The People of America's Oil and Natural Gas Indusry

Energy Tomorrow Blog

analysis  access  energy-exports  energy-supply  oil-and-natural-gas-development  senate  american-petroleum-institute  economic-growth 

Mark Green

Mark Green
Posted May 19, 2015

Solid bipartisan support for important energy legislation is on display in the U.S. Senate, with members of a key committee considering a number of ways to increase access to domestic supplies of oil and natural gas – as well as bills ending 1970s-era restrictions on U.S. crude oil exports.

Energy security is about having secure, reliable energy supplies to fuel broad economic expansion and create opportunity for individual Americans. When we remove outdated export restrictions, allowing U.S. energy to reach global markets, studies have detailed how domestic production will be stimulated – again, creating jobs and economic growth here at home. API Executive Vice President Louis Finkel talks about new legislation offered by Democrat Heidi Heitkamp, similar to legislation offered last week by Republican Lisa Murkowski, that would lift the crude export ban and boost U.S. energy:

“Bipartisan leadership on this issue keeps the focus on the consumers and workers that will benefit from free trade in crude oil. … Study after study shows that lifting outdated limits on crude exports will allow America to create more jobs, cut the trade deficit, grow the economy, and put downward pressure on fuel costs. Exports will help keep U.S. production strong in a tough market, and they will provide our allies with an important alternative to energy from less friendly regimes.”

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analysis  pennsylvania  energy-industry  severance-tax  natural-gas-development  economic-impacts 

Mark Green

Mark Green
Posted May 18, 2015

Sometimes, amid the back and forth of discussions over energy policy, it’s helpful to talk about the real-world impacts of various policy choices.  

Right now in Pennsylvania, a proposed natural gas severance tax that would supersede the state’s existing impact fee is being debated vigorous – chiefly because the current impact fee has been good for the commonwealth, very good.

It’s been so good that some question the wisdom of swapping the current system for a severance tax – especially given a recent study showing that the net effect likely would be less energy development, resulting in billions in economic losses and nearly 18,000 fewer jobs supported by 2025. We’ve likened it to the proverbial folly of killing the golden egg-laying goose.

So, if the current impact fee has been good for Pennsylvania, can we be more specific? Yes.

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analysis  ozone-standards  economic-impacts  american-petroleum-institute 

Mark Green

Mark Green
Posted May 14, 2015

Our new ad lays out key facts about EPA’s move to tighten U.S. ozone standards. Howard Feldman, API’s senior director of regulatory and scientific affairs, talked about the messages in a new multimedia advertising campaign – that stricter ozone standards aren’t necessary because existing standards are making the air cleaner and effectively protecting public health – during a conference call with reporters. Chief points:

Ozone levels are down – Our air is cleaner and continues to get cleaner under 2008 ozone standards – and those aren’t even fully implemented yet. EPA data shows ground-level ozone in the U.S. dropped 18 percent between 2000 and 2013.

“Air quality will continue to improve as we implement the existing standards. Further tightening of the standards wouldn’t necessarily improve air quality any faster, but it could significantly impact U.S. jobs and the economy. … A lower standard could, for little or no health benefit, significantly constrain our nation’s economy and eliminate thousands of jobs.”

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encana  analysis  shale-energy  oil-and-natural-gas-development  unconventional-oil  unconventional-gas  canada  hydraulic-fracturing  horizontal-drilling  economic-growth  investments  technology-innovation 

Mark Green

Mark Green
Posted May 12, 2015

Encana President and CEO Doug Suttles participated in the U.S. Chamber of Commerce’s CEO Leadership Series last week with a luncheon address and a Q&A session with Linda Harbert of the Institute for 21st Century Energy. Highlights of the conversation below. Suttles joined Alberta-based Encana as president and CEO in June 2013. He has 30 years of oil and natural gas industry experience in various engineering and leadership roles. Before joining Encana, Suttles held a number of leadership posts with BP, including chief operating officer of BP Exploration & Production and BP Alaska president.  

Q: You opened your talk by saying I’m a North American energy company. … Can you shed a little light on the differences and similarities between operating in Canada and the U.S.?

