelines to new oil and gas exploration. A vote on that measure is expected Thursday…The Obama administration vigorously opposed both measures, but stopped short of threatening to veto them — in part because it is highly unlikely they will win enough votes in the Senate to overcome a filibuster…Meanwhile, House and Senate Democrats continued their push to repeal a variety of tax breaks enjoyed by the oil industry, some of them a century old and others that apply to all companies, not just petroleum concerns.
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My favorite part?  “Four Republicans crossed the aisle to vote for the earlier motion to remain in the program.”  Because what is the point of owning a plantation if you don’t have house slaves? E&E News (5/11/11) reports: The New Hampshire Senate voted today to keep the state in the Regional Greenhouse Gas Initiative, a cap-and-trade program that many member states are trying to align with U.S. EPA’s new standards for carbon dioxide from the power sector…Earlier this year, the New Hampshire House of Representatives passed a bill that would withdraw the state from the program, which includes all of New England as well as New York, New Jersey, Delaware and Maryland. But the bill had drawn a veto threat from Gov. John Lynch (D), and the Senate lacked the votes to overcome it…An amendment approved today would tweak rather than scrap the program, though it would allow New Hampshire to pull out if another state with at least 10 percent of the RGGI program’s total power generation does it first. Introduced by Senate Majority Leader Jeb Bradley (R), it would also shift money to a fund that offers efficiency incentives and would provide rebates to ratepayers for all but the first $1 that is paid for each carbon credit…Though a motion to withdraw from RGGI had 15 supporters in the Senate today, it fell one vote shy of the number needed to rebuff a veto.
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What’s $90 million between friends? Uncle Sam provides guarantee for Colorado solar project Businessweek (5/11/11) reports: Energy Department officials say a North Carolina energy producer has been offered a $90.6 million conditional commitment loan guarantee to help construct a solar generation project in southern Colorado…Department officials said Tuesday the loan will support Charlotte-based Cogentrix Energy LLC in developing the Alamosa Solar Generating Project. The company estimates the project will generate about 85 construction and operations jobs…U.S. Sen. Mark Udall of Colorado says the plant will be one of the largest and most innovative solar power plants in the country. The facility will create about 75,000 megawatt hours of renewable energy per year, enough for more than 6,500 homes

Obama’s campaign slogan for 2012: “Resistance is Futile” Fuel Fix (5/10/11) reports:  A federal judge has given the Obama administration 30 days to act on six permits for deep water drilling in the Gulf of Mexico…U.S. District Judge Martin Feldman on Tuesday ruled on a lawsuit filed by Ensco Offshore Co. and others. He rejected Interior Department arguments that the issue was moot because it already has resumed issuing permits following the moratorium that was imposed last year after the massive BP oil spill….Three permit applications in the original lawsuit have been granted…But Feldman said the government’s issuing of what he called “a scant few applications” does not provide the certainty Ensco needs to conduct its business in the Gulf. He said the law required the six remaining Ensco-related applications to be acted on within a reasonable period.

How do you kill the golden goose?  Choke him slowly while convincing people Slug Pate is better for them Wall Street Journal (5/10/11) reports: When the famed Trans Alaska Pipeline carried two million barrels of oil a day, the naturally warm crude surged 800 miles to the Port of Valdez in three days and arrived at a temperature of about 100 degrees…Now, dwindling oil production along Alaska’s northern edge means the pipeline carries less than one-third the volume it once did—and the crude takes five times as long to get to its destination…That leisurely flow means the oil is above ground longer and more exposed to Alaska’s frigid weather; the crude sometimes arrives chilled to 40 degrees. As the flow and temperature continue to drop, experts say the risks of a clog or corrosion increase, as do the odds of ruptures and spills.

IER’s Tom Pyle explains how an anti-energy plan comes together  Washington Examiner (5/11/11) reports: In response to high gas prices, President Obama is seeking a solution to a problem of his own making. After filling his administration with anti-energy activists, energy prices are skyrocketing and Americans are being squeezed at the pump…Meanwhile, Capitol Hill Democrats including Sens. Max Baucus of Montana and Robert Menendez of New Jersey are pushing for legislation to end tax deductions for the five largest oil companies, a purely political move that will do little to increase the energy supply or deliver gas price relief…None of this should be surprising. Obama’s secretary of energy, Stephen Chu, once said Washington needs to “figure out how to boost the price of gasoline to the levels in Europe,” where prices are above $8 per gallon….And while a Democratic senator from Colorado, Secretary of Interior Ken Salazar promised in 2008 to vote against drilling for oil in the Outer Continental Shelf — even if gasoline prices reached $10 per gallon…In addition to its rhetoric, the administration’s anti-energy agenda is well-documented. Since taking control of the White House, Obama has kept 97 percent of federal offshore areas and 94 percent of federal onshore areas, all of it owned by taxpayers, off-limits to energy production.

Liar, liar pants on fire! We all know that revenue increases have historically fed government programs and have not paid down existing outlays The Hill (5/10/11) reports: Leading Senate Democrats have coalesced around a political strategy in their uphill battle to repeal billions of dollars in oil industry tax breaks: Make it all about the deficit…Caucus leaders and several politically vulnerable members unveiled legislation Tuesday that would repeal $21 billion worth of tax breaks over a decade for the largest oil companies… All the savings would be steered toward deficit reduction, which Democrats made their top talking point as they baited GOP foes on nixing the incentives…“If you are serious about deficit reduction and you say Big Oil’s tax breaks are off limits, how serious can you be?” said Sen. Charles Schumer (N.Y.), a key strategist for Senate Democrats.
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Given gas prices, we hope that Obama is over at GM finishing his design for the mini hybrid in time for America’s past time, the summer road trip Wall Street Journal (5/10/11) reports: Gasoline this summer will cost less than previously expected after last week’s selloff in oil futures, but Americans will still pay far more at the pump this year than last, according to the U.S. Department of Energy…A gallon of regular gasoline at the pump will average about $3.81 nationwide during this year’s summer driving season, which runs from April 1 through the end of September and coincides with Americans taking vacations…That is five cents less than the agency’s previous outlook for summer prices, but well above last summer’s average of $2.76 a gallon, the department’s Energy Information Administration said in its latest forecast…The EIA also said there is a 41% chance that retail gasoline prices will average more than $4 a gallon during July…While the U.S. average price is still approaching $4 a gallon, that psychologically significant threshold has already been breached in many parts of the country. Last week, a gallon of regular gasoline on average cost $3.97 a gallon in the U.S.
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How was burning wood for energy ever a good idea? Boston Globe (5/10/11) reports: Burning wood for electricity was once a hot idea in Massachusetts.Gov. Deval Patrick’s administration committed $1 million to spur wood power plant development, which a 2007 state-funded report predicted would bring hundreds of jobs and an economic boost worth tens of millions of dollars…The best part? It was seen as green, a way to meet the state’s clean energy demands with a renewable energy source as old as the campfire…Today, wood has been reduced to a bit role in the Patrick Administration’s renewable energy plans…Regulations proposed this month virtually eliminate any chance large, wood-fired electricity plants can be built in Massachusetts, according to advocates for power from wood, also called biomass…Massachusetts officials note that none of the designs for wood power plants now planned in the state meet the proposed new efficiency standards. They say they hope to “redirect” the industry to build smaller, combined heat and power units, used at sites such as industrial parks.

Morning Energy News – May 10, 2011

This is what happens when you take too many right hooks to the head, you start thinking deductions are subsidies The Hill (5/9/11) reports: Senate Majority Leader Harry Reid (D-Nev.) signaled Monday that the Senate would soon turn to a controversial piece of legislation to do away with billions of dollars in tax breaks for large oil producers and increase breaks for clean-energy producers…As Reid welcomed Sen. Dean Heller (R-Nev.) to the Senate Monday afternoon. he noted the upper chamber would soon have opportunities to “make tough choices” and referred to the upcoming energy legislation…”We’ll continue our conversation about how to save taxpayer money and lower our nation’s deficit,” Reid said….”We have to recognize that we cannot do either so long as we keep giving away money to oil companies who clearly don’t need taxpayer handouts,” Reid said. “As gas prices and oil company profits keep rising, each senator will soon have the opportunity to stand with millionaires or with the middle class.”

