IPAA: Impact of the American Natural Gas Resurgence

Wednesday, January 29th, 2014


WASHINGTON, D.C.—  In our previous article, we focused on how the rising trend for domestic production, especially for oil, was benefiting the U.S. economy with increased jobs, and at the same time improving the country’s trade balance, its geopolitical standing, and its economic impact on world energy markets. Our focus now shifts to the parallel stimulus from the dramatic revival of American natural gas production.

As noted in the prior article, U.S. natural gas production reached an all-time high in 2011, and then surpassed that in 2012 at 25.3 trillion cubic feet, its seventh annual increase in a row. Marketed production for January-October 2013 (latest available) is maintaining, if not exceeding 2012’s level. In addition to dry natural gas produced from natural gas wells, these production figures include natural gas produced as a by-product from oil wells, known as “associated gas.” It also reflects the production from “wet” natural gas wells, the economics of which are strongly influenced by the potential value of extracted natural gas liquids (NGLs) in addition to the natural gas itself.


Dow Chemical, State Lawmakers push for more natural gas exploration, say fracking can be done safely

Wednesday, September 19th, 2012

Chemical industry leaders are promoting natural gas as a way to boost manufacturing and job creation.

They joined a couple of state lawmakers in pushing for policies that allow for shale gas extraction, including horizontal hydraulic fracturing (fracking), a controversial method of accessing natural gas.

There has been an increase in companies buying natural gas leases in Michigan. A House subcommittee on natural gas this year called for the state to seek oil and gas leases on 5.3 million acres of state-controlled land.

Related:  Drooping natural gas prices slow rush to ‘frack’  

Representatives from Midland-based Dow Chemical Co., Detroit-based PVS Chemicals and other firms discussed the importance of natural gas during the American Chemistry Council’s energy policy forum in Lansing on Wednesday.

“At the national level, natural gas is fueling an American manufacturing renaissance,” said Seth Roberts, Dow’s director of energy and climate change policy.

Dow uses natural gas for energy as well as a feedstock to produce the building blocks for various chemicals and plastic products.

When natural gas prices are low, Dow and other companies respond by making investments and adding jobs, Roberts said.

State Reps. Charles Brunner, D-Bay City and Aric Nesbitt, R-Lawton, echoed the industry leaders’ enthusiasm for natural gas.

Brunner acknowledged environmental concerns about the chemicals injected into the ground during fracking, but said he’s sure it can be done safely in Michigan given the state’s environmental regulations.

“I’m excited about natural gas exploration and doing whatever we can to make it happen,” Brunner said.

Brunner’s views differ from some of his Democratic colleagues in the House, who in April called for a moratorium on issuing permits for certain large-scale fracking operations until the state can study its impact on the environment and drinking water.

Rep. Lisa Brown, D-West Bloomfield, introduced HB 5565, which requires companies to disclose the chemicals used in fracking before they can receive a permit, allows for public comment before a permit decision and requires companies to use the least harmful chemicals possible.

“Parents shouldn’t have to second guess the quality of their water,” she said in April.

A ballot proposal to ban fracking failed to get enough signatures to appear on the November ballot.

Gov. Rick Snyder in April said the state has been fracking for natural gas for decades, but hasn’t had environmental problems because of more strict regulations than are found in many other states.

Valerie Brader, Snyder’s deputy legal counsel and senior policy advisor, spoke at the forum on Wednesday but did not talk about specific methods for extracting shale gas.

She highlighted Michigan’s opportunities — the state not only has natural gas resources but its underground geological features have more than 10 percent of the nation’s natural gas storage capacity.

“Being able to have a lot of reliable storage nearby to facilities with an infrastructure and a pipeline infrastructure that supports that, is a real asset that Michigan has to build on and shouldn’t be shy about promoting,” Brader said.

Snyder recently filed a protest against Trunkline Gas Co.’s plans to abandon a main natural gas transmission line serving Michigan.

“Our state, and the nation, needs more natural gas infrastructure, not less, and we must have a comprehensive energy policy that supports excellent reliability and adaptability at a competitive rate, while protecting the environment,” he said in a statement.


Article written by:  Melissa Anders at Mlive.  Originally published on Wed., Sept. 12, 2012 

North American energy independence possible, House panel told

Friday, September 14th, 2012

It’s not unrealistic to expect abundant oil and gas resources to help make North America energy independent within a decade, witnesses told a US House Energy and Commerce Committee subcommittee on Sept. 13.

“The United States has become the world’s second-largest oil producer,” said Harold G. Hamm, chief executive of Continental Resources Inc. in Enid, Okla. “We just passed Russia and are behind only Saudi Arabia. I don’t think a lot of people realize this.”

Hydraulic fracturing and horizontal drilling have helped the US reduce its crude oil imports from 60% of its total consumption a few years ago to 45%, he told the committee’s Energy and Power Subcommittee. US natural gas reserves have grown from a 7-year supply to one that’s more than a century, Hamm added.

“The technology that allows us to drill 2 miles down, turn right, go another 2 miles, and hit a target the size of a lapel pin has unlocked the resources that make energy independence a reality,” he said.

Growing oil and gas production and declining demand could have dramatic consequences for US energy security, suggested Daniel P. Ahn, chief commodities economist at Citigroup in New York.

“I estimate that new US oil and gas production could add $200-300 billion in revenue, which in turn could stimulate many hundreds of billions more in economic activity, investment, and consumption, creating at least 2 million, and as high as 3.5 million, new jobs,” he said.

Deficit slashed

Dependence on crude oil imported from outside North America should shrink or even be eliminated entirely, Ahn continued. “The US current account deficit, which saw trillions of dollars passed on to foreign oil exporters, could be slashed by two-thirds, strengthening the credibility of the US dollar as the world’s currency of choice,” he said.

Global oil prices could fall 15-20%, and domestic refining, petrochemical, fertilizer, steel, aluminum smelting, and other energy-dependent manufacturing could strategically benefit, Ahn said, adding, “Natural gas vehicles could proliferate on American roads.”

John Freeman, of Raymond James & Associates Inc.’s energy research group, said many favorable trends can be sustained because they are driven by the private sector. “However, Congress can play a constructive role in accelerating these trends and supporting industry efforts along the way,” he suggested.

The North American unconventional hydrocarbon resource boom began sooner for gas than for oil, “but we think the real inflection point is upon us now,” Freeman testified. “This year alone, we project a supply increase of nearly 1 million b/d, about as much as the prior 2 years put together. We project a similar increase in 2013, with sustained growth thereafter toward the end of the decade, though at a somewhat slower pace.

“In fact, we forecast the US will become the largest oil producer in the world before the end of this decade,” he said.

Regulatory crush

The new reality of North American hydrocarbon independence also makes displacement of the Middle East as the world’s primary energy exporter a credible scenario, according to Mark P. Mills, a senior fellow at the Manhattan Institute in New York. “When asked what constrains expansion, businesses across the country universally cite the crushing weight of the existing regulatory system,” he said.

