Friends of Fracking and Natural Gas

Perhaps as important as the president of the United States acknowledging the importance of natural gas and hydraulic fracturing to America’s energy present (and future) is a sense that such support is pretty far and wide. Here’s a quick roundup of some notable friends of natural gas – affordable, abundant and creating jobs all across the country – with a nod to Energy In Depth’s Steve Everley for help in corralling the links.

U.S. Sen. Sherrod Brown, D-Ohio:

“Shale development means economic development, and that’s exciting news for Ohio. It means tens of thousands of good-paying jobs across our state, all while helping to lower power costs for Ohio consumers. … We know that Ohio is home to countless innovative companies and a world-class workforce—now we need to ensure that energy companies arriving in the state are utilizing all that Ohio has to offer.”

Deputy Energy Secretary Daniel Poneman:

“The natural gas boom in the United States offers a tremendous opportunity to strengthen American energy security by drastically reducing our dependence on imported oil, while at the same time creating new U.S. jobs and industries. This is precisely why President Barack Obama is committed to safely and responsibly harnessing American oil and gas resources, and to developing the technologies that will unlock new domestic energy sources.”

U.S. Rep. Mike Ross, D-Ark.:

“I’m a firm believer in natural gas. It already supplies almost one-fourth of all energy in the U.S. and we’re discovering more natural gas reserves every day thanks to newer, safer drilling techniques and technologies. Better yet, more than 98 percent of natural gas comes from right here in North America. … With the Fayetteville Shale in the northern part of (Arkansas) and the Haynesville Shale in the southern part, we have an abundant supply of clean, affordable energy to offer the world.”

Natural gas and fracking have support from strong environmentalists including …

U.S. Sen. Ron Wyden, D-Ore.:

“This is what I tell environmental folks: Natural gas is really important to a lot of renewables, solar and wind, ensuring that option is out there. … Natural gas is the cleanest of the fossil fuels, so you start with that as your basic proposition.”

U.S. Rep. Edward Markey, D-Mass.:

“I think environmentalists should want natural gas on the table as an option. When coal is also going to be considered for new electrical generation or an extension of the life of an existing coal-fired power plant, I think it would be wise for us to not take natural gas off the table.”

Gov. John Hickenlooper, D-Colo.:

“Like any industrial process, fracking has some risks but, really, if done properly, certainly out in the West, there is literally no risk — certainly much less than many industrial processes. … I love open space and wilderness, but we all drive cars, right? And we all need energy. We recognize that, along with education, energy is the other necessary component to lifting people out of poverty.”

That last point is so important. Energy development is the difference between modern and primitive civilization – facilitating greater freedom, mobility and opportunity for better, healthier lives.

Candidly, the choice offered by some opponents of natural gas and hydraulic fracturing isn’t between more responsible development and less; it’s between responsible development and NO development. It’s an extreme choice. As energy blogger Steve Maley posted a few weeks ago, “If you’re not a fan of natural gas you’re a fan of mud huts.”

The right choice is to safely and responsibly develop a resource that can play a major role in securing America’s energy future.

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EPA’s Costly, Unnecessary Soot Proposal

EPA continues to act tone deaf to the real-world needs of U.S. businesses and regular Americans. Its particle standards proposal issued this week is a good example of the kind of investment-squelching overregulation that ultimately could hurt the country’s energy future.

With the country’s air continuing to improve under the existing fine-particle soot standard, EPA proposed tightening it. The rule is scheduled to be finalized in December. Howard Feldman, API’s directory of regulatory and scientific affairs, says the rule’s benefits aren’t worth its costs:

“Air quality will continue to improve dramatically under the current government standards, but EPA’s proposal could substantially increase costs to states, municipalities, businesses and ultimately consumers without justified benefits. We are concerned that it could come at a significant economic cost and lost investments and limit our ability to produce the energy our nation needs.”

Between 2000 and 2010 concentrations of fine-particle soot fell by 27 percent, according to EPA. Feldman says three-fourths of Americans today live in areas where air quality meets today’s standards, and that the trend will continue – which suggests the new standard is unnecessary.

Feldman also says EPA based its proposal on “faulty scientific analysis,” that important data have been ignored and some of its purported findings are actually misinterpretations. How tightly the standards are set is a policy judgment. Because there is no bright line to guide the standard setting, the impacts of the standards matter. Feldman:

“A more stringent rule will discourage economic investment in counties that fail to meet new federal standards.  It’s in our interest to have both clean air and a vibrant domestic economy. However, the new standards would put many regions out of attainment, and companies considering a place to build a plant or refinery could perceive non-attainment as non-investment.”