Solar energy rent seekers scramble to find new markets as Europe sobers up from their renewable binge Wall Street Journal (5/9/11) reports: First Solar is trying to gain access to China’s solar sector, as it and other producers are facing uncertainty over an expected fall-off in business in Europe, the world’s leading solar market…”[China Power International] has a tremendous advantage and strength in operating in China and we have a tremendous advantage and strength in technology but also in building utility systems,” said Kevin Berkemeyer, First Solar’s China representative. “So we really want to bring those two together.”..Under the agreement, the companies initially will explore opportunities within China, and First Solar will assist China Power to find investment opportunities in the U.S. and elsewhere, leveraging the Chinese company’s 2 gigawatts of projects planned for the domestic market and First Solar’s expertise and its 2.4-gigawatt business pipeline in North America…”We are very pleased to build an extensive and in-depth relationship with First Solar, a global leader in solar photovoltaic technology,” said Li Xiaolin, China Power International chairwoman. “This cooperation leverages our advantages in the domestic solar-power industry, and helps First Solar further expand its business presence in China.”

The Obama Administration shuts down American energy and conservatives are blamed for high gas prices Politico (5/9/11) reports: With oil companies such as ExxonMobil announcing a jump in profits of nearly 70 percent while gas prices are hovering around $4 a gallon, Republicans are trying to avoid any impression of defensiveness over their strong support for Big Oil. Most are not apologetic that they subsidize these corporations with their vast array of workers. But they have reason to be nervous…Many are now saying they do not support subsidies, while others assert that these help keep gas prices low and create U.S. jobs. But Republicans have reason to be nervous…This is a strong issue for Democrats. Voters are furious with oil companies, according to our polling, and overwhelmingly support ending subsidies. These subsidies are a key piece of a larger debate about the parties’ priorities, as we argued before. It can be viewed as part of the Republicans’ pattern of support for a budget that cuts taxes for corporations and the rich while ending Medicare as we know it and raising taxes on the middle class.

And again, I may become tall and good looking.  Why does this entire industry exist only in the subjunctive? E&E News (5/9/11) reports: The world could be drawing almost 80 percent of its energy from renewable sources by 2050, the Intergovernmental Panel on Climate Change said in a report released today…Taking a broad view of renewable power — including not only wind, solar and geothermal power but also wood scavenged in the developing world — the report says renewables could constitute about 77 percent of all power generation, measured in exajoules per year, up from 13 percent…The 77 percent by 2050 estimate represents the report’s most optimistic scenario, assuming a host of policy changes by governments to put a stiff price on emissions of greenhouse gases and generous support for renewable generation…On the low end, the report says renewables might constitute just 15 percent of energy generation by 2050…”While the report concludes that the proportion of renewable energy will likely increase even without enabling policies, past experience has shown that the largest increases come with concerted policy efforts,” the report’s authors say in a release.

A man this eloquent should be President Las Vegas Review (5/8/11) reports: Our legislators, in all their perspicacity and foresight, have said, “Let there be renewable energy,” and gosh darn it, there will be renewable energy whether we need it or not and no matter the cost to the citizens of Nevada…It’s good for us, and we’re going to swallow a full dose of it and turn “green.”..Late last month the Public Utilities Commission of Nevada issued a draft order that concluded “renewable energy has had a minimal impact on residential rates and has not been the cause of high rates in Nevada.” Of course, as NV Energy pointed out in testimony, the data the PUC was using was historic — for only the past five years, as renewables or green energy such as solar, wind and geothermal were just coming onto the power grid. Various calculations placed the cost per month of renewables in 2009 for Southern Nevada ratepayers at somewhere between $1.86 and $2.30, which is up from 29 or 30 cents in 2005.

Morning Energy News – May 5, 2011

My gut tells me that locally grown organic tofu wasn’t served at his son’s wedding Washington Post (5/4/11) reports: Prince William’s dad — also known as Charles, the future king of England — knows a bit about taking verbal punches…Promoting sustainable farming and green living has been one of his life’s missions. But because he’s a royal with easy access to carbon-hogging jets, a handful of estates, flotillas of attendants and all sorts of resource-gobbling goodies, his oft-praised crusade tends to get lampooned with some frequency…“I have been venturing into extremely dangerous territory by speaking about the future of food,” the Prince of Wales told an audience Wednesday at Georgetown University, evoking an image that could just as easily apply to his efforts to promote reducing dependence on fossil fuels. “I have the scars to prove it!”

Gas consumption is down, but the grocery truck still needs to get to the store — buckle up for high gas prices Business Week (5/4/11) reports: Gasoline demand continues to fall in the U.S. as pump prices keep climbing…Reports from government and industry groups show motorists have been cutting back on the amount of gas they put into their tanks for more than a month. That could signal trouble for the economy since Americans typically cut spending on other activities before they do less driving…Since January, the national average for a gallon of regular unleaded has risen 91 cents, or 30 percent, to $3.98. The main reason is a 20 percent gain in the price of oil this year. Gas rose more than 30 cents in April alone, as refinery problems led to an unusually big drop in supplies…Gas is now above $4 per gallon in 13 states and Washington D.C.
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My favorite part?  How almost all of the completed reviews were for categorical exclusions.  You know, the process the Obama Administration went out of its way to shut down in offshore permits E&E News (5/4/11) reports: Federal agencies continue to complete timely environmental reviews for stimulus-funded projects, filing more than 99 percent of the required National Environmental Policy Act reviews, according to the White House…The White House Council on Environmental Quality submitted its ninth report to Congress today on agencies’ compliance with NEPA, reporting that federal agencies had completed 190,000 of 190,694 required reviews…Agencies are required to conduct NEPA reviews for most of their decisions and actions, using the process to reveal any potential environmental impacts. Some reviews are more time-consuming than others. The vast majority of projects only require a “categorical exclusion” that indicates no environmental concerns; others must go through a thorough analysis with public comment.
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High profile Brit enviro admits reality–the problem isn’t too little fossil fuels, but that we have too much… The Guardian (5/5/11) reports: You think you’re discussing technologies, and you quickly discover that you’re discussing belief systems. The battle among environmentalists over how or whether our future energy is supplied is a cipher for something much bigger: who we are, who we want to be, how we want society to evolve. Beside these concerns, technical matters – parts per million, costs per megawatt hour, cancers per sievert – carry little weight. We choose our technology – or absence of technology – according to a set of deep beliefs: beliefs that in some cases remain unexamined…The case against abandoning nuclear power, for example, is a simple one: it will be replaced either by fossil fuels or by renewables that would otherwise have replaced fossil fuels. In either circumstance, greenhouse gases, other forms of destruction and human deaths and injuries all rise…The case against reducing electricity supplies is just as clear. For example, the Zero Carbon Britain report published by the Centre for Alternative Technology urges a 55% cut in overall energy demand by 2030 – a goal I strongly support. It also envisages a near-doubling of electricity production. The reason is that the most viable means of decarbonising both transport and heating is to replace the fuels they use with low-carbon electricity. Cut the electricity supply and we’re stuck with oil and gas. If we close down nuclear plants, we must accept an even greater expansion of renewables than currently proposed. Given the tremendous public resistance to even a modest increase in windfarms and new power lines, that’s going to be tough.
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Remember all those liars who said the new GHG regs would be no big deal? E&E News (5/4/11) reports: Two environmental groups have challenged the air pollution permit for a $750 million iron plant in southwestern Louisiana, which is the first project that was approved under the greenhouse gas regulations that were implemented by U.S. EPA in January…The petition, which was filed yesterday by the Sierra Club and the Louisiana Environmental Action Network, asks EPA to throw the brakes on a $3.4 billion complex being developed in southeastern Louisiana by Charlotte, N.C.-based Nucor Corp…The groups argue that when the Louisiana Department of Environmental Quality signed off on a final permit for the direct reduced iron (DRI) plant in late January, it was required to combine the project with a pig iron plant that got approval from state regulators last year. Their petition also claims that the amount of greenhouse gases the plant would be allowed to release is “considerably higher” than it should be…Joanne Spalding, an attorney at the Sierra Club, said Nucor appears to have rushed the pig iron facility through the permitting process to avoid subjecting the higher-emitting plant to the new climate regulations. Though the permit could set a precedent because it is one of the first ones reviewed under the new climate regulations, the Sierra Club would have challenged the project anyway, she said.

