Testimony

Testimony Mar 6, 2024
Submitted testimony of Daniel T. Naatz, Chief Operating Officer and Executive Vice President of the Independent Petroleum Association of America (IPAA) regarding the House of Committee on Natural Resources Subcommittee on Energy and Mineral Resources Legislative Hearing on H.R. 7375 and H.R. 7377 on the afternoon of Wednesday, March 6, 2024.

Good afternoon, Chairman Stauber, Ranking Member Ocasio-Cortez, and members of the Subcommittee on Energy and Mineral Resources. My name is Dan Naatz. I am the Chief Operating Officer of the Independent Petroleum Association of America (IPAA), and I am here today to testify in support of H.R. 7375 sponsored by Representative Hageman, and H.R. 7377, the “Royalty Resiliency Act” sponsored by Representative Hunt. …

I want to thank the Chairman for holding this hearing today on two commonsense legislative proposals that will positively impact IPAA members who operate on federal lands. H.R. 7375 and H.R. 7377 bring much-needed changes and clarifications to the leasing and royalty gathering process for oil and natural gas exploration and development activities on federal lands, providing great equitability to the lessees. …

Letters and Comments, Testimony Mar 8, 2023

Dear Chairman Westerman,

The Independent Petroleum Association of America is pleased to support H.R.1335, the Transparency, Accountability, Permitting, and Production of American Resources Act, referred to as the TAPP Act. …

IPAA believes that many of the reforms laid out in the TAPP Act will help to revitalize oil and gas production on federal lands and waters to the benefit of the nation. The “multiple-use mandate” provided in the Federal Lands Policy and Management Act (FLPMA) requires the BLM to balance the resources and uses of public lands to the benefit of the people. While this mandate includes far more than oil and gas production, it does not include less and IPAA believes that safe and responsible development for our resources needs to remain part of the equation.

There are several commonsense reforms in the TAPP Act that will lend to increased certainty for our members and will ultimately lead to a more streamlined process for federal oil and natural gas development. While IPAA is supportive of the bill in its entirety, there are a few key provisions that will be particularly impactful to independent producers on federal lands. IPAA supports the directive to require the Secretary of the Interior to resume quarterly lease sales. IPAA also believes it is important to include in a sale all parcels that were nominated and eligible for lease under the resource management plan of each state. IPAA also strongly supports the additional language on suspension of operations permits. Furthermore, IPAA strongly supports the language included for two region-wide annual lease sales in the prescribed offshore areas. …

Letters and Comments, Testimony Mar 8, 2023

Dear Chairwoman McMorris Rodgers and Ranking Member Pallone,

The Independent Petroleum Association of America is pleased to support the package of energy bills being marked up today by the committee. We would also like to express our gratitude that such an important issue, America’s energy production, is a priority for this Committee and Congress. I would like to make specific reference to a couple of pieces of legislation.

First, H.R. 1121, the “Protecting American Energy Production Act” sponsored by Congressman Duncan. …

IPAA also supports H.R. 1141, the “Natural Gas Tax Repeal Act” sponsored by Congressman Pfluger. …

We also support legislative efforts to bring efficiency and certainty to liquified natural gas (LNG) infrastructure and export terminals. …

Again, I want to thank the Committee and its Members for their interest in our industry.

Respectfully,

C. Jeffrey Eshelman, II

President & Chief Executive Officer

 

Testimony Feb 28, 2023

IPAA thanks Chairman Westerman, Chairman Stauber, and Representative Graves for the thoughtful reforms outlined in the Transparency and Production of American Energy Act of 2023 (TAP Act). Many of the reforms outlined in the TAP Act will help to revitalize oil and natural gas producers operating on federal lands and waters to the benefit of the nation. The “multiple-use mandate” provided in the Federal Lands Policy and Management Act (FLPMA) requires the Bureau of Land Management (BLM) to balance the resources and uses of public lands to the benefit of the American people. While this mandate includes a variety of uses beyond oil and natural gas production, it clearly is not intended to prevent the production of American oil and natural gas. IPAA believes that safe and responsible development of the nation’s natural resources needs to remain an integral part of the equation.