Suttles: They’re not as big as many people would think. First of all, in the places we operate – Colorado, Wyoming, New Mexico, Texas, Louisiana and Mississippi, and then Alberta and British Columbia – these are all natural resource states, and they understand that and I think the people and political leaders understand the importance, too. Both countries have high environmental expectations.

Probably the biggest difference you’d really see between them is the remoteness of operations, which creates a unique challenge in Canada. Many of our operations are away from large towns and cities … But you have an environment where I think people understand the benefits of our industry. They promote the industry, they support it.

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analysis  infrastructure  keystone-xl-pipeline  energy-investment  economic-benefits  american-petroleum-institute  jack-gerard  canadian-oil-sands 

Mark Green

Mark Green
Posted May 11, 2015

Vice President Joe Biden underscored the administration’s call for infrastructure spending during a Bloomberg Government event that focused on the country’s deteriorating delivery and transportation systems.

Highlights include: The Washington politics of infrastructure spending is challenging. “The idea that there is a debate on the Hill on the need to invest in infrastructure is mind blowing,” Biden said. The world’s energy epicenter is North America, and the U.S. needs major investments in energy infrastructure. “We will face a national security dilemma” if we don’t enhance our energy infrastructure, he said. Companies need to have certainty that they can get their products to market efficiently.

Let’s pause a moment and consider these valid points on infrastructure from the vantage point of this administration’s crowning infrastructure decision (or non-decision): the Keystone XL pipeline.

In the Keystone XL, the administration has had the opportunity – for more than six years – to green light $5.4 billion in private infrastructure spending that would create jobs, boost the economy and transport oil from Canada and the U.S. Bakken region – reliably and safely – to our Gulf Coast refineries, enhancing America’s energy security. All with the simple stroke of the president’s pen.

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analysis  pennsylvania-severance-tax  oil-and-natural-gas-development  shale-energy  tax-revenues  economic-impacts  production 

Mark Green

Mark Green
Posted May 7, 2015

The oil and natural gas industry’s recent tax revenue and economic contributions to the Commonwealth of Pennsylvania look like this: more than $630 million through the state’s existing local impact fee since 2012, including $224 million in 2014 alone; more than $2.1 billion in state and local taxes; annual contributions to the state economy of $34.7 billion, boosting the bottom lines of more than 1,300 businesses in the energy supply chain.

Gov. Tom Wolf, who has proposed new industry taxes, says the state is “getting a bad deal.” We suspect a lot of states would like to have things so rough.

Nevertheless, the governor is pushing for an additional natural gas severance tax of 5 percent on the gross market value of production, plus a fixed fee of 4.7 cents per thousand cubic feet (Mcf) produced. The governor also wants an artificial floor of $2.97 per Mcf regardless of the actual price of natural gas. All suggest unfamiliarity with the story of the goose that laid golden eggs.

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analysis  american-energy  infrastructure  pipelines  regulation  arctic  ethanol  renewable-fuel-standard 

Mark Green

Mark Green
Posted May 7, 2015

Oil & Gas Journal: North American businesses and governments must work together toward the collective goal of advancing the continent’s energy aspirations. That was the message delivered by producers and government officials during a May 5 panel discussion at the Offshore Technology Conference in Houston.

The US and Canada represent two of the world’s top five oil producers, and Mexico hopes to ramp up its production in the coming years once its energy reforms are fully realized.

Gustavo Hernandez Garcia, general director of Petroleos Mexicanos (Pemex), said a primary challenge faced by his country is rising technical commercial complexity including deepwater, heavy oil, unconventional, and LNG. To attract the players capable of developing these resources, Mexico must offer attractive contractual and fiscal terms; transparent and clear roles for regulators and operators; an agile and competitive national oil company; and minimal political intervention, he said.

Pemex benefits from its geographic proximity to major producers and their unique skillsets in the US. Paula Gant, deputy assistant secretary for oil and natural gas in the Department of Energy’s Office of Fossil Energy, said there’s “a tremendous need” to build on public data, statistics, and mapping in North America; for modern and resilient infrastructure; and for best practices for unconventional oil and gas.