To unleash the enormous economic benefits from expanding hydrocarbon production and exports, Mills urged the next president and Congress to pass omnibus energy legislation that is both prodevelopment and proexport, establish a single federal portal for approving all major energy projects, and not enact new federal regulations until an interagency taskforce can explore how to make them more cost-effective, efficient, and transparent.

Peter Howard, president of the Canadian Energy Research Institute in Calgary, said US President Barack Obama’s rejection of TransCanada’s cross-border permit application for the Keystone XL crude oil pipeline project surprised producers above the border, since all previous cross-border oil pipelines had been approved.

They are exploring alternatives ranging from building a pipeline west to British Columbia to shipping some of the bitumen by rail or tanker to US Gulf Coast and eastern Canada refineries, he told the subcommittee.

Other witnesses told the subcommittee it is equally important to extend the production tax credit for alternative and renewable energy projects to make North America truly energy independent. “The wind industry has generated investment upward of $20 billion annually and created 75,000 new jobs,” said John Purcell, vice-president of wind energy at Leeco Steel in Lisle, Ill. “Since the PTC was last allowed to expire, there was approximately only 25% domestic content in each wind turbine that was erected. Today, the average is over 65%.”

Daniel J. Weiss, a senior fellow at the Center for American Progress Action Fund in Washington, said, “Congress must not ignore climate science when developing energy policies. Promoting an energy independence plan that increases carbon pollution is like setting your house on fire to stay warm. It may work at first, but the long-term consequences are horrendous. Any energy independence plan must reduce carbon pollution too.”

Article written by:   Nick Snow,   Oil & Gas Journal, Washington Editor  (

Why We Should Keep Tax ‘Loopholes’ For Oil Companies

Tuesday, June 5th, 2012

Across Washington, D.C., the push to end so-called energy company “subsidies” has become a well-worn political trope – touted as a solution for everything from reducing the deficit to punishing oil companies for high gasoline prices.

The president himself said he was in favor of repealing “billions in tax giveaways” to energy firms during a much-publicized address in March.  But is that really an accurate portrayal of the current tax code?

For the most part, energy companies are treated just like any other industry when it comes to taxes.  Much of what politicians call giveaways are simply timing issues related to when particular items can be expensed – governed by provisions in the tax code established decades ago to strengthen U.S. energy production.  These provisions are not tax credits, which allow for a dollar-for-dollar reduction in tax liability.

For example, the president’s most recent budget proposal calls for the repeal of   a provision that details how energy companies account for intangible drilling costs, or IDCs.   U.S. tax law has long allowed oil and gas companies to deduct IDCs – expenses for labor and services related to drilling a well – at the time they are incurred, versus depreciating those costs over time.

Eliminating those deductions would have dramatic consequences on domestic energy production.  Despite lawmakers’ and the public’s perception of “Big Oil,” approximately 90% of all wells in the U.S. are drilled by independent energy producers, most of whom are small or mid-sized companies.

To independent producers, IDCs are the equivalent of research and development costs that technology and pharmaceutical companies incur – up-front expenses with no guarantee that the investment will deliver results.  Even if a well is successful, it typically takes many months before revenue is captured.  Thus, the IDC provision simply accelerates the actual cash flow of the project but does not eliminate the tax liability.

According to the Independent Petroleum Association of America, IDCs typically account for about 20% to 35% of the capital expenditure budgets of a well.  Without the ability to expense these costs, many independents’ cash flow would be significantly diminished and they would have to immediately reduce their drilling budgets since they lack the cash flow to fund these operations internally and their cost of capital would otherwise increase.

And as producers scale back, production from shale oil and natural gas, which is heavily driven by independents, will be at risk.  In recent years, the shale boom has played a major role in providing jobs, boosting domestic supplies and increasing state and federal tax revenues.  It is not an exaggeration to say that the IDC provision is one of the factors that has allowed the “shale revolution” to ramp up so quickly.

But IDCs aren’t the only tax item under scrutiny in Washington, D.C.  Another provision slated for repeal in the president’s budget governs percentage depletion, a calculation used to determine the decreasing value of a mineral resource as it is produced.  But its use is limited by guidelines that make it applicable only to small companies and individual royalty owners, so it has a minimal impact on federal tax revenues.

Proponents say repealing provisions that deal with IDCs, percentage depletion and the domestic manufacturing credit – available to all industries but used by just a small subset of the oil and gas industry – would bring in close to $40 billion in new tax revenues over a 10-year period.

That $4 billion a year figure – small as it is compared to the overall budget deficit – is based on current levels of drilling.  It doesn’t take into account the fact that domestic activity would most likely decrease as independents cut back on their capital budgets in response and investments in new production dry up.

In other words, changing the current tax code might make lawmakers happy, but it won’t achieve its hoped-for objectives and, in fact, will do the opposite:

  • Integrated majors won’t be affected meaningfully
  • Cash-strapped independents will be hit hard
  • Domestic production will be depressed
  • Job growth related to the shale boom will stall
  • Tax revenue will fall

The technology advancements that are driving the shale boom, coupled with the existing tax code, have put the U.S. in a position not seen in years – one where domestic production is high and new reserves are creating economic opportunities across the country.  If we want to increase security of supply, keep retail energy prices low and create high-paying jobs, our energy policy should encourage future drilling by allowing proven tax provisions to remain in place.

Article written by:  Deborah Byers,  the Transaction Advisory Services (M&A) Leader for Ernst & Young LLP’s Southwest Sub-Area, and she also serves as the Ernst & Young Americas Oil and Gas Tax Sector Leader.  Deborah has represented investors and companies in various types of domestic and cross-border oil and gas transactions. The views expressed in this article are Deborah Byers’ and not necessarily those of Ernst & Young LLP.  

Link directly to this article at: FORBES



Duplicative & Unnecessary Regulations

Monday, April 30th, 2012

Hydraulic fracturing has been widely implemented in the United States for nearly sixty-five years and has been used in over 1.2 million wells. During that time, it has been regulated by the states and the federal government utilizing authorities provided by the Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) among others.

The CWA for example, regulates the discharge of pollutants, including flowback from fracturing operations, into U.S. waters. It also provides regulatory structure mandating spill prevention control and countermeasures. Meanwhile, SDWA sets regulations for the disposal of brine and other wastes. This state-federal arrangement has brought about a successful track record for the technology’s use, a revival of U.S. energy production and massive economic benefits to our nation, its communities and consumers.

This isn’t just my view, it’s the opinion of EPA administrator Lisa Jackson who noted, “you can’t start to talk about a federal role [in hydraulic fracturing] without acknowledging the very strong state role.” Jackson also added, “We have no data right now that lead us to believe one way or the other that there needs to be specific federal regulation of the fracking process.”

Yet in spite of established science and well documented experience, a vocal minority is urging the president to push for greater regulation of the practice. The pleas of this group are not based on facts, but on anecdotes and unfounded claims. In response, many federal agencies have drafted regulatory proposals in recent months.