Morning Energy News – May 4, 2011

This is very good news.  But the people who hate people (you know who we mean) are going to spin it as terrible news E&E News (5/3/11) reports: The world’s population will hit 7 billion this year and is expected to reach 10 billion over the next 90 years in a moderate scenario, U.N. demographers said today…Revising projected population growth rates for 2010, the United Nations’ Department of Economic and Social Affairs’ Population Division said the 7 billion milestone will likely be reached in October…The division’s long-term estimates assume that nations with high population growth rates will achieve lower fertility levels in coming decades, a phenomenon seen as the nations’ economies develop. If fertility rates hold steady, the world’s population could more than triple by 2100, U.N. officials warn…”If we assume that fertility does not decline … we would have a world population of almost 27 billion people by 2100,” researcher Gerhard Heilig said. “So this gives you a very important message: The topic of world population growth is not over yet.”…Population Division chief Hania Zlotnik said the world went from 5 billion to 6.9 billion “in record time” but has witnessed a steady decline in fertility rates through that period, with some of the most advanced nations having such low fertility that they will shrink over coming decades.

The military is entering the energy conversation, but they never ask these fundamental questions: compared to what and at what cost? New York Times (5/3/11) reports: So listen for a moment to two military strategists, working at the highest level of government, as they turn to the subject of leaky air-conditioners in government buildings in New York. “Poorly fitted air-conditioners cost New York City 130 to 180 million dollars a year in extra energy consumption,” one of the strategists, Capt. Wayne Porter of the Navy, said Tuesday. “They generate 370,525 extra tons of carbon dioxide.”…Suppose, he says, you fixed them. And then you got the 40 states that waste the most electricity to match the 10 most efficient. The likely benefits are no surprise — less foreign oil, cost savings, job creation, decreased pollution…Now follow that thread to “A National Strategic Narrative,” a paper written by Captain Porter and Col. Mark Mykleby of the Marines, which calls on the United States to see that it cannot continue to engage the world primarily with military force, but must do so as a nation powered by the strength of its educational system, social policies, international development and diplomacy, and its commitment to sustainable practices in energy and agriculture…“We must recognize that security means more than defense,” they write. After ending the 20th century as the world’s most powerful country, “we failed to recognize that dominance, like fossil fuel, is not a sustainable form of energy.”
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Greenies dreams come true — man swaps diesel for ox power on his farm because of high-energy costs New York Times (5/4/5) reports: ON a sunny Sunday just before the vernal equinox, Rich Ciotola set out to clear a pasture strewn with fallen wood. The just-thawed field was spongy, with grass sprouting under tangled branches. Late March and early April are farm-prep time here in the Berkshires, time to gear up for the growing season. But while many farms were oiling and gassing up tractors, Mr. Ciotola was setting out to prepare a pasture using a tool so old it seems almost revolutionary: a team of oxen…Standing just inside the paddock at Moon in the Pond Farm, where he works, he put a rope around Lucas and Larson, his pair of Brown Swiss steer. He led them to the 20-pound maple yoke he had bought secondhand from another ox farmer, hoisted it over their necks and led them trundling through the fence so they could begin hauling fallen logs.
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The Grand Plan: Under President Obama’s direction, energy prices have ‘necessarily skyrocketed’ and now consumers must shift towards smaller cars Fuel Fix (5/4/11) reports: The nation’s reviving economy and near-record gasoline prices sent Americans to showrooms to buy fuel-efficient vehicles in April, giving automakers’ sales a boost…General Motors Co.’s sales rose 26 percent in April compared with the same month a year ago. Sales of 232,538 vehicles were led by its fuel-sipping Chevrolet Cruze, which enjoyed retail sales 180 percent higher than the Chevrolet Cobalt it replaced…Ford Motor Co. logged a 13 percent increase in April, selling 189,778 units, aided by sales of its new Focus and Fiesta cars…Toyota Motor Co. posted the smallest gain of major automakers, with sales rising 1.3 percent on sales of 159,540 vehicles. April marked the first full month for sales since the March 11 earthquake and tsunami hit Japan and damaged manufacturing plants and suppliers’ factories.

What’s in a name? Greenies are shocked to learn that rare earth metals are rare and they are going to become much rarer with one million electric vehicles on the road New York Times (5/2/11) reports: Rare earth prices are reaching rarefied heights.World prices have doubled in the last four months for rare earths — metallic elements needed for many of the most sophisticated civilian and military technologies, whether smartphones or smart bombs… Toyota has been raising prices for the Prius, but has cited demand for the car and economic conditions. While acknowledging that rising prices for raw materials in general have affected the company’s overall financial results, Toyota has declined to provide a breakdown of the role of rare earths…And this year’s increases come atop price gains of as much as fourfold during 2010…The reason is basic economics: demand continues to outstrip efforts to expand supplies and break China’s chokehold on the market…Neodymium, a rare earth necessary for a range of products including headphones and hybrid electric cars, now fetches more than $283 a kilogram ($129 a pound) on the spot market. A year ago it sold for about $42 a kilogram ($19 a pound)…Samarium, crucial to the manufacture of missiles, has climbed to more than $146 a kilogram, up from $18.50 a year earlier…One exception is the Toyota Prius hybrid car, whose manufacture uses a kilogram of neodymium.

