Category: Blog (Page 3 of 10)

In the late 90s, I was asked to assist the country of Bulgaria in their oil and gas development. Leading the effort was Dr. Boyko Nitzov, a Bulgarian, who was then working at the University of Oklahoma along with Dr. Dennis O’Brien then the University’s Director for the Institute for Energy, Economics and Policy at Sarkey’s Energy Center.

Dr. Dennis O’Brien and Dr. Boyko Nitzov were providing major studies of oil and gas in Kazakhstan, executive management training for international delegations from Central Asia and Eastern Europe and in Bulgaria for the US Trade and Development Agency. Dr. O’Brien had been instrumental throughout the years of assisting me with the International Energy Policy Conference. He introduced several high profile energy leaders to the conference including the CEO/President of Phillips Petroleum and the Chairman/President of PDVSA.

Dr. O’Brien held several distinguished positions throughout his career including the chief economist of Caltex Petroleum Corporation, managing director of Petroad, which assisted clients in developing and implementing strategic business visions and planning for the global energy industry, and served as deputy assistant secretary for International Energy Security for the US Department of Energy. He passed away in 2005 and is greatly missed.

Dr. Nitzov was highly respected among his fellow Bulgarians especially with the Bulgarian government and the country’s oil and gas sector. He has served as Director of the Eurasian Energy Program, Atlantic Council in Brussels, Belgium.

What concerned Bulgaria and Eastern Europe at the time was the great dependency on Russia’s natural gas and energy support. Our goal was to evaluate how we could assist Bulgaria in becoming more self-reliant.

During my trips to Bulgaria along with Dr. Nitzov, we found that the Bulgarian oil and gas sector was not being managed at full potential. The infrastructure needed upgrading, the management needed up-to-date technological training, research and development was at a minimum and US know-how and support was a high priority greatly needed. One of the successes the team was able to assist with successfully was with the development of an underground gas storage facility in Bulgaria.

We identified fields onshore that had not reached their full development. Also, we identified potential offshore locations on the Black Sea. If our research could have factored in the application of today’s science of combination of horizontal drilling and hydraulic fracturing, there is no doubt in my mind, that Bulgaria’s resource development would be greatly enhanced.

Now we fast forward to 2014, as the Wall Street Journal recently addressed, “there is a strategic case for more U. S. natural gas exports to Europe, as well as for more investment in projects…which would bring gas from the Caspian Sea to Europe without going through Russia.”

Leaders from Eastern Europe go on to state “natural gas would be much welcome in Central and Eastern Europe, and Congressional action to expedite exports (liquefied natural gas) to America’s allies would come at a critically important time for the region”.

The US has an abundance of natural gas. Russia is aggressively working to maintain Eastern European dependency on its resources including natural gas.

It is time we come together: The U.S. has the immediate challenge of striving for energy independence but also, global energy security for others. It is extremely important that the US be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The US needs energy security. The Global Economic Reality: America Needs America’s Energy and the World Needs America’s Know-How!

Together we can create the People’s Energy Plan! Go to www.peoplesenergyplan.com to join the effort.

Facebook: America Needs America’s Energy with over 10,000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!

Natural Gas is now front and center in the future of US energy. Over the last few years, shale gas has become a major topic of discussion in the media, for several reasons. Until recent years, natural gas was primarily produced from “conventional” reservoirs via vertical technology.

“Unconventional” natural gas production includes hydraulic fracturing and shale formations where natural gas is trapped. Due to technological advancements, shale formations have been discovered in numerous basins throughout America.

Natural gas is an energy answer that is available today and can be efficiently used in both the power generation and transportation sectors. We should definitely be putting it to use now.

For years I have voiced my belief that natural gas reserves are critical to a strong US economy and extremely important for America’s energy security. Natural gas is an abundant, clean fuel that has many domestic uses—from heating our homes to serving as an alternative to gasoline. It is the bridge fuel to our country’s energy sustainability.

The US is now embracing the growing use of natural gas. EIA (Energy Information Administration) projects that natural gas will account for nearly two-thirds of new capacity additions to the US power generation fleet through 2040 and the EIA projects that natural gas will be 28 percent of the US electricity mix through 2040.

The American Chemistry Council projects there will be as many as 1 million more US manufacturing jobs by 2025 due in great part to shale gas production.