Most of these proposals are either un-necessary, duplicative or both. Two examples include the EPA’s promulgation of regulations governing pre-treatment standards for produced fluids and the agency’s new source performance standards for hydraulically fractured wells. In its rush to regulate, the EPA missed that industry and state regulators are already addressing these issues. Specifically, independent operators are using water recycling and disposal wells for water and brine waste management. They are also using green completion techniques, and other measures, to significantly reduce emissions from development operations.

Pursuing additional regulations for actions that are already occurring is an unwise use of increasingly strained taxpayer dollars. This is exactly what our nation should avoid if it hopes to continue enjoying the economic rebirth of its steel and manufacturing industries, both of which benefit from access to clean burning, affordable natural gas and oil supplies harvested utilizing hydraulic fracturing.


Information provided by:  Barry Russell,  President of the Independent Petroleum Association of America.  (IPAA)



Oil and Natural Gas “Reserves” – Definitions Matter

Tuesday, April 17th, 2012

WASHINGTON, DC— When determining energy policy, many politicians, pundits, and policymakers discuss the amount of America’s oil and natural gas “reserves” without fully appreciating how broad a range of possible meanings is covered by the term “reserves.” True, the various definitions all refer to oil and natural gas resources in the ground—but which to include—only what’s recoverable or all that’s in place? Discovered or projections of the yet undiscovered? With how much certainty? With what technology and at what price? The ambiguities leave oil and natural gas “reserves” vulnerable as a political bull’s eye. Different definitions and comparisons can be used depending on how rosy or bleak one wants the outlook to appear. We’d like to clear up just a little of the confusion, do a rough sketch of some of the basics, and explore how recent advances in technology have changed the meaning of “reserves.”

Plethora of Definitions

There are different purposes behind the effort to define reserves. They range from near-term, high certainty, conservative estimates of what can be produced by an individual company that can be used as the basis for project planning and financing, all the way to blue-sky, long-horizon, inferred projections for a whole region or country of resources that may exist regardless of the current state of technology or economics.

Thus, many entities have their own definition of “reserves”—the U.S. Geological Survey, American Association of Petroleum Geologists, Society of Petroleum Engineers, the Society of Petroleum Evaluation Engineers, the World Petroleum Congress, not to mention the Securities and Exchange Commission, the Internal Revenue Service, and the United Nations Framework Classification. Geologists and petroleum engineers have various highly developed systems of categories and terminology, and have spent considerable effort coming up with definitions that can be applied repeatedly and consistently. However, to keep our analysis brief (and since we are neither engineers nor accountants), we’ll limit ourselves to distinguishing between “proved reserves” and “technically recoverable reserves.”

Proved Reserves

An example of proved reserves is the Securities and Exchange Commission (SEC) definition, effective in 2010, since public companies are required to provide reserves data in their 10-K reports.

“Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations.”

One key term is “reasonable certainty,” which is generally taken as 90% probability. It implies estimates are only for areas with solid data from existing wells and production history from which highly certain and reasonably precise estimates can be made. The term “economically producible…under existing economic conditions, operating methods, and government regulations” excludes any projection of future technology improvements, and implies that producing this resource must be economic with current market prices and other economic conditions.

In other words, “proved reserves” is an extremely conservative definition.  It has little downside risk and potentially a great deal of upside potential. With a bent towards precision and high certainty, it can exclude large amounts of oil and natural gas that are likely to exist but can be estimated less accurately and with less stringent requirements for certainty. In fact, “reserves growth,” a common industry phrase, is almost a foregone conclusion even in the “proved reserves” category, as existing producing areas undergo infill drilling, reservoir assessment, re-completions, work-overs, re-fractures, and refinements in development strategies.

Technically Recoverable Reserves

By contrast, the term “technically recoverable” is much more expansive. According to the U.S. Geological Survey, “Technically recoverable resources” are “resources in accumulations producible using current recovery technology but without reference to economic profitability.” This differs from “proved reserves” in many ways. It is less restrictive than the 90 percent probability point, often including a range of estimates with a corresponding range of probabilities; it includes estimates of yet-to-be-discovered oil and gas; and includes oil and gas that may not be producible with current prices and other economic conditions. Thus, it can be a much larger figure than “proved reserves.”

Technology Expands Estimates

A key point about “technically recoverable reserves” is that those estimates change as technology changes— sometimes changing in a major way, when, for example, horizontal drilling is combined with hydraulic fracturing.

This has been clearly illustrated as many shale gas and shale oil plays have become viable thanks to new technologies. For example, in 1995, the USGS estimated that the Bakken formation, discovered in the 1950s, held only 0.15 billion barrels of technically recoverable oil. In just under twenty years, in 2008, thanks to advances in tight oil technologies, it updated this to 3 to 4.3 billion barrels! The situation has changed rapidly enough that the USGS is working on yet another assessment (out of cycle) expected in late 2013. Meanwhile, other industry experts have put the figure for the Bakken much higher, closer to 20-24 billion barrels with total original “oil in place” (total volume present in a reservoir) nearing 1 trillion barrels.

Hardly a new hydrocarbon region with the first well drilled in 1921, the Permian Basin of Texas and New Mexico, has a production history of well over 30 billion barrels of oil since then. Yet technological advances have significantly altered assessments of its technically recoverable reserves. In 2007, USGS assessments for the region included for the first time “continuous resources,” a term which includes shale gas and shale oil plays. Without these added assessments, the Permian estimates of undiscovered technically recoverable resources would have been limited to the conventional plays, put at 5.2 tcf of natural gas and just under 1 billion barrels of liquids by the USGS. But the addition of “continuous resources” added another 35.4 tcf of gas and 1.3 billion barrels of liquids, putting the total estimate of undiscovered technically recoverable amounts at 41 tcf of gas and 2.3 billion barrels of liquids. Original crude oil in place is estimated at 95.4 billion barrels, with 33.7 billion barrels of that produced or in discovered, recoverable reserves.

Overall, the assessment of U.S. technically recoverable reserves of both oil and natural gas have grown markedly over the past decade, as the chart shows.

International Apples and Oranges

Before one compares U.S. “reserves” with other producing countries around the world, it’s important to know what is being compared. For example, some countries for political reasons may focus on more expansive definitions of “reserves” or even on “oil in place”— not all of which is commercially recoverable. Some countries may withhold detailed technical data, which makes independent assessment of reserves difficult. Knowing how and when to apply definitions to emerging technologies can also lead to differences. For example, Canada’s oil sands’ reserve estimates have been subject to different interpretations by various analysts, ranging from dozens of billions of barrels to well over a hundred billion barrels. Thus, comparing U.S. “proved reserves,” one of the most conservative definitions in use, with these broadly-defined figures distorts the comparison.

Caution: Future May Be Brighter Than Appears

From the beginning days of the industry, continued innovation has led to new, expanding assessments of “technically recoverable” oil and natural gas. Edwin Drake’s first well in 1859 astounded onlookers with production of all of 10 barrels per day as oil from surface seeps was quickly surpassed by the volumes of oil producible by simple drilling. From those early days onward, improvements in technology, geologic understanding, and operational experience have progressed as the industry moved to deeper prospects, differing geologies, and more challenging environments offshore. Independents have often been at the vanguard of technological innovations that have made these milestones possible—using ever evolving engineering, information processing, and innovative operational practices.