Currently, of the 640 million acres of land that are federally owned in the United States, roughly four percent are leased for oil and natural gas development. Yet, even with this small percentage, oil and natural gas still have an enormous monetary impact for the federal treasury. All federal oil and gas royalty, rental fee, and bonus bid revenue is split roughly half between the U.S. Treasury and the states where development occurs. That revenue helps fund critical investments in communities across the United States and supports jobs, schools, conservation efforts and infrastructure projects. The amount of annual revenue that Federal mineral development provides to the U.S. Treasury is second only to that provided by the Internal Revenue Service. (Bureau of Land Management)

There are several commonsense reforms in the TAP Act that will increase certainty for American producers and will ultimately lead to a more streamlined process for federal oil and natural gas development. While IPAA is supportive of the bill in its entirety, there are a few key provisions that I would like to highlight in my testimony this morning. …

Testimony Feb 16, 2023

IPAA Board Chairman Steven Pruett, the President & CEO of Midland-based Elevation Resources, testified in a House Energy & Commerce Committee Energy, Climate, and Grid Security Subcommittee field hearing in Midland, Texas: “American Energy Expansion: Improving Local Economies and Communities’ Way of Life.”

In his testimony, Pruett discussed three factors limiting growth in U.S. oil & natural gas production: the impact of regulatory uncertainty, permitting delays, and labor and supply chain shortages.

Testimony Feb 7, 2023

I am Jeff Eshelman, President and CEO of the Independent Petroleum Association of America (IPAA). I would like to thank Chairman Duncan and Chairman Johnson and all the members of the Energy and Commerce Committee for holding this important hear today…

IPAA supports the committee in its efforts to pass legislation that will increase American energy production, lower energy costs, strengthen domestic supply chains and protect America’s energy grid. The various pieces of legislation being considered today will move the nation forward in our effort to enhance and strengthen American energy security. The Energy and Commerce Committee should be commended for these efforts.

Although IPAA supports all legislative efforts to enhance American energy and security, we would like to especially focus on two pieces of legislation being considered by the Committee today. First, IPAA strongly supports H.R. 150, the “Protecting American Energy Production Act” sponsored by Congressman Duncan. This legislation prohibits the President from declaring a moratorium on the use of hydraulic fracturing unless Congress authorizes such a prohibition. The bill also expresses the sense of Congress that states should maintain primacy for the regulation of hydraulic fracturing for oil and natural gas production on state and private lands. …

IPAA also supports H.R. 484, the “Natural Gas Tax Repeal Act” sponsored by Congressman Pfluger. This legislation would strike language designed to establish a tax on natural gas imposed on America’s independent oil and natural gas producers as part of the “Inflation Reduction Act” passed by Congress last year. …

Testimony Jan 10, 2023

On Tuesday, January 10, 2023, IPAA President and CEO Jeff Eshelman participated in a roundtable hosted by House Energy and Commerce Committee Republicans, led by Chair Cathy McMorris Rodgers (R-WA), to discuss the impacts of unaffordable energy costs.

Good morning. Thank you Chair McMorris-Rogers and members of the committee and staff. I’m Jeff Eshelman, president and CEO of the Independent Petroleum Association of America, a trade group, founded in 1929, that represents companies that explore for and produce the majority of natural gas and oil in the United States.

Before I tell you more about America’s independent natural gas and oil producers, and their importance to the nation’s energy supply, I want to thank you for holding this roundtable to discuss the affordability and reliability of energy costs for American consumers.

By scheduling this roundtable today — among one of the first actions of the 118th Congress — you are sending a clear signal that U.S. energy policy is a priority for the new House of Representatives. And I want to thank you for this. …”

Taxes, Testimony Apr 27, 2021

IPAA submitted testimony for the Senate Committee on Finance April 27, 2021 hearing titled “Climate Challenges: The Tax Code’s Role in Creating American Jobs, Achieving Energy Independence, and Providing Consumers with Affordable, Clean Energy.

