Production of Domestic Energy Resources Should be Primary Focus for
Energy Strategy, IOGCC Asserts
OKLAHOMA CITY -- Maximizing the production of domestic energy resources
should be a primary focus of U.S. Department of Energy (DOE) and other federal
agency efforts, representatives of oil and gas producing states asserted
last week. The suggestion came in response to the DOE's draft Comprehensive
National Energy Strategy (CNES).
Letters of comment were submitted on behalf of the Interstate Oil and Gas Compact Commission (IOGCC) by Sen. Jeff Bingaman of New Mexico and Gov. Jim Geringer of Wyoming, and by Rep. J.C. Watts of Oklahoma, and Gov. Gary Johnson of New Mexico. All are part of IOGCC "leadership teams" addressing national energy strategy issues.
Bingaman and Geringer focused their comments on the CNES points dealing with the need for petroleum research and development (R&D). The IOGCC, through a state-led National Oil and Gas Policy, addresses several of the same issues as the CNES.
"As leaders in the IOGCC's effort to promote the expansion of research to recover domestic reserves, we support the proposed increase in petroleum R&D funding in both the private and public sectors," commented Bingaman and Geringer. "This is a need recognized by both the DOE and the states for many years - while we see actual research spending constantly decrease."
On the same line, the IOGCC is concerned about the decline in the number of trained professionals entering and established in the industry. A recent IOGCC study on the shortage of petroleum engineers, petroleum geologists, and entry level rig workers shows the direct effect on the nation's oil and gas production.
"The loss of U.S. leadership in petroleum technology threatens to further aggravate our overdependence on imported oil, and the DOE would be well advised to address the widening gap between the industry's requirements and the pool of scientists available to lead the industry in the next generation," wrote Bingaman and Geringer.
According to the submitted comments, research spending must also target production from marginal oil and gas wells. Geringer and Bingaman point out that most of the producers of marginal wells tend to be the smallest of the small independent producers. The major oil companies and large independent producers who have research budgets don't operate these wells, therefore they do not devote research dollars to the needs of these facilities.
The leadership team of Watts and Johnson concentrated their comments on the absence of incentives to help revitalize domestic production. The DOE draft strategy calls for reversing the decline of domestic production, but besides the development of technology, there is no consideration of what will be required to accomplish this goal, Watts and Johnson note. They advise the implementation of incentives to meet the goals of adding 400 million barrels of additional domestic oil by 2005 and increasing natural gas supply by up to 6 trillion cubic feet by 2010.
Their comments also address the importance of energy security and the threat of a greater dependence on foreign oil.
"We are now faced with the real prospects of supply disruptions and an escalating dependence on imported oil," they commented. "We urge the DOE to include a specific strategy that insists upon an evaluation of federal regulation in this new light and seeks to work with states and other constituencies for a vibrant domestic petroleum industry."
A vital point Watts and Johnson make is the absence of an honest federal commitment to the CNES from all agencies. "The states do not see that commitment now from any federal entity except the Department of Energy," they state. "Unless the Department of the Interior, the Environmental Protection Agency, the Department of Agriculture and the White House also develop policies sensitive to the principles outlined in [the] CNES, success will not be possible."
Christine Hansen, IOGCC executive director, also filed comments with the DOE. Hansen called upon DOE to provide strong leadership as the nation faces issues that affect national energy including national security and petroleum research.
"The IOGCC fully supports the U.S. Department of Energy's views on the importance of government, particularly the federal government, on helping lead the country in funding and encouraging R&D," said Hansen. "In addition, the IOGCC has encouraged its member states to consider innovative approaches to encourage these activities on the state level."
The IOGCC is a 62-year-old state government organization representing the governors of 29 oil and gas producing states. The IOGCC's mission is to promote conservation of domestic oil and gas by minimizing waste and maximizing production while protecting health, safety and the environment.