For shale oil and shale gas and other tight, low-permeability plays, the industry is only at the beginning of the technology story, with much room left to grow in recovery factors and depletion curves. Thus the final outcome is unknown—but may be brighter than experts could have ever projected in the past. The turnaround in U.S. oil and gas production, with independents at the helm, is concrete evidence of the growing commercial resource base of American oil and natural gas—and great encouragement for America’s energy future.

To review our past analyses and our latest data, please visit the Resources section at:


All information for this article provided by IPAA – Declaration of Independents, 1201 15th Street, NW, Suite 300, Washington, DC 20005

Phone:  (202) 857-4722    Website:


Friday, November 18th, 2011

What do a boardwalk in an Alger County township park, a marsh in St. Clair County, a beach restoration in the city of Frankfort and a state park on the Detroit River have in common?

All were at least partially paid for by Michigan’s Natural Resources Trust Fund.

Established in 1976 (albeit, with a different name) the Michigan Natural Resources Trust Fund (MNRTF) this year celebrates 35 years of strategically acquiring property and improving recreational facilities for the benefit and enjoyment of Michigan’s residents and visitors.

The MNRTF was established, following a spirited debate, after oil was discovered in the Pigeon River Country State Forest in the northeastern Lower Peninsula, a pristine wilderness that serves as the home range of Michigan’s elk herd. At the time of the discovery, some people believed that Pigeon River Country was too important a resource to jeopardize by allowing energy development. Others thought the oil was too valuable an asset to sit underground unutilized.

The MNRTF was the result of the compromise agreed upon by both sides: it allowed the development of energy resources, but dedicated the revenues and royalties derived from mineral development to the acquisition of additional land to compensate the public for the disruption energy development caused.

And it embodied an important principle for the management of Michigan’s non-renewable natural resources: The resources belonged to all generations of Michigan residents – not just those who were around when the minerals were exploited. So instead of just funneling the money into the general fund, as had long been the practice, the Kammer Recreational Land Acquisition Fund (named for then Sen. Kerry Kammer, Oakland County) was established.

By 1978, the Trust Fund, which was set up with a $100 million cap to generate interest, was funding the acquisition of public land, not just for ownership by the state of Michigan, but for other governmental bodies as well: cities, townships, counties. The Trust Fund was so successful that it became a target for legislators who sought to use some of the money it brought in to solve Michigan’s other financial problems. By 1983, more than $100 million had been diverted to other purposes.

Then in 1984, the voters of Michigan approved a constitutional amendment that created the MNRTF, increased the cap to $200 million and protected the fund from raids. In addition, it allowed for up to one-third of the revenue to be used to purchase land for environment protection and recreation and the development of recreation facilities. But there was also a provision that allowed the diversion of $20 million annually to the state’s economic development fund – something that many believed was not in the spirit of the fund’s original intent.

So a decade later, the question was brought before the voters once again. The public overwhelmingly approved Proposal P, which removed the diversion provision, raised the cap to $400 million and created the State Parks Endowment Fund, which receives $10 million annually for the maintenance and capital improvement of state parks.

But the public wasn’t finished improving the MNRTF. In 2002, the voters raised the cap to $500 million, which was reached earlier this year, and where it remains today. Since the cap has been reached, oil and gas revenues now go to the Parks Endowment Fund to pay for a portion of the numerous, much-needed infrastructure repairs at Michigan’s state parks and recreation areas.

Since its inception, the Trust Fund has granted more than $900 million to local units of governments and the Department of Natural Resources to acquire land and develop recreational facilities. Roughly 80 percent of those grants has been spent on land acquisition, the rest on recreational project development. The spending has been split almost 50-50 between projects nominated by local governmental bodies and DNR initiatives.

“The Natural Resources Trust Fund has, without question, improved the lives of Michigan’s citizens,” said Steve DeBrabander, who oversees the DNR’s Grants Management section. “I believe you would be hard pressed to find a Michigan citizen who has not enjoyed a park or trail that was acquired or developed by this fund.”

Projects funded range from small (restroom improvements at a local park, for instance) to grand, such as the purchase of development rights of Kamehameha Schools lands – $16 million spent on a conservation easement that allows timbering and public access to nearly a quarter-million acres of Upper Peninsula land spread across several counties.

Projects have been funded in every county of the state, from launch ramps on local lakes to expansions of state wildlife areas.

The Trust Fund is overseen by a five-member board, which includes the DNR director or a member of the Natural Resources Commission and four state residents appointed by the governor to four-year terms.

The Grants Management section of the DNR administers the fund. It accepts and scores applications for grants and passes them along to the MNRTF board for its consideration. Specific criteria,ranging from the resource protection and recreational opportunities a project affords to where the project is located (urban area recreational opportunities get a priority) to the availability of matching funds for a particular project, help guide the review process. The board makes recommendations for funding to the Legislature, which approves all expenditures.

Currently, the board is chaired by Bob Garner of Cadillac, who, interestingly enough, was a legislative aide in the 1970s (to Sen. Kerry Kammer) and attended the first meeting to develop the Trust Fund.

Playground equipment at Keith J. Charters Traverse City State Park was purchased with Natural Resources Trust Fund money.

“None of us from back then can even believe how wildly successful the Trust Fund has been,” Garner said. “We’re just in awe of it. Think about this: The Trust Fund has provided more money for land acquisition than the federal duck stamp program and that’s been around since 1937.”

Periodically, the board identifies priorities. Current priorities include trails and greenways, wildlife corridors and deer wintering yards, and projects in urban areas.

Development grants range from $15,000 to $300,000. There is no limit to acquisition grants.

DNR Director Rodney Stokes said he believes the MNRTF program is “one of the most important pieces of natural resources legislation of the last 35 years.

“Citizens all over the state, as well as our many visitors, have benefited from this amazing program.”

To learn more about the Natural Resources Trust Fund, visit



Monday, July 18th, 2011

The  Independent Petroleum Association of America (IPAA) recently wrote both House and Senate leadership urging them to consider the consequences of attacking America’s energy producers through the tax code as they seek to develop revenue as part of any deal to address federal budget deficits.

Much has been said about the elements of a compromise to address the forthcoming expiration of the statutory debt ceiling and the challenges of reducing the federal deficit. Among the issues that have been raised are targeted tax increases on specific industries. President Obama targeted the oil and natural gas exploration and production industry in many of his recent statements. As the most active advocate for America’s independent producers, the IPAA requests that these proposals to target a specific industry for tax increases be rejected.

Massive, billion dollar tax increases will put thousands of jobs in jeopardy and deepen our nation’s dependence on unstable regions of the world to fuel our economic recovery and future growth. Such a change would have an adverse effect on America’s independent oil and natural gas producers’ ability to invest in new, American energy production – which also means fewer jobs and less economic growth.