The Tennessee Valley Authority which is the largest public power utility in America has 9 million customers in seven states. Over the past two years, the increase of the natural gas in the fuel mix of TVA went from between 3 and 5 percent to 20 percent, a dramatic increase.

It is hard to believe that in the 80s, the US passed laws that prohibited the construction of adding more electrical generating plants that used natural gas as primary fuel. Today, we see a new energy horizon. No doubt that natural gas will lead the way and will be very significant in the years ahead.

It is time we come together: The U.S. has the immediate challenge of striving for energy independence. It is extremely important that the U.S. be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The U.S. needs energy security. America Needs America’s Energy!

Together we can create the People’s Energy Plan! Go to www.peoplesenergyplan.com to join the effort.

Facebook: America Needs America’s Energy with over 10,000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!

Forty years ago, in the spring of 1974, a group of oilmen and business leaders came together in Tulsa to form The International Society of The Energy Advocates. The reason the organization was primarily formed was to counter the OPEC (Organization of Arab Petroleum Exporting Countries) embargo. The 1973-74 embargo sent a shock through the world, oil production was cut along with shipments to the U.S.

One of the items in force since and because of the Arab embargo is the ban on exporting U.S. crude oil. Keep in mind, during the 1970s, the U.S. consumption began to outstrip production, and America started importing more oil than it produced. Just six years ago, pre-Bakken oil and U.S. oil shale plays, it was projected that oil production in the U.S. would likely continue its downward trend. At that time the U. S. imported over 60 percent of the needed oil for consumption. Thanks to technological advancements, there is a new energy horizon.

Today, U.S. oil production is increasing therefore many energy producers want to see the ban on exports lifted. Congress has now stepped in and is beginning in-depth research. An editorial in favor of the ban in USA Today states, “trying to artificially hold down the price of domestic crude will, over time, discourage exploration and mute a stunning production boom that is helping drive the USA tantalizingly close to energy independence, a national goal since the ’73 oil shock.”

Also, Adam Sieminski, EIA (Energy Information Administration) administrator voiced his opinion regarding U.S. oil exporting stating “I’m not sure we should just automatically assume that would be bad….it might actually be a way to grow the economy, create jobs and ultimately help reduce prices.” The EIA states that domestic oil production is expected to increase from 6.5 million barrels per day last year to 8.2 million barrels per day by the end of 2014.

Since this is an election year, we will see if there is any action taken. In the meantime, America Needs America’s Energy and We Must Continue to Tell Our Story!

It is time we come together: The U.S. has the immediate challenge of striving for energy independence. It is extremely important that the U.S. be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The U.S. needs energy security. America Needs America’s Energy!

Together we can create the People’s Energy Plan! Go to www.peoplesenergyplan.com to join the effort.

Facebook: America Needs America’s Energy with over 10,000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!

Over eighteen months ago, my book entitled “America Needs America’s Energy: Creating Together the People’s Energy Plan” was released. Since that time, I along with The Energy Advocates have been telling the energy story through radio interviews in over 30 States, over 150 US radio stations, on The Weekly Roundtable radio show, columns/blogs, speeches, op-eds, newspaper interviews, book-signings, and the list goes on.

You, the reader, have been instrumental through your support and encouragement! For example, the support on Facebook: America Needs America’s Energy there are over 10,000 likes. I have been blessed with the strong support from my hometown of Elk City and western Oklahoma and from Oklahomans as well as the support throughout the US. Thanks to Each of You, the message is being made clear: America Needs America’s Energy!

Of the over 10,000 Facebook followers the top ten cities of support are: 1. Oklahoma City/Edmond, Ok., 2. New York City area, 3. Elk City and area, 4.) Chicago, 5. Houston,
6. Atlanta, 7. Los Angeles, Ca., 8. Tulsa, 9. St. Louis, Mo., 10. Dallas, Tx. Rounding out the top twenty are Lubbock, TX., Detroit, Philadelphia, Jackson, Ms., Miami, Fl., San Antonio, Orlando, Fl., Flint, Mi., Memphis and Phoenix. Again, Many Thanks for Your Support!!

As I continue to state, “future generations are depending on us to keep the American dream alive. For too long we in America have been wasting time blaming the energy industry or the government for failure to adopt a national energy strategy when we should be responsible for creating the plan.”

