The People of America's Oil and Natural Gas Indusry

Energy Today - June 29, 2011

Rayola Dougher

Rayola Dougher
Posted June 29, 2011

NOLA.com: Tap the Nation's True Oil Reserve in the Gulf of Mexico: The Obama administration has come under criticism for its decision to drain 30 million barrels from the nation's Strategic Petroleum Reserve, purportedly in an effort to address Libya's unrest and ease prices at the pump. Obama administration is facing criticism for tapping the country's Strategic Petroleum Reserve while there are still obstacles to explore the natural reserves of the Gulf of Mexico. The critics are right. This move was not necessary. Gas prices are trending downward already, and our nation doesn't face an emergency that warrants tapping into the strategic reserve. Just as important, the Obama administration needs to focus on developing our nation's true long-term oil reserve by moving more efficiently to re-establish safe oil exploration and production in the Gulf of Mexico...Using the reserve doesn't always make sense financially for the nation because the oil used has at times been replaced at higher costs. And the modest relief the move will provide for consumers will be short-lived. The best way to protect consumers against price spikes in the long run is to continue expanding oil exploration and production in the Gulf of Mexico and elsewhere. President Obama in May announced his goal to increase domestic oil production. But producers in the Gulf are still complaining that a de facto moratorium imposed after the BP oil spill last year hasn't been fully lifted. The Gulf is our nation's true oil reserve -- and that's what the administration must remember. Fuel Fix Blog: U.S. Energy Policy Key to Lifting Economy, Report Says: America's failure to adopt a long-range energy policy that takes advantage of domestic energy resources is costing jobs and boosting energy costs for consumers, putting further strain on the economy, a non-profit group backed by the energy industry said in a report today. Restrictions on U.S. energy development could cost the country more than 500,000 potential jobs by 2025, while rising energy prices will cost the transportation sector $51 billion more this year than in 2010, according to the report by the Houston-based Consumer Energy Alliance, in conjunction with the National Ocean Industries Association, an industry trade group. "Onerous regulations, endless layers of red tape, restricted access to critical supplies of domestic energy and a lack of direction from government are only a few of the many examples of artificial barriers that paralyze business and make it difficult for America to grow and prosper," said the report, entitled "Energy, Jobs & the Economy: Powering America's Future."

Investor's Business Daily: China Has Its Eye on Canada's Oil: Together, the U.S. and Canada have enough oil and natural gas locked up in shale formations, tar sands, Alaska, the Canadian Arctic and the Outer Continental Shelf to make OPEC pound sand. But we won't drill for ours and apparently, we don't want Canada's. With more than 170 billion barrels, Alberta has the world's third-largest oil reserves, behind only Saudi Arabia and Venezuela and ahead of Russia and Iran. Daily production of 1.5 million barrels from the oil sands is expected to nearly triple to 3.7 million by 2025. The only question is, will this crude be flowing south to U.S. refineries or west for export to China? At issue is the Keystone XL pipeline, parts of which have already been built, that would bring Alberta oil to Texas Gulf Coast refineries. The pipeline also could transport oil extracted from shale formations in the Rocky Mountain West. The U.S. Geological Survey estimates the region, dubbed the Persia of the West, may hold more than 1.5 trillion barrels of oil, six times the proven reserves of Saudi Arabia, and enough to meet U.S. oil needs for the next two centuries. By 2015, oil executives and industry analysts say, the oil-rich lands of the West, including North Dakota's booming Bakken formation, could produce 2 million barrels a day, more than the pre-Deepwater Horizon production rate in the Gulf of Mexico. Michigan's Fred Upton, the Republican chairman of the House Energy and Commerce Committee, estimates the pipeline would create at least 100,000 jobs. So what are we waiting for?

Houston Chronicle: Shale Boom Creates Echo in Lodging: Across cities in sparsely populated South Texas, hotels have no vacancies, small apartment complexes are full, and mom-and-pop RV parks like the Costillas' are popping up (and filling up) seemingly overnight to catch the overflow of oil field workers pouring into the area. The overnight-millionaire money came as mineral rights were leased to oil and gas giants along the 400-mile-long Eagle Ford shale formation, which lies under 24 counties and sweeps from the border across the state to East Texas. But as Eagle Ford production begins in earnest in South Texas, providing housing - and quickly - in sparsely populated counties appears be the next way for the enterprising to profit off of the play. And a ripple effect has created opportunity, in turn, to cash in by providing services for the new residents for everything from cleaning to catering or washing and folding laundry.

Additional Resources:

ExxonMobil's Perspectives: Critics Pile on New York Times' Shale Stories

CNBC: Chesapeake CEO McClendon Defends Natural Gas

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.