I wonder if Senator Levin realizes that gasoline fuels the cars that his state makes? The Hill (5/3/11) reports: A senior Senate Democrat who has pushed to repeal oil industry tax breaks believes the success of renewed efforts to strip the incentives rests on how much muscle the White House puts behind them…Sen. Carl Levin (D-Mich.) sponsored the most recent plan to come up for a Senate vote – an amendment that failed 44-54 in early February. But Democrats plan to take another shot in coming weeks, even though they face an uphill battle…“It depends on whether the president really weighs in heavily. At least it depends in part on it,” Levin said in the Capitol Monday when asked whether there will be enough support to pass a repeal. He noted that President Obama favors ending the incentives…Obama and Senate Democrats who favor stripping the incentives have pounced on high gasoline prices and high profits reported by companies including Exxon and Shell to call for another vote – and try to politically tether Republicans to oil companies…Senate Majority Leader Harry Reid (D-Nev.) on Monday named the issue among his priority items for the upcoming several weeks before the Memorial Day recess.
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Energy states fall back on the ‘safety in numbers’ adage by forming a coalition to lobby Congress for offshore permits Houston Chronicle (5/2/11) reports: Governors from Alaska and states bordering the Gulf of Mexico are reaching out to their counterparts along the West and East Coast today in a bid to get them more involved in decisions about energy production offshore…The push for a new Outer Continental Shelf Governors Coalition is led by four governors who know a little something about oil and gas production offshore: Rick Perry of Texas, Bobby Jindal of Louisiana, Haley Barbour of Mississippi and Sean Parnell of Alaska…In an invitation to other coastal state governors, the foursome said they hoped the coalition would “foster an appropriate dialogue between the coastal states and the administration” about offshore drilling. The group would give the governors a vehicle to lobby for expanded drilling offshore…“All federal decisions regarding exploration and production must be made in consultation with affected states,” the four governors said. “In recent months, however, the federal government has taken sweeping actions regarding offshore oil
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Good night and good luck: Germany swaps out nuclear for wind energy UPI (5/2/11) reports: German Chancellor Angela Merkel Monday inaugurated Germany’s first commercial offshore wind farm…Wearing a shiny blue blazer, Merkel, flanked by a state senator and the head of German utility EnBW, pushed a button to officially launch Baltic 1, a 50-megawatt wind farm of 21 Siemens turbines that produce power for around 50,000 households…Located around 10 miles north of the Darss Peninsula in the Baltic Sea, the farm is operated by EnBW and is to be the first of many commercial wind farms off the German coastlines…”We’re in uncharted territory with the offshore technology, so let us learn together,” Merkel, who had flown over the farm in a helicopter, was quoted as saying by her spokesman Steffen Seibert…The head of the renewable energy unit at German technology giant Siemens, Rene Umlauft, called Baltic 1 a major milestone for Germany’s offshore wind power generation.
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Odd article in Forbes this morning where the author needs reminding that money does not belong to the U.S. Treasury, but to the people Forbes (5/3/11) reports: Although the president hopes to eliminate eight specific tax breaks–which cost the Treasury $43.6 billion over 10 years–only three, accounting for $31.9 billion of that total, are particularly important. Conservatives have no business defending any of them…The largest tax break at issue is a tax credit passed in 2005, which is available to all U.S. manufacturers. Oil and gas companies qualify for that credit, so they will likely deduct somewhere in the neighborhood of $18.3 billion from their tax bill over the next 10 years. Note that this isn’t really an “oil subsidy”; it’s a manufacturing subsidy that oil and gas companies–along with many other companies–enjoy… ast week President Barack Obama responded to rising public anger over soaring gasoline prices by banging the drums for the elimination of various tax breaks enjoyed by the oil and gas industry. Although House Speaker John Boehner, R-Ohio, initially suggested that he might be open to President Obama’s proposal, the House GOP leadership chose to answer the president’s weekly radio address–which advocated elimination of those tax breaks–with freshman Tea Party Congressman James Lankford, R-Okla., who charged that the plan was about “hiking taxes by billions of dollars.”

Morning Energy News – May 2, 2011

Shell Oil Company could fuel 25 million cars for 35 years by drilling in the Arctic, but big green and big government have other plans New York Times (5/1/11) reports: Shell Oil will present an ambitious proposal to the federal government this week, seeking permission to drill up to 10 exploratory oil wells beneath Alaska’s frigid Arctic waters… The forbidding ice-clogged region is believed to hold vast reserves of oil, potentially enough to fuel 25 million cars for 35 years. And with production in Alaska’s North Slope in steep decline, the oil industry is eager to tap new offshore wells…Shell has led the way, working for five years to convince regulators, environmentalists, Native Alaskans and several courts that it could manage the process safely, protect polar bears and other wildlife, safeguard air quality for residents and respond quickly to any spill in the region. But BP’s Deepwater Horizon disaster a year ago put a chill on new offshore drilling…Shell’s renewed application will pose a test for President Obama, who promised to put safety first after the BP spill. But he has also reiterated his support for offshore drilling amid voter worries about rising gasoline prices.

Lawyer Up: Western Energy Alliance files suit against the Department of Interior for being derelict in their responsibilities with regards to oil and gas permits. Read the brief here.
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The plan we can all get behind: Obama wants to emulate Spain’s green jobs program. We are almost half way there — Spain announces 21% unemployment CNN (4/29/11) reports: Spain’s unemployment rate rose nearly a point to 21.29%, with 4.9 million jobless for the first quarter of 2011, the government reported Friday, as the prolonged economic crisis continues to squeeze the nation…Some analysts had predicted the number of jobless might surpass 5 million. But while that didn’t happen, the latest statistics were another blow to the economy and to the embattled socialist government…The numbers for the fourth quarter of 2010 — 20.33% unemployment and almost 4.7 million jobless — already represented the highest joblessness rate in 13 years…The latest numbers, for the first quarter of this year, added more somber news. The number of unemployed increased by 213,000, pushing the overall number to 4.9 million…All major sectors — industry, construction, services and agriculture — shed jobs during the quarter. The number of Spanish households in which no adult had a job increased by 58,000, to a new total of 1.38 million, the government said…Earlier this month, embattled Socialist Prime Minister Jose Luis Rodriguez Zapatero announced he would not seek a third term. Elections are due by March 2012.
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It’s the ethanol, stupid. CEO of major pork producer explains in simple terms that ethanol is making food more expensive Wall Street Journal (4/30/11) reports: Mr. Pope is the chief executive officer of Smithfield Foods Inc., the world’s largest pork processor and hog producer by volume. He doesn’t mince words when it comes to rapidly rising food prices. The 56-year-old accountant by training has been in the business for more than three decades, and he warns that the higher costs may be here to stay…Courtesy of? “I’m not going to say, ‘a political policy,’” he tells me. (His senior vice president, a lawyer by training, sits close by, ready to “kick his leg” if his garrulous boss speaks too plainly.) But politics indeed plays a large role, as Congress subsidizes favorite industries and the Federal Reserve pursues an expansive monetary policy… What triggered the upswing? In part: ethanol. President George W. Bush “came forward with—what do you call?—the edict that we were going to mandate 36 billion gallons of alternative fuels” by 2022, of which corn-based ethanol is “a substantial part.” Companies that blend ethanol into fuel get a $5 billion annual tax credit, and there’s a tariff to keep foreign producers out of the U.S. market. Now 40% of the corn crop is “directed to ethanol, which equals the amount that’s going into livestock food,” Mr. Pope calculates.
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Fool me once, shame on you. Fool me twice, shame on me. Fool me with wind energy and I must be out of my mind Telegraph (4/30/11) reports: The payments, worth up to 20 times the value of the power they would have produced, raises serious concerns about such subsidies, which are paid for by the customer…The six Scottish wind farms were asked to stop producing electricity on a particularly windy night last month as the National Grid was overloaded…Their transition cables do not have the capacity to transfer the power to England and so they were switched off and the operators received compensation. One operator received £312,000, while another benefited by £263,000…The payments were discovered by the Renewable Energy Foundation, a green think tank, which accused the Government of building too many wind farms in northern Britain.
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There’s an app for that — Al Gore launches new climate app for the iphone and ipadTime (5/1/1) reports: No, Al Gore did not invent the Internet, but the former Vice President and Nobel Peace Prize winner has always has a hand in high-tech, even as he warned the world about global warming. Those two interests are intersecting with the release of a new iPad, iPhone and iPod Touch app version of his recent climate and energy book Our Choice. The app is one of the first truly multimedia e-books, with interactive graphics, video, photos with geolocation and narration by Gore himself. Gore sat down with TIME’s Bryan Walsh in the New York offices of Gore’s firm Generation Investment to talk about the Our Choice app, the state of the climate movement and post-truth politics…Q: Does the app get you a new audience for the book?..A: Yes it does. We live in a multi-platform world. I think that the app experience is a magical one that will give it a lot of velocity as a media form because it combines books, movies, audio, animation and interactive features. There is nothing between you and the content, and there is no computer hurdle to clear. You just touch it with your finger, blow on it and manipulate it. It’s very intuitive.