“…Oil and natural gas tax policies will continue to draw attacks from those anti-oil and natural gas factions that want to cripple American production. Much of the rhetoric surrounding these attacks will hide behind the red herring of “tax subsidies for Big Oil” when the reality is that the tax provisions are not “subsidies’ but normal business deductions. The impact of changing the provisions will fall on independent oil and natural gas producers, substantially on small businesses, and on royalty owners such as retirees, ranchers and farmers who own oil and natural gas mineral resources underlying their properties…”

Taxes, Testimony Apr 22, 2021

For an April 22nd Oversight and Government Reform Committee Subcommittee on the Environment hearing, IPAA submitted testimony on the tax treatment of the natural gas and oil production industry.

“… a troubling undercurrent of effort to suppress American oil and natural gas production appears directed at numerous factors that affect production. Among these is a false claim of “tax subsidies” for oil and natural gas production that are, in fact, normal business deductions…

“One path [supported by anti-oil and natural gas interests] to reducing American oil and natural gas production involves restricting its capital investment. Because all oil and natural gas production declines – or depletes – over time, new production must replace the lost production. New wells must be drilled. Existing wells must be maintained even as their production diminishes. For independent producers, most of its capital comes through the well head. That is, the revenue it receives from selling its production becomes the capital it needs to drill and maintain wells. Clearly, tax policy then plays a significant role. Taxes remove capital.

“Oil and natural gas tax policies will continue to draw attacks from those anti-oil and natural gas factions that want to cripple American production. Much of the rhetoric surrounding these attacks will hide behind the red herring of “tax subsidies for Big Oil” when the reality is that the tax provisions are not “subsidies’ but normal business deductions. The impact of changing the provisions will fall on independent oil and natural gas producers, substantially on small businesses, and on royalty owners such as retirees, ranchers and farmers who own oil and natural gas mineral resources underlying their properties.

“Two of the most targeted tax provisions are the treatment of intangible drilling and development costs (IDC) and percentage depletion…

“If new policies reduce American demand for oil and natural gas, production and imports will diminish. However, artificial politic efforts to suppress American supply will not reduce demand; it will only lead to a return to an import dependent energy structure with attendant energy security risks.

“False attacks on “tax subsidies” targeting American oil and natural gas producers and royalty owners will reduce supply while hurting independent producers, particularly small businesses, and royalty owners. They will not reduce greenhouse gas emissions. The ultimate beneficiaries of these actions would be foreign national oil companies producing with less emissions management than those in the United States. Congress should oppose these adverse policies.”

Testimony Apr 15, 2021

IPAA submitted testimony on the CLEAN Future Act, a 981-page bill described by the Democratic leadership of the House Energy and Commerce and Committee as “ambitious new climate legislation that ensures the United States acts aggressively to tackle the climate crisis this decade and achieve net zero greenhouse gas pollution.” The bill is far reaching, with decarbonization efforts spanning from infrastructure modernization to funds for workers.

In the testimony, IPAA addresses a number of provisions in the CLEAN Future Act that directly affect oil and natural gas production, many of which have no relationship to reducing greenhouse gases. IPAA has been at the forefront of advocating on these issues for many years and will continue to lead the industry in the fight against the misguided policies outlined in this legislation.
The testimony comments break down:
  • Sections of the legislation unrelated to the state objective of the CLEAN Future Act – These include changes to the carbon dioxide enhanced oil recovery (EOR) process without an evident environmental benefit; expanding the Safe Water Drinking Act (SWDA); changes to the Clean Air Act that expand regulated pollutants; and expand Resource Conservation and Recovery Act (RCRA) waste definitions. In his testimony, IPAA EVP Dan Naatz details how taken together, these sections do not comport with the objectives of the CLEAN Future Act. Instead, they are wedged into the bill solely to reduce or prevent the development of American oil and natural gas. “Sections 621 and 623 create unnecessary burdens on state programs to implement new requirements without any justification. Sections 624 and 625 regurgitate the same stale, unjustified proposals that have been shopped by ardent anti-oil and natural gas environmentalists for years. The Committee, the House and the Congress should reject all of them.”
  • Super Pollutant Provisions – The CLEAN Future Act contains provisions that address methane or carbon dioxide emissions from oil and natural gas production operations that generate unworkable outcomes. These sections of the legislation create an unrealistic burden on states and set technology requirements that may or may not result in desired emissions reductions.
  • Carbon Dioxide Geologic Sequestration – IPAA supports the funding authority in Section 502 to provide for state permitting of Class VI underground injection wells.