Political rhetoric describes tax provisions related to oil and natural gas production as “loopholes” or “subsidies.” Two key issues that affect independent producers relate to drilling costs and percentage depletion. These are neither loopholes nor subsidies. They are mechanisms – like depreciation – that provide for capital recovery. Independent producers historically have reinvested as much as 150 percent of their American cash flow back into new American projects. Changes that limit this capital will affect the 4 million jobs associated with just America’s independent onshore investments.

Selectively taxing America’s oil and gas producers would put tax revenue at risk, jobs in peril, and put America further at the mercy of foreign energy suppliers.

Along with IPAA, Miller Energy Company would like to urge you to write your Members of Congress in both the House and Senate to urge them to support America’s energy producers, job creation, and sound business tax policy by opposing all efforts to raise energy taxes on America’s consumers.

Please click here to make your voice heard.

Information provided by the Independent Petroleum Association of America, 1201 15th St., NW, Suite 300, Washington, DC 20005


House Bill Proposed to Speed Onshore Drilling Permit Process

Wednesday, July 6th, 2011

Republican Representative Mike Coffman of Colorado, a member of the House Natural Resources Committee, has introduced legislation that would require the Department of Interior (DOI) to expedite the approval process of onshore oil and gas drilling permit applications on public lands.

HR 2375 would require DOI officials to identify 200 onshore leases with the most energy potential and move them through the permitting process within 180 days. Companies currently complain that the permitting process takes years to go through. The bill has the support of the Colorado Oil and Gas Association and the Western Energy Alliance. Miller Energy Company supports this bill, which clarifies and streamlines the permitting process for producers.

HEAT Asks… Fed Up With The Price At The Pump?

Wednesday, May 25th, 2011

Congressman Alan Nunnelee is joining with House Majority Whip Kevin McCarthy (R-CA), Chief Deputy Whip Peter Roskam (R-IL), Energy and Commerce Committee Chairman Fred Upton (R-MI) and Natural Resources Committee Chairman Doc Hastings (R-WA) to announce the creation of the House Energy Action Team (HEAT).

HEAT will consist of a committed group of House members to promote Republican energy policies that will address rising energy prices, create thousands of good jobs and enhance our national security by promoting energy independence for America.  HEAT will clearly demonstrate that House Republicans are on the side of the small businesses and families who are increasingly harmed by record high energy prices.



Washington vs. Energy Security

Wednesday, May 11th, 2011

In an opinion article published today in The Wall Street Journal, former Congressman Harold Ford, Jr.  writes that in regards to energy security for our nation, that our focus right now should be on finding ways to encourage domestic energy supplies, even while we encourage new sources of energy.  Following is an abbreviated list of the steps that might be considered to move the United States towards energy security:

  • Conduct a comprehensive review of existing policies, rules and restrictions and root out any that needlessly hamper energy production at home.
  • Develop skills needed to find new and better ways to recover domestic supplies of energy, and to develop next-generation fuels to secure the future.
  • Stop demonizing Big Oil to score political points.

The time is now to constructively debate a comprehensive national energy strategy.    To read Mr. Ford’s opinion article in full,  use this link to the WALL STREET JOURNAL.



Thursday, May 5th, 2011

Make your voice heard, please tell Congress to increase American Energy Production by voting YES on H.R. 1229, H.R. 1230 and H.R. 1231.

This week and next, the U.S. House of Representatives will be voting on a series of bills aimed at increasing American energy production.  We are asking you to get involved and let your elected Representative know where you stand on American energy production!  Please act now and make your voice heard by contacting your Representative.

Upcoming Legislation:

  • The Putting the Gulf Back to Work Act (H.R. 1229) would end the de facto moratorium in the Gulf of Mexico (GOM) in a safe, responsible manner by setting firm time-lines for considering permits to drill, providing certainty, and allowing employers and workers to get back on the job.
  • The Restarting American Offshore Leasing Now Act (H.R. 1230) would require the Administration to move forward promptly to conduct offshore lease sales in the Gulf of Mexico and offshore Virginia which have been delayed or canceled.
  • The Reversing President Obama’s Offshore Moratorium Act (H.R. 1231) would lift the president’s ban on new offshore drilling by requiring the Administration to move forward in the 2012-2017 lease plan with energy production in areas containing the most oil and natural gas resources.

Background:  The Magnitude of the Offshore

America’s offshore industry supplies 30% of American oil and 10% of American natural gas.  Independent oil and natural gas producers operating in the offshore GOM accounted for $38 billion in economic benefits, more than 200,000 jobs and $10 billion in federal and state revenue and royalty payments in 2009, according to an IHS Global study; 121,000 jobs were created by independents in the deepwater GOM alone.  After the Deepwater Horizon incident the Obama administration created a six month deepwater moratoria. Although this moratorium has been lifted, few permits have been issued with little hope in sight for an efficient process.

Permit delays threaten the future of American offshore production.  According to a recent study done by Wood Mackenzie, nearly one third of American deepwater production would become uneconomic if the Department of the Interior increases the time spent reviewing and permitting drilling permit applications.  Based on these figures, some estimate as many as 125,000 jobs could be lost in 2015.  If the regulatory environment doesn’t improve and independent producers are shut out of the offshore, the economic impacts are significant.  Potential job losses in the four-state Gulf region alone are: 289,716 by 2015; 300,974 by 2020.  Tax/royalty losses to the federal treasury is roughly $7.34 billion in 2009 with estimates of $10.13 billion by 2015 and $9.98 billion by 2020, only deepening our fiscal deficit and hurting the already struggling domestic economy.

Time For Action:

Even if you are not in a coastal state, these bills represent the first real pro-development vote made this Congress, so these votes will be used to test the waters for future pro-energy initiatives. It is critical that the vote be strong and that YES votes not just come from Gulf Coast Members.

Please contact your U.S. Representatives and urge them to vote YES on H.R. 1229, H.R. 1230, and H.R. 1231, and NO to any amendments that would hurt American energy production.


Information being  provided by IPAA (Independent Petroleum Association of America), 1201 15th St., NW, Suite 300, Washington, DC





Miller Energy Supports Hydraulic Fracturing In Michigan

Wednesday, May 4th, 2011

Miller Energy  believes that Hydraulic fracturing is a safe, proven and essential process used in recovering natural gas and oil from reserves found deep below the earth and often in tight rock.   The Michigan Oil & Gas Producers Education Foundation has developed a fact sheet that is very informative regarding the process here in Michigan. Please click on this link for information on, “Hydraulic Fracturing in Michigan”.

Information provided by:  Michigan Oil & Gas Producers Education Foundation, 124 West Allegan St., Suite 1610, Lansing, MI  48933

Deep-water Rigs Being Chased from U.S. Waters

Tuesday, April 26th, 2011

The Noble Clyde Boudreaux, an ultra-deepwater semi-submersible drilling rig will soon be starting up operations off the coast of Brazil.  In an opinion article titled, “Time for a Cease-Fire in the War on Oil”,  published this week in THE WALL STREET JOURNAL, Joseph Mason helps shed the light on why the Noble and six other deepwater rigs have left the Gulf, with two more possibly on the way out.