Gant emphasized the necessity of constant and clear communication among government agencies in the three countries, and boasted that the US is “the envy of the world” with its existing natural gas pipeline system. Building out infrastructure and sustaining output growth in the US also relies on public confidence, she noted, adding that the office of oil and gas at DOE “provides scientific base from which politicians can make decisions.”

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analysis  crude-oil  crude-markets  energy-exports  economic-benefits  oil-and-natural-gas-production  encana  american-petroleum-institute 

Mark Green

Mark Green
Posted May 6, 2015

The opportunity to stimulate increased domestic production of oil and natural gas, create jobs, spur the economy and enhance America’s ability to positively shape world events is at hand – waiting only on the stroke of a pen. Lifting the United States’ four-decades-old ban on crude oil exports could help advance all of the above, and it all could be launched with the stroke of a pen.

Encana President and CEO Doug Suttles and API President and CEO Jack Gerard emphasized the relative ease with which the 1970s-era export ban could be ended, as well as the building political momentum for action, during a conference call with reporters.

Gerard said the ban could be lifted through the exercise of presidential authority or by the president signing legislation from Congress. Gerard:

“There is a consensus building in the country. We see strong bipartisan support in the House and now rolling in the Senate. So overall, we think the momentum continues to build as people better understand all of the issues. … Job creation, benefit to our trade imbalance, revenues to government, lowering the price at the pump. … It’s just a matter of time now before that pen is deployed to allow this to happen.”

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analysis  transportation  crude-oil  federal-government  regulations  american-petroleum-institute  jack-gerard 

Mark Green

Mark Green
Posted May 5, 2015

During months of public discussion of improving the safety of transporting crude oil by rail, we’ve stressed the need to let science and fact-based analysis guide development of a holistic strategy that would have the best chance of producing tangible safety benefits.

Unfortunately, new rules published last week by the Transportation Department – featuring requirements for sturdier tank cars and electronically controlled pneumatic (ECP) brakes – are a mixed bag that will do little to prevent derailments in the first place.

Instead of working to ensure the integrity of the tracks and to eliminate human error as much as possible, both of which would help prevent accidents from occurring, it seems federal officials at times opted for the optics of appearing to make progress. In the case of the ECP brakes, it’s a technology that experts say doesn’t significantly improve safety – which is the goal. To add to the 99.99 percent safety record in the transport of hazardous materials by rail, a more comprehensive approach that focuses more attention on prevention is needed.

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analysis  oil-and-natural-gas-development  colorado  economic-impacts  american-petroleum-institute  regulation 

Mark Green

Mark Green
Posted May 4, 2015

The Colorado Petroleum Council and its new executive director, Tracee Bentley, recently opened a new office in Denver, where the council will focus on growing energy priorities in the state. A Colorado native, Bentley served as Gov. John Hickenlooper’s legislative director and senior advisor on energy and agricultural issues before coming to API. Below, Bentley talks with Energy Tomorrow about opportunities and challenges facing the council and her role as the organization’s leader.

Q: What do Coloradoans think about the state’s energy potential? Is it something people are aware of, and what do you believe they want most from industry as it develops that energy? What are the key “education” points needed to build a strong partnership between industry and Coloradoans?

Bentley: Coloradans know their state is blessed in terms of energy.  And they’re aware of the importance of energy development to the state’s economy. Even with the recent downturn, oil and natural gas development remains a crucial contributor economic growth, adding $26 billion to the state economy and supporting 213,100 jobs – or nearly 7 percent of total state employment. School districts in Colorado received nearly $202 million from oil and gas production property taxes in 2012 alone, according to a study conducted by the University of Colorado Boulder’s Leeds School of Business.

Coloradoans want the same things people in other energy-producing states want. They want assurances that development will be safe, and that operators will hear and respond to their concerns. The Colorado Petroleum Council helps this relationship by providing factual information on safe energy development. One of our priorities is to demystify things like hydraulic fracturing. We’re here to explain it and to reassure communities and individuals that it has been going on for decades, is an advanced, precise technology and that the combination of state regulations and industry standards is keeping energy development safe to residents, water supplies and the local environment.

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