Again, in the context of an economy trying to regain its footing, EPA is tossing out banana peels – with potential costs on a number of fronts that ultimately will hit real people. This economic anti-stimulus also is an unnecessary energy impediment.

It illustrates why, if we’re serious about a secure energy future, a common-sense regulatory structure is needed. By that we mean a regulatory process that’s open to all and based on sound science and legitimate cost-benefit analysis. By that standard EPA’s proposal falls well short.

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Gulf Lease Sale Emphasizes Need for Expanded Opportunities

Some details from Wednesday’s federal lease sale in the central Gulf of Mexico (news coverage here and here):

Size – The Bureau of Ocean Energy Management (BOEM) sale attracted high bonus bids of $1.7 billion for the area off the coasts of Louisiana, Mississippi and Alabama – ranging as far as 230 miles into the Gulf. Bids – Fifty-six companies submitted 593 bids on 454 tracts, with the sum of all bids totaling more than $2.6 billion. That’s a big sale, though not the biggest ever. According to BOEM the biggest value lease sale was $3.68 billion in the central Gulf in March 2008. The last sale in the central Gulf in March 2010 totaled $949 million. Record – The highest bid on a single tract was $157.1 million, submitted by Statoil in the Mississippi Canyon, Block 718 – about three times higher than the previous top bid of $52.5 million submitted in 2010.

Now, some perspective.  As API’s Erik Milito said Tuesday, the simple fact that the federal government held a lease sale in the central Gulf is important. It had been more than two years since drilling blocks had been put up for bid. That BOEM opened more than 38 million acres after a two-years-plus hiatus was a positive step.

Interior Secretary Ken Salazar heralded the sale as evidence of the administration’s “all-of-the-above” energy strategy:

“When it comes to domestic production, the president has made clear he is committed to expanding oil and natural gas production safely and responsibly, and today's sale is just the latest example of his administration delivering on that commitment. … The Gulf is back. There is great robustness in oil and gas activity currently under way in the Gulf, as well as interest in additional exploration.”

Well, it’s probably more accurate to say the Gulf is getting back. Unfortunately, just returning to 2010 levels of activity (rig counts, etc.) concedes that two years of production were negatively affected by the administration’s policies – the 2010 deepwater drilling moratorium and the slow pace of permitting when the ban was lifted. Given that context, sure, industry was enthusiastic about Wednesday’s sale. National Ocean Industries Association President Randall Luthi:

“A sale of this size signals a strong industry commitment to the Gulf of Mexico and to our nation’s energy future and to more domestic jobs.”

More context: The areas opened for bidding this week have been considered before, which is what Milito emphasized on Tuesday. The central Gulf was not a new area for development. So, instead of restricting opportunity to these areas, the government should be expanding it to new ones. As Luthi suggests, industry is willing and able to do more. Just imagine the robustness of the bidding if the lease areas were in the Eastern Gulf or off the Pacific and Atlantic coasts – areas with undiscovered, technically recoverable reserves estimated at 1.40 billion, 10.37 billion and 3.82 billion barrels, respectively (see map).

Milito from Tuesday:

“Exploration is what leads to production. And it is important to understand that it is critical to maintain a robust leasing program to allow companies to explore new prospects and replace the production that is coming from existing wells. Maintaining the status quo won’t work.”

Opening up more U.S. resources for development (onshore as well) is the real path to expanding domestic oil and natural gas production – which is fundamental to a true, all-of-the-above energy approach. It’s critical to an American-made energy strategy that will create jobs, expand the economy and help us be more energy secure in the future.

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EPA’s Unjustified Particulate Matter Proposal

Three good reasons EPA should shelve a proposal to tighten its air pollution standard governing particulate matter:

Science doesn’t justify it.Current control programs are working.A more stringent standard could harm jobs and economic growth.

EPA is scheduled to hold public hearings on its PM 2.5 standard today in Philadelphia and Sacramento – part of a commenting period that runs into August. The proposal, which is to be finalized by the end of the year, would tighten the standard from 15 micrograms per cubic meter to 12 or 13 micrograms.

API’s Howard Feldman, director of regulatory and scientific affairs, discussed the proposal during a conference call with reporters:

“Changing the standard should be supported by clear scientific analysis. The science in this case cannot demonstrate a proven ‘cause and effect’ between levels below the current standard and health consequences. In part, this is because in EPA’s analysis it failed to adequately address confounding factors. EPA also assumed rather than demonstrated a linear relationship between pollution and health effects, concluding that harm to health must occur even at very low levels.”

