The People of America's Oil and Natural Gas Indusry

Energy Today - March 21, 2011

Rayola Dougher

Rayola Dougher
Posted March 21, 2011

New York Post: Frack, baby, frack!: In three months, a statewide ban on all natural gas drilling comes to an end. But will Gov. Cuomo allow developers to begin tapping the rich Marcellus Shale -- and thus not only help allay New York's energy woes but also boost the upstate region's ailing economy? Then-Gov. David Paterson issued the moratorium last December after vetoing a bill that would have extended an existing ban on hydraulic fracturing, aka hydrofracking, in which water and chemicals are injected into rock formations to release natural gas. Hard-core lefties and environmental groups say the process -- which is banned only in New York -- contaminates groundwater. But those claims are refuted by the official state geologist, who calls them "exaggerated" and says he's found no evidence of such contamination in three years of study. Fort Worth Star-Telegram: With abundant availability of natural gas, the time for drilling has come: Once again, shocking news has nations rethinking their energy policies. In Japan, a nuclear power disaster has put millions in danger, prompting some to reconsider nuclear expansion. In North Africa, uprisings have sent oil prices soaring. Last year, a deep-water explosion spewed oil into the Gulf of Mexico for months and led to a government moratorium on exploration. But in Fort Worth, the pioneer in urban gas drilling, the natural gas business is booming as usual. Production has soared in the past decade, without any catastrophes or major setbacks so far. Opposition remains strong in some areas, but residents and operators have found common ground, and as more people get used to the industrial activity, many concerns have eased. Consider how a four-month debate over drilling near public schools came to a head last week: Fort Worth trustees decided that drill sites must be 1,200 feet from schools, twice as far as the city standard. That's it -- no major overhauls, no moratoriums, no being roiled by world events. After roughly a decade of drilling in the Barnett Shale, the latest oversight adjustment came down to bumping the setback by 600 feet.

ShopFloor.org: Issuing Only Three Permits for Offshore Drilling is Not Enough: This afternoon, the Department of Interior issued a deepwater permit to ATP Oil & Gas Corp. to resume drilling 90 miles south of Venice, Louisiana. The project was put on hold by the drilling moratorium. Although this is a good step forward by the Interior, the permitting process is still slow and more permits need to be issued. During a time when the price of gas at the pump continues to rise, companies waiting for permits should be allowed to go back to drill in the Gulf of Mexico. Currently, a number of companies are keeping their rigs "warm" by continuing to pay for their leases and maintaining a skeletal group of workers so that they can immediately return to drilling when they receive their permits from Interior. These companies can incur costs up to $1 million a day while their rigs sit idle. Offshore drilling is a significant part of the U.S. economy. As Scott Angelle, Secretary of the Louisiana Department of Natural Resources, noted in his testimony this week, one third of our nation's domestic production comes from the Gulf, and nearly 90% of that production is from deepwater drilling. Furthermore, drilling in the Gulf directly impacts nearly 16,000 companies and 153,000 employees.

Bloomberg: U.S. Fuel Demand Climbed in February as Economy Grew, API Says: U.S. fuel demand rose in February as economic growth bolstered gasoline and diesel use, according to the American Petroleum Institute. Total deliveries of petroleum products, a measure of demand, climbed 4.4 percent to 19.7 million barrels a day last month from a year earlier, the highest February total in three years, the industry-funded group said today in a report. Gasoline consumption increased 4.2 percent to 9.01 million barrels a day from the same month last year. "It looks like we've turned a corner, and it's showing up in fuel deliveries," John Felmy, chief economist with the Washington-based API, said in a telephone interview. "The gasoline number is especially encouraging because it's closely tied to retail sales. We also continue to see strong demand for low-sulfur distillate and jet fuel."

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.