As consumers of energy, we must drive the process, evaluating how we can best leverage our natural resources here at home to ensure long-term energy independence and security. I along with The Energy Advocates will continue to “Tell Our Story” thanks to your strong encouragement and support!!

“We are the ones who will have to do it, because our societal institutions have proven they are not up to the task. It is time to take a stand, evaluate your own impact on our nation, and play your part in preserving our country. Energy is the future of America and America Needs America’s Energy!!”

It is time we come together: The US has the immediate challenge of striving for energy independence. It is extremely important that the US be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The US needs energy security. America Needs America’s Energy!

Together we can create the People’s Energy Plan! Go to www.peoplesenergyplan.com to join the effort.

Facebook: America Needs America’s Energy with over 10,000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!

“U.S. Unconventional Oil and Gas Development-Transforming America’s Environment and Energy” was the theme of a recent event held in Oklahoma City. Marianne Horinko, former EPA Acting Administrator under President Bush, and President of The Horinko Group, Washington, D. C. and I were the featured speakers. Marianne spoke on environmental issues and I addressed energy issues.

This unique gathering also served to memorialize the completion of the piloted Mentoring Environment and Energy Mentor-Protégé Program with participants from several organizations and companies including DEQ, Devon, Chesapeake, and Crowe & Dunlevy.

My presentation was highlighting the many issues that are confronting the oil and gas industry:
repeal of percentage depletion allowance and expensing of IDCs, Keystone XL pipeline authorization, Lesser Prairie Chicken designation as endangered species, Dunes Sagebrush Lizard designation as endangered species, attempts to change the Endangered Species Act, the Study of hydraulic fracturing by the Department of Energy and EPA, Bureau of Land Management ruling on hydraulic fracturing, air emission regulations adopted by EPA, U.S. oil and gas exporting, and other energy issues.

Also during my presentation, I addressed President Obama’s State of the Union remarks about energy. President Obama stated “America is closer to energy independence than we’ve been in decades”. “One of the reasons why is natural gas”. But the President does not stop there, he states “IF extracted safely it’s the bridge fuel”. This indicates strong support of the natural gas industry but then he adds the word “if” which is not fully defined.

Though the natural gas industry is pursuing drilling on federal lands, the President states, “I’ll use my authority to protect more of our pristine federal lands for future generations.”

Then when it comes to incentives in place that have encouraged drilling throughout the U.S. , the President states “Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel (natural gas) industries that don’t need it, so that we can invest more in fuels of the future that do.”

Marianne Horinko’s presentation was based on a recent report which her company designed to “facilitate effective and constructive communication between local and community-level stakeholders, including public, government, and industry members, by describing the relationship between stakeholder decisions and potential community benefits and costs associated with U.S. unconventional oil and gas development with the goal of long-term community well-being “

“Potential positive and negative community-level economic, environmental, health, and social impacts associated with unconventional oil and gas development are discussed with the report. Although prescriptive recommendations regarding regulatory requirements and/or industry practices were not offered, the report highlights some key considerations that communities near oil and gas development should review. It is important to address these considerations in the context of local conditions and community values…There is not a one-size-fits-all solution to most complex problems, but stakeholders can and should work together during unconventional oil and gas development to find optimum solutions for all.”

It is time we come together: The US has the immediate challenge of striving for energy independence. It is extremely important that the US be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The US needs energy security. America Needs America’s Energy!

Together we can create the People’s Energy Plan! Go to www.peoplesenergyplan.com to join the effort.

Facebook: America Needs America’s Energy with over 10,000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!

In 2001 I teamed up with Academy Award winning producer Gray Frederickson to begin a film production company. Since that time, I have heard from several in the movie industry who believe that the oil and gas industry should not be respected. Several in Hollywood believe that the oil and gas industry is only for the greedy and that it is not interested in the welfare of others and of the environment.

However, I should point out that the movie industry is a major user of energy and therefore needs the oil and gas industry. Energy is needed from the beginning to the end of production as well as into the marketing and distribution of the films.

