The People of America's Oil and Natural Gas Indusry

Energy Today - March 8, 2011

Rayola Dougher

Rayola Dougher
Posted March 8, 2011

Bluefield Daily Telegraph: Punishing the oil and natural gas industry punishes the country: The turmoil in Libya that halted oil shipments from the country for a period has played havoc with oil prices, pushing them above $100 a barrel for the first time since September of 2008 and causing average gasoline prices to edge closer to $4 a gallon. "Traders are concerned about potential loss of supply," Andy Lebow, oil analyst at MF Global in New York told the Wall Street Journal. "We can ill afford the loss of Libyan production." The Middle East is less stable today than in many, many years, and this latest crisis adds yet another serious concern to our nation's domestic hot list. With all of this uncertainty it is especially comforting to know that the White House is on the job. Press Secretary Jay Carney reassured the nation: "When there is unrest in the world, specifically in that region, that can affect oil prices. ... We are closely monitoring that situation but I would not speculate on where oil prices could go." Mr. Carney did not say, but should have said: "We now are beginning to understand why our policies that prevent drilling for our own oil reserves were such a goofy idea." Those policies include a ban on all drilling in the Gulf of Mexico following the Deep Water Horizon explosion, even though serious problems on drilling rigs are rare. It was an ill-considered policy that cost Gulf Coast states thousands of jobs at a time when the country was in the throes of the worst recession in decades, as President Barack Obama told us repeatedly. Another dumb policy is the de facto ban on issuing permits on new drilling projects anywhere in the United States. These policies have combined to put us months behind in bringing oil from existing wells and finding more oil to replace foreign supplies. Forbes: Don't Be Swayed By Faucets On Fire And Other Anti-Fracking Propaganda: Your recent article's out-of-context quotes and glaring half truths suggests that the reporter Ian Urbina had reached his conclusion on the safety of natural gas production long before compiling research or conducting interviews ("Regulation Lax as Gas Wells' Tainted Water Hits Rivers," Feb. 27). Rather than offering readers substantial news on an important issue, Urbina's story simply repackages old information to create sensational and preposterous new accusations against a commodity crucial for our country's energy future. For starters, Urbina's claim that "wastewater [from unconventional gas well fracturing] contains radioactivity at levels higher than previously known, and far higher than the level that federal regulators say is safe for [wastewater] treatment plants to handle" is irresponsibly sensationalized. In fact, standards for NORM (naturally occurring radioactive material) have been observed for years. While many people do not know it, numerous activities, including basic construction such as digging a basement, uncover tailings that contain radioactive materials that naturally occur in the ground. The radiation levels observed in these tailings or at treatment plants do not indicate risks to human health, since, as Urbina notes, radioactivity, "can be blocked by thin barriers, including skin, so exposure is generally harmless." The true threat to human health is from drinking water levels that rise above safe parameters. Urbina's reports admit there is no evidence that this is the case.

Energy In Depth: Third Times the Charm?: NYT gets three chances to post fair, accurate story about natural gas on its front-page - first two failed bad, EID takes a look at #3. It's not every industry in the world that could have survived the heavy ordnance that Ian Urbina dropped on the front-page of The New York Times this past week, with the reporter unloading a three-part series targeting natural gas that earned him plenty of praise from the anti-energy crowd, but something less than glowing reviews from independent observers who track the veracity and perspicuity of science and environmental reporting. A basic evaluation of each of the stories reveals why.

Yahoo Finance: Most Back Oil Drilling Offshore, In ANWR: With the price of gas up 39 cents at the pump in a month and heading higher amid turmoil in much of the Middle East, Americans wonder why the U.S. isn't doing more to exploit its own oil resources. They favor drilling in territorial waters, 67%-29%, according to a new IBD/TIPP poll. That is up from 61%-30% from last May and 64%-25% when Republicans touted drilling in the 2008 election as oil topped $147 a barrel. There's also been a solid shift toward drilling in Alaska's Arc tic National Wildlife Refuge, with support at 54%-40%. That's up from 49%-43% last year. A solid 65%-21% favor tapping federal shale reserves in states like Colorado, Wyoming and Utah, off just slightly from May. "Americans understand we rely heavily on oil imported from the Middle East and the recent events cause concern and uncertainties in their minds," said Raghavan Mayur, president of Technometrica Market Intelli gence, which conducted the poll.

Additional Resources:

The Hill: House Energy subcommittee could move bill to block EPA climate rules Thursday

The Los Angeles Times: Hands off the oil reserve

The Salt Lake Tribune: Senate kills gas tax hike

ABOUT THE AUTHOR

Rayola Dougher is senior economist at The American Petroleum Institute (API), where she analyzes information, manages projects and develops briefing materials on energy markets and oil industry policy issues. She is the author or co-author of economic research studies covering a diverse range of topics including crude oil and petroleum product markets, gasoline taxes, energy conservation and competition in retail markets. In addition to testifying before federal and state legislators, she has participated in numerous newspaper, radio and television interviews on a wide range of issues affecting the oil industry, including crude oil and gasoline prices, industry taxes and earnings, exploration and production, and refining and marketing topics.

Prior to joining API, Rayola worked at the Institute for Energy Analysis where her research focused on carbon dioxide related issues and international energy demand and supply forecasts. Rayola holds a Masters degree in Economic Development and East Asian studies from the American University and a degree in History and Political Science from the State University of New York at Brockport.