Moving the Noble out of U.S. waters is one of the adverse consequences of the Obama administration’s overreaction to last year’s Deepwater Horizon explosion in the Gulf of Mexico, states Mason.    According to the article, 19,000 jobs in the Gulf states  alone were lost due to President Obama’s six-month moratorium on new deep-water drilling.

As the Noble Clyde Boudreaux starts drilling for Brazilian oiland gasoline prices rise past $4 a gallon, the unfortunate effects the White House could have foreseen from it’s war on oil are becoming clear to everyone.    Mr. Mason’s article is well worth your reading time.


* Information taken from:  Time for a Cease-Fire in the War on Oil, by Joseph Mason , published April 25, 2011 in THE WALL STREET JOURNAL.


EPA Should Step Back From Imposing Unnecessary Regulations

Monday, April 25th, 2011

Editorial by:  Luke C. Miller

As an independent explorer and producer of American oil and natural gas and a resident of Kalamazoo County, I feel a responsibility to reply to previous editorials in reference to H.R. 910 concerning the Clean Air Act (CAA) and the Environmental Protection Agency’s (EPA) authority to regulate Greenhouse Gases (GHG).

The EPA’s initiative to regulate GHG’s under the CAA is based almost exclusively on the US Supreme Court decision in Massachusetts v. EPA. Ultimately, the Supreme Court concluded that the EPA “…must ground its reasons for action or inaction in the statute.” In order for such a decision to be made it’s critical that the EPA consider the legislative history of the CAA.

The CAA was enacted in 1970 at a time when Congress was focusing on air pollution in the US. With a focal point on certain pollutants (i.e. sulfur oxides, nitrogen oxides, particulates, carbon monoxide) Congress developed the CAA to address industrial and vehicle specific emissions. It did not view the common compounds in the atmosphere – nitrogen, oxygen and carbon dioxide – as air pollutants, which can be confirmed through our own Michigan Representative John Dingell’s comments that the he and the co-authors of the CAA never intended to include carbon dioxide as a regulated pollutant.

In 1970 global climate change concerns were rising but the information was too vague and too uncertain to suggest that Congress had any intent to address it in the structure of the CAA. In 1977 when the first major amendments to the CAA were enacted, global climate change was a policy issue and Congress chose not pursue such issues under the CAA. Instead Congress chose to limit the CAA to analysis while addressing regulation through other laws. In response to international agreements on ozone protection Congress acted by providing the authorization of Title VI in the CAA. Such history, along with the intricate and complex details of each issue outlined in the CAA, confirms that Congress never intended the CAA to be a source of regulation on GHG’s.

We’ve already seen a Democratic Senate explicitly discard a cap and trade bill last year which happened prior to the EPA’s attempt at regulating GHG’s under a misguided understanding of the CAA.  The CAA was never designed to regulate GHG, as evident, if nothing else, by the thresholds written in the law itself.  EPA is using court decisions to justify requirements that are unworkable and beyond the EPA’s authority.

Allowing the EPA authority to regulate GHG’s without broad commitment internationally would be catastrophic for local and national economies. The suggested EPA policies would have little to no effect on the environment. For instance, one challenge listed in the EPA regulations is referenced as “leakage” – being the transfer of GHG emissions from the US to other countries. As we’ve seen over the past decade this concept is not difficult to comprehend as key countries, like China and India, have drawn vast international investment – including the dramatic shift of the US share of manufacturing. The implementation of a US-only regulatory environment would amplify this shift as well as cause considerable damage to our economy and national security all with little, to no improvement environmentally.  If the US needs to act on global climate issues, Congress should provide legislation that takes into account the unique challenges a global issue creates.  Until Congress chooses to act, EPA should not be imposing costly, job-killing regulations for no tangible global environmental benefit.

As constituents, I urge all of us to make choices for the betterment of our nation which is why I ask you to contemplate the consequences of allowing the EPA to issue their proposed regulations.  Instead, we need to convey to our representatives the necessity to think rationally and logically as we implement policies to protect our environment and our economy.  I encourage you to contact your representatives in Congress in support of H.R. 910.




Stop EPA’s Energy Tax

Thursday, March 31st, 2011

In the wake of a failed attempt last week by Congress to pass a climate bill, the EPA has been aggressively implementing new permitting regulations using the Clean Air Act (CAA), targeting the energy industry and others across the country with costly new requirements.  Our elected officials will soon have the opportunity to vote to stop the EPA.


On March 15, 2011, the House Committee on Energy & Commerce reported a bill, H.R. 910, the Energy Tax Prevention Act, which limits EPA’s authority to regulate greenhouse gases (GHGs) under the CAA.  House leadership has said publicly that they expect to bring the bill up on the House floor for a vote, possibly the week of April 4.

The Senate is continuing consideration of a small business research bill where an amendment offered by Minority Leader Mitch McConnell is expected that would also block the ability of EPA to use the Clean Air Act to try and regulate GHGs.


The Clean Air Act (CAA), passed in 1970 and last amended in 1990, was designed to protect public health and public welfare and to regulate emissions of hazardous air pollutants.  The law comes complete with specific, respective emissions thresholds in which to apply its regulatory authority, a responsibility to set national ambient air quality standards for pollutants such as ozone, a list of 189 substances deemed to be “air toxics,” and clear intention to focus on “major sources.”

The new debate on possible contributors to global climate change, however, has focused around carbon, which some might argue is hardly a pollutant given its prevalence as a fundamental element of biology.  Similarly, indentifying sources of carbon presents a significant problem as any activity could be a contributor at some level.  As such, efforts by the EPA to try to force fit carbon regulation as pollutant under the CAA is resulting in a structure that is at best a gross distortion of the law resembling nothing close to its clear intent, at worst a job-killing mandate that will sacrifice our economy for no tangible global environmental benefit.

Issue at Hand:

Even according to EPA, restricting carbon emissions in the U.S. will do very little as developing countries such as China and India are dramatically increasing their emissions.  EPA’s actions would be a self-imposed regulatory agenda that stifles economic growth, creates higher energy prices and fewer jobs in exchange for very little, if any, reduction in global greenhouse gas concentrations.

The CAA was never designed to handle something like the regulation of carbon, as evident by the thresholds written in the law itself.  If the EPA finds evidence that requires action, the only responsible action would be for it to petition Congress to provide a law that takes into account the unique parameters of that challenge.  For EPA to act otherwise reveals more an underlying political agenda than any real accountability to our nation’s environmental and economic health.


Consider contacting your Members of Congress, in both the House and Senate, and urge them to vote YES to block the EPA.