Feldman, who was to deliver testimony in Philadelphia, said a tighter standard could result in higher costs for providing and using energy, meaning fewer businesses would be created, fewer would expand and fewer workers would be hired. Feldman:

“Existing control programs are working. According to EPA, between 2000 and 2010, concentrations of PM 2.5 in the air fell by 27 percent. As a result, more than three-fourths of Americans today live in areas where air quality meets today’s standards.”

Dr. Julie Goodman of Gradient, an expert in toxicology, epidemiology and in assessing health risks from chemicals in products and the environment, also joined the call. Goodman said EPA has not produced “coherent evidence” that a new PM standard is necessary:

“There’s no evidence that lowering (the standard) 2 to 3 micrograms will have any effect on health. In other words, there’ll be no (real) health benefits from lowering the standard.”

Goodman’s remarks for the Philadelphia hearing can be read here.

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Well-Paying Jobs…Like Ours!

We like talking about our industry’s job-creating ability – how, with the right policies America’s oil and natural gas companies could create a million new jobs before the end of the decade.

Some industry opponents dismiss the assertion by deriding the number of wage positions supported by oil and gas activity. We don’t. Every job means a paycheck for an American who’s glad to have it, especially in this economy.

But guess what? Our industry supports well-paying jobs, too. Payscale.com’s list of high lifetime-earnings jobs is topped by two from oil and natural gas – petroleum engineer and landman/senior landman.

Payscale.com says the typical earnings total for a petroleum engineer over a 45-year career is nearly $6.3 million. The average starting pay is more than $84,000, and at 20+ years the typical salary is $151,000. No. 2 on the list, a landman will earn $5.38 million over a 45-year career, Payscale notes. Starting pay averages $53,600, growing to $138,000 at 20+ years. Payscale lead analyst Katie Bardaro:

“This list is dominated by left-brained jobs that require analytical thinking. We are a tech-heavy, analytics-heavy society, so jobs that focus on those skills pay well.”

Especially jobs in fields that have a future – like oil and natural gas. Our industry literally fuels America’s economy now and will do so in the future according to government estimates. It’s an industry that’s going to be around.

So what other positions made Payscale’s Top 10? Glad you asked:

Software/senior software engineer ($4.36 million over 45 years)Electrical/senior electrical engineer ($4.17 million)Mechanical/senior mechanical engineer ($3.9 million)Software/senior software developer ($3.83 million)Financial analyst/senior financial analyst ($3.44 million)Communications coordinator/manager ($3.32 million)Marketing coordinator/manager ($3.31 million)Certified public accountant ($3.2 million)

Guess what again? You can find virtually all of these positions in the oil and natural gas industry – from the people who’re pioneering “intelligent field” technologies to manage modern, global exploration and development to the folks who develop marketing campaigns – you know, like this one.

Granted, a number of these careers can be found on other paths. Yet the list illustrates the breadth of our industry, its need for workers in the future and the promising career-long opportunities that this industry provides.

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Energy’s Game-Changing Face

A Wall Street Journal report [subscription required] quotes energy analysts who say America will cut its Middle East oil imports in half by the end of the decade and could become oil-independent by 2035, thanks to North American production. 

To those who see the unique chance for the United States to increase domestic oil and natural gas production and fundamentally change this country’s energy equation, we say welcome to the fold. The Journal’s sources are saying things similar to what others have said, including Wood Mackenzie’s analysis last fall, Citi’s 2020 Energy Outlook released this spring and this week’s study by Harvard’s Kennedy School. Of course, along with the energy, there’s job creation and tax revenue generated for government treasuries. All good.

Look at the analyses and there’s a common thread: hydraulic fracturing. It’s the game-changer for the United States, unlocking oil and natural gas resources from shale and other tight rock formations. It is responsible for the rewriting of U.S. natural gas reserve estimates, and its use in oil development is expanding in North Dakota, Texas and other states.

USA Today highlights the fracking boom in a big article, here.  There’s a neat infographic with the story, detailing some hydraulic fracturing basics. The piece’s main thrust is the fantastic economic and energy opportunities afforded by fracking, as well as some of the challenges:

“Even as the price of natural gas dropped to around $2 for a thousand cubic feet this warm winter — half last year's price — states caught up in the boom have enjoyed an employment windfall when jobs nationally have been hard to come by. Since 2009, Pennsylvania has 38,900 natural resources jobs, up 72%; North Dakota has 21,900 jobs, a 172% surge, according to Federal Reserve data. These numbers don't include jobs added to service the fracking industry — everything from selling workers donuts to making steel pipes used in the process.”

