Jumping Hurdles: America’s Independent Producers Making Strides Towards Energy Security

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Jeff Eshelman / Julia Bell
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For Immediate Release
January, 20 2012

WASHINGTON – American jobs. Economic recovery. National security. Three “buzz terms” often used to describe the benefits of a prolific energy outlook for our nation. But are they real? Do they carry the weight we so often subscribe to them? The fact is-they absolutely do.

The start of the new year has marked a historical moment in America’s newfound energy outlook. For the first time in recent history, an American state has surpassed an OPEC member nation in oil output. North Dakota, a state blessed with vast oil and gas reserves like the Bakken Shale, increased production by 42 percent to an output of 510,000 barrels a day in November-surpassing Ecuador’s November output by 10,000 barrels. Job growth? At the close of 2011, America’s energy industry had one of the lowest unemployment rates in the nation. The current unemployment in Williston-North Dakota’s oil capital-is less than 1 percent. According to a report by IHS CERA, the shale gas industry alone supported more than 600,000 jobs across the nation. No longer just talking points for the campaign trail; these are the real and tangible realities of America’s energy future.

And despite the clear and overwhelming evidence about the powerful economic and energy security impact that America’s independent oil and natural gas producers continue to have, detractors remain. Nonetheless, the Independent Petroleum Association of America (IPAA) is working tirelessly to ensure that facts – not hyperbole – serve as the foundation of our dialogue:

IPAA President and CEO Barry Russell:

  • Call Off Federal Overreach for Success: America’s natural gas industry has quite a future – as long as it’s not impeded by politically motivated forces. The administration must make its campaign rhetoric a reality and call off its massive federal overreach. If states remain empowered to continue their responsible regulation of hydraulic fracturing, natural gas will certainly power America’s future. (National Journal, 1/18/12)

 

IPAA Vice President of Economics & International Affairs Frederick Lawrence:

  • America and the global energy supply: America has notably reduced its dependence on imports (net imports fell from 57 percent in 2008 to 45 percent in November 2011) and in addition significantly increased its domestic production (adding 1.2m barrels per day between October 2008 and October 2011) with the help of independent producers and shale and other sources. So America is buying considerably less of its oil than it used to from unsavory producers. However, petroleum imports from the Persian Gulf still account for almost 15 percent of our total imports (1.8m bpd) and as you noted, oil is a “globally traded commodity”, so ripples in Europe or Asia from interruptions in Iraqi, Egyptian, Libyan, or Iranian crude do ultimately lap our shore and dampen our market recovery. (The Economist, 1/14/12)

 

  • America out of touch with geopolitical realities of oil: Venezuela crude is just as sour and heavy and so are the politics behind moves to expropriate US and European private sector assets and withdraw from the World Bank’s International Centre for Settlement of Investment Disputes. While Venezuelan rule of law continues to wane, US energy policy continues to neglect our country’s economic health and national security. US domestic supplies grow apace but, given the rising risks of geopolitics in today’s market, we should be a bit more attuned to the realities of supply, demand, jobs and allies in picking our importers. (Financial Times1/20/12)

 

And it appears our voices are being heard. While at many a crossroads the current administration has put up roadblocks to development for our independent producers, a recent report from the White House, “Investing in America: Building an Economy That Lasts,” sheds a glimmer of hope that perhaps our message is finally clear: Developing our nation’s domestic oil and gas reserves provides real benefits to our nation and our citizens.  And further, the President’s Job Council called for a common sense, “all-in” plan for American energy. The Oil & Gas Journal reports:

  • “As a nation, we need to take advantage of all our natural resources in order to spur economic growth, create new jobs, and reduce the country’s dependence on foreign oil,” the report said. … This president is committed to an ‘all-of-the-above’ approach in our energy development, which means increasing production here at home, a focus on natural gas and its importance for our energy future, as well as investments in clean energy,” White House Press Sec. Jay Carney said during his Jan. 17 daily briefing. He noted that the US Department of Interior’s Dec. 14, 2011, offshore lease sale covered more than 21 million unleased Gulf of Mexico acres, while an onshore lease sale in the National Petroleum Reserve-Alaska offered more than 140,000 acres. “The point of this is that we’re absolutely committed to increasing domestic oil and gas production, but to do it in a safe and responsible way,” Carney said.

 

Our independent producers had to overcome tremendous hurdles to raise our nation out of an economic downturn, catalyze job growth, and produce energy at historical levels. As states like North Dakota are clearing their hurdles, other regions of the country are just running up to theirs.  In the Gulf Coast, producers are still fighting to increase production as lower offshore permitting has cost Americans not only around the coast, but across the country. Onshore, we continue to fight for state regulation for the safe and responsible development of our onshore natural gas reserves.  But a good review from the White House is heartening to hear, however unexpected it may be.

As the Wall Street Journal editorialized this week, “To the best of our knowledge, this is the first time the White House has favorably mentioned the Marcellus Shale, the natural gas reservoir below Pennsylvania, West Virginia and other Northeastern states. And now he’s taking credit for this soaring production.”

While the President may take the credit, our independent producers stand ready at the mark to deliver the domestic energy our nation needs today and for decades to come.