Energy Tomorrow: Ways to Increase Domestic Production

Thursday, March 17th, 2011

Obama Looks to Increase Taxes on Small Business, Domestic Oil & Natural Gas Production

Tuesday, March 8th, 2011

Washington, DC – With rising gas prices, a permitting process on the rocks and protests emerging throughout the Middle East, it doesn’t take much to recognize that America is cruising down a path towards steeper energy prices and additional uncertainty. Add to that the President’s desire to increase taxes on domestic oil and natural gas production, and the picture gets worse: increased costs for consumer goods and services, an increase in unemployment and an almost certain decline in domestic energy production. 

In the Administration’s quest for “easy” money, it has targeted “Big Oil” – for a third straight year, no less – - citing that the last time he’s checked, “they’re doing quite well.” However, what the Administration fails to recognize is that the average independent producer is hardly “Big Oil;” they are mostly small, even mom-and-pop-like businesses. On average, independents employ about 11 people, but develop 90% of U.S. wells, produce 72% of U.S. natural gas and 44% of U.S. oil. These small businesses are an economic engine that if given the opportunity, will reduce our dependence on foreign energy sources, put Americans back to work and assist in getting our economy back on track.

 Barry Russell, president and CEO of the Independent Petroleum Association of America (IPAA) had this to say about the President’s budget:  

“Contrary to the president’s belief, his budget proposal does not target so-called “Big Oil”, but instead goes after the thousands of small businesses, America’s independent oil and natural gas producers, who on average employ only 11 workers. These small business producers are dedicated to finding and producing America’s energy resources, creating jobs, generating revenues and supplying reliable and affordable energy all across the United States.”

 At the end of the day, whether it’s Big Oil, Small Oil, or something in between, the impact that these proposed tax hikes will have on the overall economy and domestic energy production is unmistakable. Jobs will be lost, the price at the pump will rise and our dependence on foreign energy sources will remain.

Article provided by:  IPAA Washington Report (Nicole Daigle, staff contact)

IPAA 2011 Congressional Call-Up

Friday, March 4th, 2011

Mike Miller and Luke Miller recently represented Miller Energy Company in Washington, DC at the IPAA 2011 Congressional Call-Up.  As independent producers we continue to face many challenges on Capitol Hill.  The Call-Up provided an opportunity to educate new members of Congress about American energy production and the need for sound American energy policy that will help to provide reliable and affordable energy for our nation.   Topics of discussion included industry tax structure, hydraulic fracturing and regulatory actions.

Historic Election Results Create a Friendlier Atmosphere

Monday, November 8th, 2010

After reviewing Tuesday’s historic election results, IPAA is anticipating a significant change in direction on federal energy policy and the political attacks on our industry.

With Republicans in control of the House and seizing gains in the Senate, IPAA will work hard to educate new and returning members of Congress about the importance of our industry – the revenues, jobs and energy that America can depend on. Whereas the industry has battled against bad legislative proposals over the past few years, now IPAA will also need to reinforce its efforts in fighting bad regulatory proposals coming from the Obama Administration’s agencies and departments – from the Environmental Protection Agency to the Interior Department.

Republican gains in the House of Representatives were massive – the largest swing the country has seen since 1948. And while Republicans did not get enough new seats to control the Senate, the message from Americans has become clear, as voters have called directly for policies that will strengthen our economy, create jobs and make our nation more secure. IPAA is proud to represent the American oil and natural gas producers who are prepared to meet these important goals. (more…)

IPAA Education Program Called Best in the Nation

Tuesday, September 7th, 2010

 Dear IPAA Members and Colleagues:

Thoughout the nation, students are returning to school – and, once again, IPAA’s Education Center is gearing up for another busy year at our petroleum technology academies by expanding curriculum development, research field trips, guest speaker career series, student competitions and more.

But our work doesn’t just happen during the school year. This past summer, IPAA’s Educational Center organized the first IPAA Student Externship Training Program, called, “The best program of its kind in the nation,” by Superintendent Dr. Terry Grier of the Houston Independent School District (HISD).

The IPAA Student Externship Training program provides our future workforce a unique learning experience to better understand how geology, geophysics and engineering career paths fit into the energy industry. It also makes math, science and technology more meaningful and relevant through the hands-on engineering and geosciences curriculum they receive in our petroleum academies. IPAA is proud to sponsor this innovative high school student externship. We know it will serve as a powerful tool to stimulate the next generation of talented energy professionals who will drive this industry forward. (more…)

Attack on American Jobs and Energy Production

Friday, July 30th, 2010

IPAA  Action Alert

On Behalf of Barry Russell

As we described in IPAA’s earlier Action Alert, both the House of Representatives and the Senate are expected to consider energy legislation. This Action Alert addresses the Senate bill.

The Senate is expected to consider S. 3663, the Clean Energy Jobs and Oil Company Accountability Act of 2010, within the next few days. If passed, this piece of legislation would have a long lasting and detrimental impact on both offshore and onshore production of oil and natural gas.

IPAA has worked to oppose this bill and while changes have been made to parts of the legislation the bill, in its entirety, remains unacceptable.

Among the many poorly considered provisions in the bill are sections which would require full chemical disclosure of hydraulic fracturing fluids as well as language to remove all liability caps for offshore producers.

This bill puts American oil and natural gas production at risk as well as thousands of American jobs. Make sure your voice is heard. Please contact your Senators and tell them to vote NO on the Clean Energy Jobs and Oil Company Accountability Act. This is an important time for our industry and it is critical that you stand up for American energy production and stop this legislation.

Please act now and make your voice heard by clicking here!

The IPAA Prosperity Project enables independent oil and gas producers to play a vital role in the legislative process by advocating on behalf of pro-oil and natural gas legislation.

Miller Energy Company Supports IPAA Opposition to the CLEAR Act

Thursday, July 22nd, 2010

The U.S. House of Representatives’ Natural Resources Committee approved (27-21) the Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act, legislation that will add layers of burdensome red-tape to domestic oil and natural gas production. In addition to the ongoing offshore moratorium put forth by the White House – which could ultimately result in the loss of tens of thousands of good-paying jobs – this misguided legislation will unnecessarily curtail responsible American oil and natural gas production on taxpayer-owned land and in waters offshore. 

Barry Russell, president and CEO of the Independent Petroleum Association of America (IPAA) wrote a letter to Congressman Nick Rahall (D-WV), chairman of the House panel and the lead sponsor of the legislation, this week expressing opposition to the CLEAR Act, and issued this statement today regarding the CLEAR Act’s devastating economic and national security consequences:

 “IPAA and its members – who are responsible for drilling 90 percent of the nation’s wells – understand full-well that an exhaustive investigation must take place to determine what caused the tragedy in the Gulf, and we support commonsense policies that will help ensure that such incidents do not occur again.

“However, the CLEAR Act is focused more on perceived short-term political gain than on actual solutions. Following the Exxon-Valdez incident, Congress took appropriate and well-thought out action over nearly 15 months, evaluating the causes of that accident, and what needed to be done to address and mitigate those problems, before enacting sweeping legislation. Unfortunately, leaders in Congress are now legislating in a vacuum, as the cause of the ongoing Gulf incident has yet to be determined.

