Independent Producers Providing for America’s Energy Future

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Jeff Eshelman / Julia Bell
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For Immediate Release
February, 3 2012

WASHINGTON – This past week has been nothing short of eventful for America’s energy producers. On the heels of President Obama’s State of the Union call for an expansion of American energy development, members of industry, media, and the public are waiting anxiously to see if the walk will match the talk. But while we wait to see the President’s call will come to fruition, this past week brought with it a glimpse into the crystal ball of what is to come.

On Capitol Hill, good news seemed abound. The House Natural Resources Committee passed three bipartisan American energy bills Wednesday which stand to create 1.2 million jobs, enhance domestic energy production, and boost the security of our homegrown natural resources. Included in the bills are requirements to advance new offshore energy production through new lease sales in areas of the Atlantic and Pacific coasts as well as portions of the eastern Gulf of Mexico. The Secretary of the Interior would also be required to conduct oil and gas lease sales in the Gulf of Mexico, Alaska, and Virginia and set clear guidelines for the development of U.S. oil shale resources to promote hydraulic fracturing and horizontal drilling technologies.

As E&E News reports:

“‘This Republican jobs plan opens access to American energy resources, creates new jobs, brings certainty for small businesses that depend on affordable energy and generates new revenue that can be used to build roads and infrastructure projects to create even more American jobs,’ said committee Chairman Doc Hastings (R-Wash.). ‘Unlocking our nation’s energy resources starts a wave of economic benefits and job creation that will positively touch nearly every aspect of our economy.’” (2/2/12)

Yet on the regulatory side, barriers to development stood aground, reinforcing long-standing roadblocks for our independent producers. Today, the Bureau of Land Management (BLM) curtailed plans that would open 2 million acres of public lands for oil shale development in Colorado, Utah, and Wyoming. And the Environmental Protection Agency (EPA) is showing no signs of slowing down on creating additional regulations on the industry by moving forward with defining guidelines surrounding hydraulic fracturing.  As Independent Petroleum Association of America’s (IPAA) Vice President Lee Fuller noted in Bloomberg, “This effort to federalize fracking can create enormous delays,” forcing states to delay drilling and placing permitting in the hands of the EPA, an organization that does not have the capacity or structure to process these claims.

It is imperative that our government-from regulatory bodies to the White House-forge a path of support for our nation’s domestic energy future.  As IPAA President and CEO Barry Russell stated in the National Journal:

“It is crucial that the Obama administration recognizes the truly amazing benefits of a healthy oil and natural gas industry to jobs, a vibrant manufacturing sector, and renewed economic growth. IPAA stands ready to work with the President on empowering the states to continue their responsible regulation of the industry. After all, without a vibrant American oil and natural gas industry – it’s impossible to have an ‘America built to last.’” (2/1/12)

Independent producers are responsible for 95 percent of our domestic oil and gas wells, producing 68 percent of domestic oil and 82 percent of domestic natural gas.  Of profits gained, 150 percent of their domestic cash flow is put back into domestic oil and natural gas development.  This is the real dedication to American energy that is creating tangible benefits for our nation.

And the benefits couldn’t be clearer.  Here are some of the headlines from around the nation this week:

  • US on brink of strong oil, gas growth, Senate panel told‎. “‘When you look at global oil and gas investment, the US has been the key destination in the last 10 years,’ {Roger Diwan, partner and head of financial advisory operations at PFC Energy} said. ‘The global industry is making money all over the world, and investing it in the US. The scale of the opportunity to increase US oil production is greater than in most other countries over the next decade, noted James Burkhard, managing director of IHS CERA Inc.’s global oil group. (Oil & Gas Journal1/31/12)
  • Wary OPEC Highlights Dangers of Shale Revolution‎. Could it be that OPEC, which produces just over a third of the world’s oil, is beginning to see a threat in the new technology that is releasing huge deposits of gas and oil trapped in shale rock beneath the feet of some of its biggest customers? (Wall Street Journal2/3/12)
  • Oil Patch Bucks Income Drop. A new study reflects a stark divide in economic fortunes across the country, with 38 states seeing household income decline during the period from recession to recovery, while the remainder reported gains, propelled by petroleum, shale and other energy commodities. (Wall Street Journal2/2/12)
  • Fracking Boom Could Finally Cap Myth of Peak Oil. The U.S. oil market could be on the verge of its own fracking revolution, similar to what the natural-gas market is already experiencing. As a result, domestic production is now projected to rise significantly over the coming decades, reducing the relative share of imports in U.S. oil consumption. (Bloomberg, Peter Orszag1/31/12)
  • Rigell steps up pressure to allow offshore drilling‎. Virginia lawmakers in Washington again are pushing for oil and natural gas drilling off the state’s coast, especially after President Barack Obama announced he wants more domestic production of fossil fuels on land and beneath the Gulf of Mexico. U.S. Rep. Scott Rigell, R-Virginia Beach, intends to introduce legislation this week that would force the Department of the Interior to sell leases to energy companies wanting to drill for oil and gas at least 50 miles off the Virginia coast. The bill calls for leasing to begin within one year of passage. (The Virginian-Pilot, 2/2/12)