Miller Energy

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

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.

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

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.

Updates:

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.

Background:

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.

Action:

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

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  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.

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…)

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…)

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…)

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.”

(more…)

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…)

WASHINGTON – Energy In Depth executive director Lee Fuller issued the following statement today subsequent to news from the House Energy & Commerce Committee that the panel is interested in learning more about a critical, 60-year-old energy technology known as hydraulic fracturing:

“Hydraulic fracturing is an essential component of producing clean-burning energy in America today, and to the extent the committee’s inquiry into this process helps clear up some of the misconceptions that have come to be associated with it, it’s a study we look forward to contributing to. (more…)

WASHINGTON – During his first State of the Union address before a joint session of Congress last night, President Obama highlighted the need for Washington to make “tough decisions about opening new offshore areas for oil and gas development” and the need for “more production.” (more…)

By Jane Van Ryan of EnergyTomorrow

Perhaps it’s the weak economy, or perhaps it’s ClimateGate. Whatever the cause, it appears that support for climate change legislation is waning.

(more…)

By Jane Van Ryan

To understand the potential impact of the administration’s proposed budget, one must be able to connect the dots. Simply put, one must be able to anticipate how a policy proposed by the federal government could eventually affect the average American consumer.

By Jane VanRyan
Energy Tomorrow

As we’ve been saying here for the past several weeks, the oil and natural gas industry could help to pull the economy out of the doldrums if it were allowed to search for and produce more domestic energy. The United States has abundant energy resources, and developing them could create hundreds of thousands of well-paying jobs, send much needed revenues to federal, state and local governments to pay for services, and improve U.S. energy security. (more…)