Morning Energy News – April 27, 2011

IER’s Dan Kish puts the gas price debate in perspective by calling out President Obama’s stance on fossil fuels  Daily Caller (4/26/11) reports: Seizing upon comments made this week by House Speaker John Boehner that Congress should “be looking into” quelling subsidies for oil and gas companies, President Obama sent a letter to House and Senate leaders urging them to pass his proposal to end tax credits for oil companies and transfer them to other companies that produce energy through other means…Daniel Kish, senior vice president for policy at the Institute for Energy Research, an oil industry think tank, said Obama has long supported policies that would increase the price of oil, including limits on oil production in the United States, and is now pointing fingers at the oil companies for high gas prices…“Now that his plan is bearing expensive fruit Americans don’t like, his attempt to shift blame away from his actions is pathetically akin to what we would expect from Hugo Chavez or some other third world populist.  His chickens are coming home to roost,” Kish said.

Greenies must own stock in oil companies; why else would they be driving up the price?  CNBC (4/26/11) reports: What’s good for Big Oil is good for America Or at least that’s the message from Big Oil this week, as five major oil companies prepare to unveil quarterly earnings numbers that are expected to show major profits at a time when Americans are facing rising gas prices at the pump…But the Obama administration has another take: If the oil companies are doing so well, maybe they ought to give up about $44 billion worth of federal subsidies over the next ten years…President Obama ratcheted up his push Tuesday with a letter to Republican and Democratic congressional leaders asking them to remove the subsidies…”Our outdated tax laws currently provide the oil and gas industry more than $4 billion per year in these subsidies, even though oil prices are high and the industry is projected to report outsized profits this quarter,” Obama said…The Obama administration now has an unlikely potential ally on that front: Republican House Speaker John Boehner of Ohio, who said this week that he’s open to reexamining the oil company subsidies even if he’s not ready to commit to axing them just yet.
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What Boehner should have said: let’s end all energy subsidies The Hill (4/26/11) reports: White House economic adviser Gene Sperling made the case Tuesday for eliminating a series of oil industry tax breaks, part of a ramped-up push by the administration to focus on the issue in light of rising gas prices…“At a time when we are asking our entire country to engage in shared sacrifice, we have to ask ourselves whether we can still afford $43 billion over 10 years on subsidies that do not seem to be efficient or needed or consistent with our G20 commitments and obligations,” Sperling said during an energy conference on Washington on Tuesday afternoon…Sperling’s comments came about an hour after President Obama sent a letter to congressional leaders calling for quick passage of legislation eliminating the tax breaks…The White House is hoping to capitalize on remarks by Speaker John Boehner (R-Ohio) Monday in which he appeared to open the door to supporting the elimination of the tax breaks. Boehner said he may be open to cutting the tax breaks for some of the larger oil companies.
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Turns out Moses did not lead the Israelites to the only place in the Middle East without oil — oil shale deposits could make Israel energy independent Reuters (4/27/11) reports: A subsidiary of U.S.-firm IDT Energy (IDT.N) is leading a push in Israel to tap into the country’s vast deposits of oil shale…The company, Israel Energy Initiatives (IEI), has already invested “tens of millions of dollars” in preparing a pilot project it hopes to launch by the end of 2011, CEO Relik Shafir told Reuters…”If successful, in a few years IEI could start producing 50,000 barrels of oil a day, or 20 percent of Israel’s consumption, for 30 years,” Shafir said…The division of IDT that owns IEI is called Genie Energy, and it has already brought investments from financier Jacob Rothschild and media mogul Rupert Murdoch. Together they own a 5.5 percent stake worth $11 million, according to a company statement from November…Murdoch, upon joining Genie Energy’s advisory board last year, said the group would “spur a global, geo-political paradigm shift by moving a major portion of new oil production to America, Israel and other Western-oriented democracies.”

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Two cheers for Florida taxpayers — solar and biomass energy producers mourn the death of their rent seeking bill Miami Herald (4/27/11) reports: Solar and biomass energy companies mourned the loss of a sure job development opportunity Tuesday as the state Senate’s budget chief put a spear through a bill to spur renewable energy in Florida…“I’d pronounce that one dead,’’ said Sen. J.D. Alexander, R-Lake Wales, chairman of the Senate Budget Committee after he indefinitely postponed a bill that would have allowed Florida’s largest electric companies to raise electric rates as much as $375 million a year for five years to develop alternative energy…”I think it’s a terrible idea,’’ said Alexander, a citrus grower. “I can’t believe we’d ask Florida to pay $1 billion in additional assessments with zero regulatory oversight. I think that’s fundamentally not right.”…This is the third year the bill has been the priority of Florida Power & Light, and it is the third time the bill has died. The only thing new this year is that the Koch brothers-backed Americans For Prosperity joined in the chorus of opponents to argue against the bill.

Morning Energy News – April 26, 2011

Keep up the pressure — it looks like Bromwich’s blow out preventer is about to blow! Platts (4/25/11) reports: Michael Bromwich, the chief regulator for US offshore drilling, on Monday waded into Washington’s growing debate about high oil prices, saying his agency’s pace of reviewing oil and gas exploration plans has no relation to the rising cost of gasoline…”Even if we permitted the hell out of everything tomorrow — every pending permit, some permits that haven’t even been filed yet — it would not have a material effect on gas prices,” Bromwich said. “That’s the simple, clear reality.” …High oil prices have started to become a top talking point among politicians in Washington as the national average for gasoline nears $4/gal ahead of the peak summer driving season…Speaking at a Public Citizen event, Bromwich — who heads the Bureau of Ocean Energy Management, Regulation and Enforcement — said the administration of President Barack Obama has tried to make clear in recent weeks that high oil and gasoline prices reflect global trends…”The problem is, not enough people are listening,” Bromwich said. “You can’t drill your way to lower oil prices. It’s a world market. We have a very limited impact on that.”…”The fact is that stepping up the rapidity with which we grant drilling permits — applications to drill — may make some people feel better, but it will not have a material affect on gas prices,” he continued. “That is a fact. It’s an economic fact.”

Shocker — Employment Prevention Agency takes their ball and goes home, leaving Shell in the wind as Americans suffer at the pump Fox News (4/25/11) reports: Shell Oil Company has announced it must scrap efforts to drill for oil this summer in the Arctic Ocean off the northern coast of Alaska. The decision comes following a ruling by the EPA’s Environmental Appeals Board to withhold critical air permits. The move has angered some in Congress and triggered a flurry of legislation aimed at stripping the EPA of its oil drilling oversight…Shell has spent five years and nearly $4 billion dollars on plans to explore for oil in the Beaufort and Chukchi Seas. The leases alone cost $2.2 billion. Shell Vice President Pete Slaiby says obtaining similar air permits for a drilling operation in the Gulf of Mexico would take about 45 days. He’s especially frustrated over the appeal board’s suggestion that the Arctic drill would somehow be hazardous for the people who live in the area. “We think the issues were really not major,” Slaiby said, “and clearly not impactful for the communities we work in.”…The closest village to where Shell proposed to drill is Kaktovik, Alaska. It is one of the most remote places in the United States. According to the latest census, the population is 245 and nearly all of the residents are Alaska natives. The village, which is 1 square mile, sits right along the shores of the Beaufort Sea, 70 miles away from the proposed off-shore drill site…The EPA’s appeals board ruled that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project. Environmental groups were thrilled by the ruling.
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Gingrich has corn on his face…paystubs tie former speaker to ethanol lobby even though he disputes the claim iWatch (4/25/11) reports: “I am not a lobbyist for ethanol,” Newt Gingrich declared in a mid-winter spat with the editors of The Wall Street Journal over his support for government subsidies for alternative fuel…But Gingrich was a hired consultant to a major ethanol lobbying group—at more than $300,000 a year…According to IRS records, the ethanol group Growth Energy paid Gingrich’s consulting firm $312,500 in 2009.The former House Speaker was the organization’s top-paid consultant, according to the records. His pay was one of the group’s largest single expenditures, as it took in and spent about $11 million to promote ethanol and to lobby for federal incentives for its use…In a Growth Energy publication, Gingrich was listed as a consultant who offered advice on “strategy and communication issues” and who “will speak positively on ethanol related topics to media.”