That’s what dynamic growth, driven by energy derived from hydraulic fracturing, looks like. The article goes on:

“For many others, the good times are rolling. Welders employed in the natural gas industry average $28.48 an hour, 6 bucks more an hour than other industries pay, according to the Bureau of Labor Statistics. ‘We're still hiring,’ says David Schultz, a plant manager for Forum Energy Technologies' metal fabrication plant in Clearfield, Pa. … About half the fracking well tanks that are manufactured or fixed at the plant are bound for Ohio and the Utica shale, Schultz says.”

No question, there are challenges, as the article notes. Traffic, noise, stretched public services, scarce hotel space, long lines at restaurants. People are concerned the boom will go bust, although industry leaders repeatedly stress the long-term nature of their shale investment. Ohio State University agricultural extension agent Mike Hogan:

“The number of trucks on the roads is incredible. But the money is more than welcome here.”

That seems to be the dominant attitude in other shale states. Energy development is bringing dramatic growth that occasionally tests local infrastructures. But it’s also lifting local, regional and state economies – taking up what Citi’s Daniel Ahn, one of the authors of its energy outlook, describes as slack in our economy. “This couldn’t happen at a better time,” Ahn says.

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A European Perspective on the U.S. Shale Energy Revolution

The intersection of a recent anti-natural gas fundraiser at the trendy Brooklyn Winery – featuring fabulous culinary delights prepared by a group of talented chefs – and the natural gas that made the evening possible was, well, simply mouth-watering.

New York Daily News columnist Bill Hammond writes that the “Taste of the Marcellus” event last week was hosted by a group called Chefs for the Marcellus, to showcase the kinds of foods they say could be jeopardized if New York Gov. Andrew Cuomo OKs hydraulic fracturing in that state’s portion of the Marcellus Shale. Hammond:

"Guests were treated to eggplant-stuffed okra, smoked lamb belly with fermented tofu and whipped ricotta jewel on toast — along with wines from the Finger Lakes and beers from Cooperstown’s Ommegang brewery. Th... more »

Jill is a district manager for Total Safety, a company that provides service solutions for various aspects of the oil and natural gas industry, as well as power-generation and industrial markets. For her, the industry is about future job security: “It’s really an industry that’s not going away.”

Her video:

Visit American Energy Works.org for more videos and information about the people who’re at work for America’s energy future.

A new USA Today/Gallup poll finds two of the top three issues that Americans care about the most in this election year are … jobs and reducing the federal budget deficit. Check and check. America’s oil and natural gas industry can help with both. Respondents were asked to weigh the importance of a number of issues (see chart), and 92 percent said creating good jobs is “extremely/very important.” On cutting the federal deficit the figure was 86 percent. Jobs and revenue to the government – we can help.

With the right policies in place – increasing access to American natural resources, the right approach to energy regulation, encouraging energy investments and more – our industry could create 1.4 million jobs by 2030. Here’s how the Wood Mackenzie energy consulting firm charts the pot... more »

Energy-driven economic growth is more than theory in places like Mount Vernon, Ohio, and Chandlersville, about 60 miles to the southeast. Shale energy is building growth in both places – in different ways.

In Mount Vernon, Ariel Corporation is experiencing demand for the reciprocating gas compressors it manufactures, which are used to extract, process, transport, store and distribute natural gas from shale. In Chandlersville, Steve Addis and his wife own and operate Annie’s Restaurant, which is seeing an influx of workers who’re drilling new shale gas wells in the area. Both show how the oil and natural gas industry supports jobs beyond direct industry jobs.

More in this video:

Visit American Energy Works.org for more videos and information about the people who’re at work for Am... more »

ConocoPhillips’ Bob Morton is chief materials scientist at the company’s technology center in Bartlesville, Okla. The chemical that allowed development of low-sulfur gasoline and diesel – without sacrificing octane and without increasing the cost of the fuel – was developed there, he says.

Coming up with environmentally friendly consumer products is Morton’s mission:

“What I really love about my job is sometimes I’m given the opportunity to see something that nobody has seen before. And when those moments happen truly, those are the things that I think are the most wonderful parts of doing the job.”

Check out Bob’s story:

Visit American Energy Works.org for more videos and information about the people who’re at work for America’s energy future.

... more »

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American Energy Works: Tanker Safety Officer

Janet DeCastro of Polar Tankers wanted a life at sea, so she entered the U.S. Merchant Marine Academy. One of the requirements for cadets was to go to sea for a year on a commercial vessel, and DeCastro’s assignment was aboard an oil tanker.

The experience has become a 24-year professional career – and is one of 9.2 million jobs supported by the oil and natural gas industry. In the video below, DeCastro talks about the ships on which she serves, and the role she plays ensuring safe delivery of oil and protection of the environment:

Visit American Energy Works.org for more videos and more stories from the people of the oil and natural gas industry, who are at work for America.

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