“This legislation, coupled with the Administration’s offshore moratorium, will continue to lead to fewer good-paying American jobs, and less stable and less secure supplies of energy needed to grow our economy. Just this week, in fact, the second rig operating in the Gulf left our oceans for foreign waters, with no plans to return. Every rig that sits idle, and every rig that leaves American waters, represents more energy that our nation will be forced to import from some of the world’s most unfriendly regimes. (more…)

New Report on Natural Gas Makes a Strong Statement

Tuesday, July 20th, 2010

A recently released report on natural gas written by researchers at the Massachusetts Institute of Technology (MIT) says that “natural gas is the most economical way to achieve a target of reducing carbon dioxide emissions by 20 percent.” The report, titled “The Futre of Natural Gas,” offers several policy recommendations which mirror those advocated by the Natural Gas Council, an umbrella organization for several natural gas trade associations in Washington, DC.

The new study is a part of series produced by the MIT Energy Initiative. Other reports have covered coal, nuclear power, and geothermal energy.

“The Natural Gas Council is pleased that this new MIT report affirms the importance of national gas in reducing carbon emissions. The report recommends that policymakers create a ‘level playing field’ where all energy resources can compete with each other, and where natural gas is likely to gain significant market share given its attributes. With this in mind, we hope Congress will ultimately approve a Clean Electricity Standard that includes a role for high efficiency natural gas generation” said Don Santa, president of the Interstate Natural Gas Association of America. (more…)

Gas Production at Record Levels

Friday, May 21st, 2010

API reported today that April gasoline production climbed to 9.1 million barrels per day, which is the highest level ever for April and second highest level for any month on record, according to the Monthly Statistical Report.

Gasoline demand also rose last month, and U.S. refinery utilization climbed above 85 percent for the first time this year. API Chief Economist John Felmy said the data indicates that refiners are cognizant of consumers’ need for gasoline and are producing fuel to keep America moving.

In one particularly bright spot, the April statistics showed that U.S. distillate demand surged 6.7 percent over the April 2009 level. The demand for distillates, including diesel fuel, historically has had a strong correlation with economic activity.

In April, demand for Ultra-Low Sulfur Diesel (ULSD) fuel–the fuel primarily used for the highway delivery of goods and services–increased by 3.0 percent. In 29 of the past 30 months, distillate demand had declined.

U.S. crude oil production continued near five-year highs at 5.5 million barrels a day.

For more information, the full Monthly Statistical Report news release is available on API’s website.

Article written by: Jane Van Ryan, Energy Tomorrow

America’s Oil & Natural Gas Producers Fight Legislation

Friday, May 21st, 2010

Statement from:  Bruce Vincent, Chairman of the Independent Petroleum Association of America

BACKGROUND:  America’s 5,000 independent natural gas and oil producers drill 90 percent of the nation’s natural gas and oil wells.  Independents have operated responsibly in the Gulf of Mexico (GOM) for decades and hold 90 percent of leases, producing about 30 percent of GOM oil and producing more than 60 percent of GOM natural gas.

“On behalf of America’s domestic oil and natural gas producers, let me first say that our thoughts go out to the families and communities affected by the tragedy in the Gulf of Mexico.

“The entire industry is dedicated to working together to protect the environment and to contain the damage.  Many of our member companies have offered supplies and services; others are directly helping with the clean-up efforts. This is certainly a time when actions speak louder than words.

“There are many emotions, understandably, involved right now. Controlling the well and protecting the environment are the main priorities today. And we are urging the federal government, as they consider new regulations and new offshore exploration policies, to first allow the facts in this incident to be investigated.

“IPAA believes in the following principles:

1. Any company operating offshore or onshore should be fully responsible (financial and otherwise) for all clean-up efforts.

2. There must be a fund to ensure that those affected by such incidents (i.e., fishermen, tourism, local businesses, etc.) will be able to fairly recoup lost costs without being caught in fierce litigation with large corporations.

3. The oil industry, collectively, should contribute to this fund and ensure its long-term viability.

“These principles are already a part of federal law in the Oil Pollution Act of 1990 (OPA 90) and the Oil Spill Liability Trust Fund (OSLTF). Certainly, some changes need to be made to update out-of-date OSLTF limits with additional industry funding.  (more…)

Committee Hearing Turns Focus to Industry Tax Issues

Friday, April 16th, 2010

The House Ways & Means Committee conducted a hearing on Wednesday, April 14th, on “Energy Tax Incentives Driving the Green Job Economy.” While bearing an innocent title, the hearing was reminiscent of the old fable about a wolf in sheep’s clothing. Initial reports had indicated that the hearing would not focus on President Obama’s budget proposal that aims to increase taxes on independent oil and natural gas producers to their highest historical levels. Unfortunately, those reports were incorrect.

Thanks to the work of IPAA’s Government Relations team, members of the Committee were prepared to speak on behalf of independents and the critical need for keeping the current tax provisions in place. During the hearing, the independents’ message was echoed repeatedly through members of the Committee and panel witnesses. IPAA also filed written comments to the hearing detailing the importance of the current tax structure to the production of American natural gas and oil.  (more…)

Learning About Fossil Fuels

Friday, March 26th, 2010

Take some time to click through the following links to learn about America’s energy sources — Natural Gas, Oil and Coal


We’ve all seen the blue flame on top of a gas stove or beneath a gas furnace. But where do we get the gas that fuels the flame?

An Energy Lesson

* Part 1: Fueling the Blue Flame

* Part 2: The History of Natural Gas

* Part 3: Getting Gas from the Ground…and the Sea


Strong Message sent to the Energy & Natural Resources Committee

Friday, March 19th, 2010

Last Friday, the Natural Gas Council (NGC), a group of several natural gas industry associations including IPAA, delivered a strong message to Senator Jeff Bingaman (D-NM), chairman of the Energy and Natural Resources Committee, that “natural gas will be essential to meeting the nation’s greenhouse gas reduction goals.”

The letter was sent in response to the latest push in the Senate to adapt a nationwide “clean energy” standard, as opposed to a “renewables-only” approach.

“Natural gas located in abundance in shale formations in more than 20 states has led to a 39 percent increase in natural gas supply,” read the letter.  “This has transformed the ability of the industry to respond more rapidly, with more flexibility and on a larger scale than ever before, enabling greater use of this domestic energy resource. Assuming continued access to our vast resource base, natural gas can and should be used in the power sector to reduce greenhouse gas emissions, and clean energy policies developed by Congress should employ natural gas as a solution.”


Offshore Drilling: More Delays?

Tuesday, March 9th, 2010

Interior Secretary Ken Salazar says a new 2012-2017 Five-Year Plan providing a framework for offshore drilling will be released later this month. He made the announcement yesterday while testifying before a Senate panel on the department’s proposed 2011 budget.

“What we are attempting to do is to pull together a plan for the Outer Continental Shelf that will cover both the existing current plan…the 2007-2012 plan, as well as looking into the future,” Salazar said. (Platts’ Commodity News)

At this point it’s unclear how combining the two leasing plans will affect U.S. offshore energy development: (more…)