As interesting and useful as Nisbet’s work is, it avoids locking up on the most important problem with cap and trade:  it would have cost a lot and not have achieved anything E&E News (4/25/11) reports: A little-known associate professor at American University kicked a hornet’s nest last week when he released a study that took aim at environmentalists’ view of themselves as underdogs, outgunned in financing and exposure by “Big Oil,” “Big Coal” and other industries interested in maintaining the regulatory status quo…The report by Matthew Nisbet, an associate professor of communications, was targeted by the liberal Center for American Progress even before its planned release last Wednesday for its section arguing that environmentalists have caught up with or surpassed their adversaries in the smoke stack industries when it comes to lobbying, advertising and campaign cash. CAP fellow Joseph Romm posted multiple blog entries shooting down Nisbet’s findings one by one (Greenwire, April 19)…At the same time, the liberal media watchdog group Media Matters for America posted entries that questioned Nisbet’s choice not to analyze climate change coverage by television networks when calculating whether there is a media bias against climate science. They particularly questioned his decision to exclude Fox, which is widely viewed by the Republicans who shunned the 2009 and 2010 congressional efforts to pass cap and trade.
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President Obama has changed consumer habits — people are driving less, but they’re not happy about it and they know who gets the credit: 7 out of 10 blame Obama Washington Post (4/26/11) reports: Soaring gasoline prices are biting into household incomes and nibbling at Americans’ fuel consumption — and support for President Obama, according to a Washington Post-ABC News poll…About six in 10 respondents said they had cut back on driving because of rising fuel prices, and seven in 10 said that high pump prices are causing financial hardship…Obama, like previous presidents in times of high oil prices, is taking a hit. Only 39 percent of those who call gas prices a “serious financial hardship” approve of the way he is doing his job, and 33 percent of them say he’s doing a good job on the economy…The Energy Information Administration said Monday that gas prices climbed last week to $3.88 a gallon, up 81 cents since the start of the year. That is the highest pump price since August 2008, before the financial meltdown.
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Lawyer up: today starts the legal battle between the environmentalists and the taxpayers New York Times (4/25/11) reports: The latest phase in the legal fight over offshore drilling permits that was kick-started by last year’s Deepwater Horizon disaster begins this week with two back-to-back arguments in a federal appeals court in New Orleans…Tomorrow, a three-judge panel of the 5th U.S. Circuit Court of Appeals will consider two related cases concerning permits that were approved around the time of the April 20 explosion and oil spill in the Gulf of Mexico…Both cases arise from allegations made by environmentalists that the government violated environmental laws in approving permits both before and in the immediate aftermath of the spill…They are just two of several cases on the issue of offshore drilling permits that are pending both in federal district court and in the appeals court, some brought by environmental groups that think the government is moving too quickly to approve permits and some by companies in the oil and gas industry that believe the government is unreasonably delaying issuing permits…The cases being argued before the 5th Circuit tomorrow morning both arise from the renewed interest shown by environmental groups in the drilling process in light of the spill.

Morning Energy News – April 20, 2011

For shame: Not once does this man address the issue of affordable and reliable energy being a moral issue — high energy prices are a tax on the poor The Hill (4/20/11) reports: For years, congressional Republicans have had a singular message on addressing gas prices, one made famous by former Alaska governor and #qwitterer Sarah Palin: Drill, baby, drill…It’s a simple and memorable phrase, delivers their idea of a solution in very few words, and resonates. The problem is it isn’t a solution at all…As we witnessed this week, with oil at a record $127 per barrel, Saudi Arabia announced it is cutting back production because the market is “oversupplied.” Ali al-Naimi, the country’s oil minister, told CNBC.com that the Saudis had scaled back production by 800,000 barrels in March in comparison to February numbers. According to the report, oil ministers from other OPEC countries agreed with the Saudis’ assessment that the market is oversupplied…But wait, what?…According to the Republicans in Congress, the only way we can lower gas prices is to increase supply by expanding drilling — in ANWR, in the Gulf, on the OCS and in our backyards. They claim that demand drives the price of oil. That’s what I keep hearing from congressional Republicans like Rep. Fred Upton (Mich.), Speaker John Boehner (Ohio), Sen. James Inhofe (Okla.) and Senate Minority Leader Mitch McConnell (Ky.) and the clarion of drilling, the aforementioned Palin. They think we just need to drill more and not invest in new domestically produced renewable sources of energy.

Morning Energy News – April 19, 2011

It’s amazing to watch the transformation of an entrepreneur into a rent seeker Business Week (4/19/11) reports: Google Inc. has invested another $100 million in a clean energy project. The funding for the Shepherds Flat Wind Farm in Oregon brings Google’s total clean energy investments to more than $350 million and represents the company’s latest attempt to support reliable new ways to power its expanding data centers…Data centers, or server farms, are notorious power hogs. And Google has many of them. The simple act of typing in a Google search taps into Google’s computing resources — and the grid that supplies energy to those machines…Google also invested last year in a project to line the sea floor off the East Coast with electrical cables to send power from offshore wind farms back onto land. Building capacity is one of the major costs of clean energy projects. Google has also invested in solar energy. 

Now serving Columbia. I wonder what number the U.S. pulled?  CNS News (4/19/11) reports: The U.S. Export-Import Bank, an independent agency of the federal government, is now planning a $2.84-billion loan for a massive project to expand and upgrade an oil refinery–in Cartagena, Colombia…The money would go to Reficar, a wholly owned subsidiary of Ecopetrol, the Colombian national oil company…“This is part of a $5.18 billion refinery and upgrade project in Cartagena, Colombia supplying petroleum products to the domestic and export markets,” the Export-Import Bank said in a statement…The U.S. government-controlled bank says the $2.84-billion in financing it plans to undertake will be the second largest project it has ever done. The largest was $3 billion in financing for a liquid natural gas project in Papua New Guinea.
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Double stamp, no take-backs: UK solar companies cry foul in court saying the government promised subsidies and they need that money in order to stay in business Bloomberg (4/19/11) reports: Low Carbon Solar U.K. Ltd., Element Power Ltd. and eight other companies and people asked a British court to review U.K. Energy and Climate Change Secretary Chris Huhne’s decision to reexamine solar subsidies…The government in March said it may cut subsidies for bigger solar projects by as much as 72 percent after announcing a comprehensive review in February of feed-in tariffs, or guaranteed prices paid for electricity from renewables. The ministry Huhne leads wants to prevent large solar farms from taking money earmarked for rooftop installations…The companies said today in an e-mailed statement that the government had set “clear expectations” that a first review wouldn’t take place until 2012, with subsidies changing in 2013. They also said the Department of Energy and Climate Change never said what the trigger would be for an early review…“In pulling back on a commitment to support solar energy, the government will cause the abandonment of hundreds of community-scale schemes,” said Mark Shorrock, chief executive of Low Carbon Solar. “The cost of not getting this right now, aside from the government meeting its climate change targets, include the creation of new jobs, a diversified income for farmers and landowners, reduced energy costs for businesses and the provision of more secure and reliable energy for the U.K.”
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Global Warming’s new celebrity spokesman, Charles Manson, chastises us for not putting “the trees back that we’ve butchered.” Daily Mail (4/18/11) reports: Crazed cult leader Charles Manson has broken a 20-year silence in a prison interview coinciding with the 40th anniversary of his conviction for the gruesome Sharon Tate murders – to speak out about global warming…The infamous killer, who started championing environmental causes from behind bars, bemoaned the ‘bad things’ being done to environment in a rambling phone interview from his Californian jail cell…’Everyone’s God and if we don’t wake up to that there’s going to be no weather because our polar caps are melting because we’re doing bad things to the atmosphere…’If we don’t change that as rapidly as I’m speaking to you now, if we don’t put the green back on the planet and put the trees back that we’ve butchered, if we don’t go to war against the problem…’ he added, trailing off.
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Possible ice breaker for Secretaries Salazar and Clinton, “Name all the areas of the world you’ve shut down for energy production” The Hill (4/19/11) reports: Interior Secretary Ken Salazar and Secretary of State Hillary Clinton are both slated to attend the May 12 meeting of the intergovernmental Arctic Council in Greenland, Salazar told reporters Monday…“One of the items we will be discussing in that forum will be how we move forward with oil-and-gas development,” Salazar said at a press conference on drilling…The intergovernmental council is made up of nations that border the Arctic Circle including Russia, the U.S., Greenland, Finland, Norway and Sweden. It’s designed to enhance cooperation and coordination among Arctic states…Salazar’s actions and comments on Arctic development will be closely watched amid uncertainty about the extent to which Interior will allow oil-and-gas drilling in a fragile region believed to hold massive energy resources…Royal Dutch Shell has for years been seeking federal permission to develop billions of dollars worth of leases in the Beaufort and Chukchi Seas off Alaska’s northern coast, and other companies are also planning exploration. Multiple bills on Capitol Hill are aimed at expediting development in the region

