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U.S. Oil, Gas Producers Express Disappointment Over Administration's Federal Budget Proposal for Energy Department

The Independent Petroleum Association of America (IPAA) is disappointed with the Bush Administration's federal budget proposal that would zero-out all federal funding for oil and natural gas research and development programs at the Department of Energy (DOE).

“The Energy Department is abandoning the future growth of America’s largest and most vital energy resource,” said IPAA President and CEO Barry Russell. “The Administration needs to encourage the development of all viable energy fuels while simultaneously embracing conservation and efficiency measures, but to jeopardize proven home-grown energy solutions like oil and natural gas, is a threat to this country’s energy security, economy and consumer well-being. How can we have an Energy Department that ignores America’s largest source of energy?”

Oil and natural gas account for 65 percent of the nation’s energy supply needs and even with a fivefold increase in renewables like solar and wind over the next 25 years, they would make up less than 1 percent of the total energy mix. The fact remains, that for the foreseeable future, oil and natural gas will be our main fuel source.

“The Department of Energy’s oil and natural gas technology programs are geared towards independent producers, not the major integrated companies,” said Russell. "Eighty-five percent of the Energy Department's research efforts are directed toward independent producers who drill 90 percent of the nation's oil and natural gas wells. These companies are the heartbeat of America’s energy future.”

Senator Jeff Bingaman (D-NM), Chairman of the Senate Energy and Natural Resources Committee, echoed IPAA’s displeasure. According to Sen. Bingaman, “This Administration has a real blind spot when it comes to developing new domestic natural gas resources. The gas that is most available to the consumers who need it is located onshore, and the key players in developing it are independent oil and gas producers. They aren’t big enough to have R&D departments that undertake the research needed to keep our natural gas supplies robust. If DOE walks away from the R&D needed to keep natural gas flowing in an economic and environmentally responsible manner, then consumers will pay through higher prices and working families will pay through loss of manufacturing jobs that depend on natural gas. This is another short-sighted decision that I hope the Congresses reverses.” Significantly, these research and development projects were being managed primarily by universities.

"Maintaining strong university programs to educate the essential engineers and scientists who will become America’s next generation of energy industry leaders is critical. We must foster and nourish the energy minds of tomorrow, not cut-off their resources,” said Russell.

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IPAA is the national trade association representing oil and natural gas producers that drill 90 percent of the nation's oil and natural gas wells. These companies account for 68 percent of America's oil production and 82 percent of its natural gas production.