The unstoppable can-do American spirit collides with the immoveable U.S. Government — Shell expects to drill in Alaska in 2012 Wall Street Journal (4/15/11) reports: Royal Dutch Shell PLC expects to start drilling in Alaska’s Arctic waters in the summer of next year and have in place an oil-containment system specifically designed for the area ready at the same time, the head of the company’s U.S. operations said Friday…”Our aspiration is to drill in the 2012 season,” Marvin Odum, president of Shell Oil Co., the U.S. unit of the Anglo-Dutch giant, told Dow Jones Newswires in a interview. “We are hopeful, but also cautions.”..Shell still has to obtain a number of permits from the federal government in order to go ahead with its $3.5 billion investment to drill in the state’s Beaufort and Chukchi seas. Shell’s plans have been delayed by environmental lawsuits and permit issues on top of calls for better spill prevention and containment capabilities following BP PLC’s oil spill disaster in the Gulf of Mexico last year…Mr. Odum said the company will wait until about September to see the amount of progress in the permitting process before making a final decision to start deploying the system needed to drill next summer. “It takes about six months to build up the capacity you need to start the program,” Mr. Odum said. “This is a very significant resource for the country, which is worth pursuing, and we are focused on getting it done.”..Shell is planning to have in place an oil-containment system specifically designed to work in the cold-climate conditions of the Arctic by the time drilling starts, Mr. Odum said.

Good news is that Government Motors is going to sell a Volt. The bad news is that it’s replacing the one that burned down a garage Fox News (4/15/11) reports: Fire officials suspect an electric hybrid car may have sparked an overnight blaze in a garage in Barkhamsted on Center Hill Road…. Officials said they can’t rule out that the couple’s brand new Chevy Volt hybrid had something to do with the blaze…Homeowner Storm Connors and his wife, Dee, said they awoke to the sound of a smoke alarm around 4 a.m. The couple said they have lived in the home for nearly 40 years. They built it and raised their children there, so when the flames took over their attached garage Thursday morning, burning it down to its beams, the couple started to panic. They said they were worried they were going to lose their home and the memories inside…”I walked outside and looked in the garage door and it was flaming,” Dee Connors said. “I grabbed a pocketbook so I’d have a cellphone and a driver’s license and a jacket and a pair of slacks. I had no shoes, my feet were freezing.”
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Instead of listening to kids who are supported by their parents, the President should be listening to American workers who are feeling the pocketbook squeeze at the pump The Hill (4/17/11) reports:  A dozen climate change activists expecting a discussion with White House staffers got a surprise meeting with the president himself…A dozen young climate change activists expecting a discussion with White House staffers Friday instead got a meeting with President Obama himself…The surprise meeting came hours ahead of the April 15-18 Power Shift 2011 conference, which is slated to include criticism of a White House that some activists allege has not been aggressive enough on climate change…“We went thinking we would meet with senior staff and in walked Barack Obama,” said Courtney Hight, co-director of the Energy Action Coalition that organized the conference, which opened Friday night…“Young people got to sit down at a table in the West Wing and have a meeting with the president and share what our priorities are and talk about solutions, and we talked about the impact of fossil fuels in our communities, and how they can wreak havoc,” Hight said onstage at the conference of largely collegiate activists.
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This man has swagger Wall Street Journal (4/16/11) reports: The Chevron CEO is a rare breed these days: an unapologetic oil man. For decades—going back to Jimmy Carter—politicians have been peddling an America free of fossil fuels. Mr. Obama has taken that to an unprecedented level, closing off more acreage to drilling, pouring money into green energy, pushing new oil company taxes, instituting anticarbon regulations. America is going backward on affordable energy, even as oil hits $110 a barrel…As for biofuels, “we would need to consume land the size of states” to hit the country’s current ethanol targets. Chevron is investigating biofuels, but Mr. Watson says the “economics aren’t there” yet. Unlike many CEOs, Mr. Watson insists on products that can prosper without federal subsidies, which he believes are costly and lacking in transparency when “consumer pockets are tight, government pockets are tight…Bottom line: “We’re going to need oil and gas and coal for a long time if America wants to keep the lights on.”
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Problem: supply of crude oil from Middle East is unstable. Solution: drill for oil in the U.S. and import from Canada Bloomberg (4/18/11) reports: Crude prices currently include a premium of $15 to $20 a barrel, OPEC’s Secretary General said, commenting on the commodity’s 19 percent gain this year, driven by rising unrest in oil-producing nations in the Middle East…Oil officials from Kuwait, the United Arab Emirates, Iran joined Saudi Arabia, the world’s biggest crude exporter, in saying there is no shortage of fuel in the market…“I can’t say the market is oversupplied, but the market is adequately supplied and our production in March is almost the same as our production in December, even though one of our member countries is out of production,” OPEC’s Abdalla el-Badri told reporters today in Kuwait. “Yes, the price is a concern.”..Additional shipments to make up for halts in Libyan output has been met by a lack of buyers, el-Badri said, when asked if the Organization of Petroleum Exporting Countries will decide to raise production when it meets in June…Crude fell as much as 1.1 percent in New York to $108.47 a barrel today after Saudi Oil Minister Ali al-Naimi said yesterday that the global “market is oversupplied” with crude.
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NYT asked and answered their own rhetorical question, but here’s the kicker: they expect us to believe them on their word New York Times (4/18/11) reports: A year after BP’s Macondo well blew out, killing 11 men and spewing millions of barrels of oil into the Gulf of Mexico, the much-maligned federal agency responsible for policing offshore drilling has been remade, with a tough new director, an awkward new name and a sheaf of stricter safety rules. It is also trying to put some distance between itself and the industry it regulates… But is it fixed? The simple answer is no. Even those who run the agency formerly known as the Minerals Management Service concede that it will be years before they can establish a robust regulatory regime able to minimize the risks to workers and the environment while still allowing exploration offshore…“We are much safer today than we were a year ago,” said Interior Secretary Ken Salazar, who oversees the agency, “but we know we have more to do.”..Oil industry executives and their allies in Congress said that the Obama administration, in its zeal to overhaul the agency, has lost sight of what they believe the agency’s fundamental mission should be — promoting the development of the nation’s offshore oil and gas resources. Environmentalists said the agency, now known as the Bureau of Ocean Energy Management, Regulation and Enforcement, has made only cosmetic changes and remains too close to the people it is supposed to regulate.
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Two cheers. When in comes to government-induced green energy investment, the U.S. doesn’t waste as much money as Germany or China Global Post (4/18/11) reports: Germany and BEIJING, China — In the rough and blustery North Sea, almost 30 miles off Germany’s coast, 12 wind turbines tower over the water, with rotors longer than football fields…Like most wind turbines, those that make up the Alpha Ventus Offshore Wind Farm have gearboxes that transmit the power of the rotors to much faster-spinning cogs that generate electricity…The strain from wind turbulence makes these gearboxes the most fragile part of the turbines and a true engineering headache…Six of the Alpha Ventus gearboxes are made by Renk, a 130-year-old engineering company based in Augsburg, southern Germany. The three decades in which Renk has been involved with wind turbines haven’t always been easy, said Toni Weiss, general manager of Renk’s industrial gear division. But he estimates the firm is now five to seven years ahead of most rivals.

Morning Energy News – April 6, 2011

Senate to Vote on Plan to Reign In EPA Today–Unless Vote Gets Postponed Again… The Hill (4/5/11) reports: The Senate will vote on a GOP-backed plan to kill Environmental Protection Agency climate change rules Wednesday afternoon, according to Democrats and a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.)…Lawmakers will vote on McConnell’s amendment to small-business legislation, as well as several Democratic alternatives. The amendments need 60 votes to pass…The GOP-led EPA amendment mirrors legislation that the House will debate Wednesday as well. The Senate Democratic alternatives would limit or delay EPA rules without stripping the agency’s authority to regulate greenhouse gas emissions, including Sen. Jay Rockefeller’s (D-W.Va.) plan that would delay regulation of power plants, refineries and other facilities for two years. All the plans face very high hurdles to winning 60 votes…A caveat: The votes have appeared imminent several times in recent weeks without materializing. Stay tuned.

What has the world come to–the Communists in Cuba understand the value of domestically produced energy, but the President of the United States does not Associated Press (4/5/11) reports: Cuba on Tuesday announced plans to drill five deepwater oil wells in the Gulf of Mexico beginning this summer, expressing confidence that its efforts will be rewarded with major new energy finds…”We’re about to move to the drilling phase,” said Manuel Marrero, an official with the government authority tasked with overseeing Cuba’s oil sector…”We’re all really hopeful that we will be able to discover large reserves of oil and gas,” said Marrero, who added that the ventures would be undertaken with the help of unspecified foreign companies…He said the deepwater wells were to be drilled between 2011 and 2013, and would be in waters ranging in depth between 400 meters (a quarter mile) and 1,500 meters (1.6 miles). He did not specify which countries would be among the foreign partners working with Havana on the project.

Morning Energy News – April 5, 2011

Lisa Jackson channels her inner Scooby Doo villain and says, “If it weren’t for you pesky free market advocates, we would have gotten away with it!”  New York Times (4/4/11) reports: A Virginia state lawmaker caused a stir in February when he admitted that his resolution declaring U.S. EPA’s effort to curb greenhouse gas emissions a “regulatory train wreck” was written by the coal industry…Republican Delegate Will Morefield’s resolution said EPA regulations would have potentially “devastating consequences,” called for a “comprehensive study” of their impact on the economy and urged Congress to place a two-year moratorium on new air pollution regulations….Morefield’s resolution was drawn almost word-for-word from model legislation written by the American Legislative Exchange Council, or ALEC, which touts its access to almost 2,000 state legislators. The Washington, D.C.-based group claims credit for advancing legislation that it says has undermined climate science and environmental regulation in several states since the late 1990s….ALEC has been focusing of late on EPA’s greenhouse gas regulations and regional climate initiatives. At least eight state legislative bodies have adopted resolutions this year urging Congress to limit EPA’s power to regulate greenhouse gases — all of which came directly from ALEC model legislation….Legislators in more than 10 other states have introduced similar resolutions, according to Clinton Woods, the director of ALEC’s energy, environment and agriculture task force.
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Do you want to know a secret? Do you promise not to tell? Whoa oh, oh…Wind is in love with money and not with saving the world Wall Street Journal (4/5/11) reports: After years of blustery growth, wind power is facing a blow-back in some of its major markets. It is reeling from lackluster electricity demand in many mature economies, rock-bottom prices for competing natural-gas in the U.S. and uncertainty throughout much of the world about government subsidies. Companies that make wind turbines are slashing production at some plants and reconsidering previous expansion…Wind power is the biggest and cheapest of the renewable-energy sources now attracting major investment, from solar to biofuels to ocean waves, analysts say. Bigger blades, taller towers and slicker software all have improved the efficiency of the massive, pinwheel-style turbines that now dot landscapes from Iowa to India. The uncertain outlook for nuclear power after the Japan disaster should boost wind power’s appeal…Yet wind remains a tiny slice of the energy pie. In the U.S, it generated about 2% of electricity in 2009, the most recent year for which statistics are available, the U.S. Energy Information Administration says. World-wide, it generated about 1% of electricity in 2008, the most recent global numbers available, the International Energy Agency says.
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When it comes to shale gas, Huff Po writers pay homage to Mark Twain who said, “Get your facts first, and then you can distort them as much as you please” Huffington Post (4/5/11) reports:  We are desperately awaiting good news, but the bad news involving energy steadily worsens. It was a year ago this week that 29 miners perished in West Virginia’s Upper Branch coal mine and we collectively asked how much sooty coal we want to keep burning. Soon after, the Gulf of Mexico was carpeted with oozing gunk for months, forcing us to question whether offshore drilling is viable following the worst oil spill in history. That tragedy had only begun to recede when the Middle East began to explode and we once again confronted the vulnerability of our tenuous energy supplies. Then, as if Japan’s double-punch earthquake and tsunami wasn’t horrific enough, meltdown of the crippled nuclear power plant began. These events in rapid succession reminded us that every source of traditional energy is its own Hobson’s choice fraught with danger…All of these events together made people – and energy markets – increasingly jittery. Most Americans don’t make the connection until their pocketbooks are affected, such as when fuel prices surge, along with air fares, transportation costs and everything else. But Americans don’t want to hear about the problem; rather, our can-do attitude and American ingenuity demand a solution…Right when energy is on everybody’s mind, the biggest-circulation news magazine rides to our rescue with a compelling cover story “This Rock Could Power the World: Why Shale Can Solve the Energy Crisis.” It proclaims that natural gas offers us a whole century of relatively clean energy.
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Pay no attention to the man behind the curtain — the same guy who didn’t see the financial meltdown coming is now telling us not to worry about rising energy prices CNBC (4/5/11) reports: Concerns over global growth were also fueled by a survey published in the Nikkei business newspaper which showed economists expect the Japanese economy to contract by 0.6 percent for the January-March quarter and by 2.6 percent in the three months to the end of June…They expect growth quarter in the world’s third-largest economy to return in the July to September, the survey found….Back in the US, investors were digesting comments made by Federal Reserve President Ben Bernanke Monday evening which suggested the Fed is not yet ready to start tightening monetary policy despite an improving economy…Bernanke said a recent rise in prices was driven by a spike in global commodity prices and was unlikely to persist…The Fed releases the minutes of the latest Federal Reserve Open Market Committee meeting at 2 pm New York time…The report could offer further clues on whether the Fed is likely to raise rates in the near term.
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The beatings will continue until morale improves — Republican senators want to know where Obama is getting the money for his high speed rail The Hill (4/4/11) reports: Twenty-two Republican senators are asking President Obama to explain where he would find the revenue to pay for his proposed increase in transportation funding…The Republicans said they hoped the White House would not consider raising the gas tax to offset the costs of the 2012 budget request…”To communicate to our constituents whether or not the $435 billion trust fund represents a large gas tax increase, we respectfully request details on how the Administration calculated the amount of revenue it envisions for the ‘Bipartisan financing for Transportation Trust Fund,’ ” the senators wrote…”As energy prices continue to increase, we are hopeful that this new revenue stream proposed by the Administration would not be a new gas tax on American consumers.”