The movie industry needs transportation and the use of power generation. A film project often needs: transportation to and from the sets, the use of autos, trucks and other vehicles including planes and helicopters, fuel for traveling and living for the crew, transportation of animals, air transportation, taxis/limos, phones, rail transportation, caterers, and products made from petroleum including wardrobes, film, air conditioners, carpet, combs and brushes, cameras, and many other items that I show on pages 157 to 159 of my book “America Needs America’s Energy”.

Electricity is needed for lighting, equipment, music, trailers for the actors and others, optical effects, sound, set construction, special effects, generators, computers, photography, set operations, sound stage, ac/heat, washing/drying of clothes, dishwashing, and other. There is even a Gaffer assigned to the specific movie project, (a gaffer heads up the electric department) and electricians are needed.

The sound for the movie needs a mixer, boom operator and microphones, to mention a few of the items needed.

Millions upon millions of dollars are expended for energy to make and distribute the films for our enjoyment. Hollywood has been successful, in great part, due to the energy industry.

We, as consumers, can view the films on DVDs, at the theatre, at our home with the use of energy. The movie industry wants for everyone to strive for energy efficiency and environmental preservation.

Think about the use of energy and the importance of the oil and gas industry next time you watch an action movie. Know that there are those in the oil and gas industry who are working 24/7 in all kinds of weather supporting the movie industry and providing us all a wonderful lifestyle.

There would be no strong movie industry without a very strong energy industry. There would be no strong movie industry without a strong consumer base. It is time we come together: The US has the immediate challenge of striving for energy independence. It is extremely important that the US be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The US needs energy security. America Needs America’s Energy!

Together we can create the People’s Energy Plan!

Go to www.peoplesenergyplan.com to join the effort.
Facebook: America Needs America’s Energy with over 10,000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!

During August of 1992, I was a member of 20 member delegation on a visit to Russia under the auspices of People to People International and the Ministry of Petroleum for the “Soviet Union”.
The mission study provided us an opportunity to interact with professional peers and to discuss opportunities.

Major changes were occurring at that time. There was the introduction of the free market economy and other reforms taking place. The US, along with world, was encouraged about the opportunities.

When President George H. W. Bush (Honorary Chairman of People to People International) visited Eastern Europe, he stated, “The Iron Curtain has just begun to part.” We saw the beginnings of major changes to occur in Russia.

The study mission provided me a unique opportunity to witness history which included the anniversary of the coup; to establish valuable contacts and friendships through professional and personal exchanges with my colleagues and counterparts; to visualize the frontier of potential change that the Russian Federation was facing; to gain an insight as the many business opportunities that existed; to experience the hospitality of the Russian people; to be a member of the first American/Canadian delegation in over 70 years to visit the Makhachkala/Dagestan Region; and to be the first People to People delegation to have dinner in the homes of our hosts in Moscow.

As one delegation colleague stated at that time, “one can only hope that men and women of good will, learning and vision will guide Russia and its people through this painful and ominous transition period. Any oil and gas company that undertakes a project there in the near future must be prepared for gnawing uncertainties as to the legal framework and its enforcement, the country’s evolving economic policies and the role of the military”.

Unfortunately, though the Russian people and the world needed reliable oil, its leaders throughout the years went back to the old ways of doing business. I worked on projects in Russia from 1992 to 1998 and found it personally very difficult to do business in Russia.
(At that time the US was looking throughout the world for oil ventures as the shale play the US is experiencing today was not in play.) We pulled out of Russia in 1998 as the legal framework and policies were not stable.

As I mentioned in my last column, Russia and China are aggressively teaming up. Russia has an abundance of oil and natural gas reserves. China needs those reserves.

The US has the immediate challenge of striving for energy independence. It is extremely important that the US be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The US needs energy security. America Needs America’s Energy!

Together we can create the People’s Energy Plan! Go to www.peoplesenergyplan.com to join the effort. Facebook: America Needs America’s Energy with over 9000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!

There are several energy proposals before the US Congress to be debated in 2014. Most of the proposals center on the discussion of tax reform. Therefore, there is the focus on raising revenues.

For example, US Senator Max Baucus has drafted a proposal to essentially raise taxes on oil and gas producers through the elimination of percentage depletion and the repealing of intangible drilling costs deductions. The Baucus proposal has intangible drilling costs being amortized over five years.

Currently, tax policy for the oil and gas industry is much like US manufacturing companies. The companies are allowed to deduct business expenses therefore providing incentive for investment.

The oil and gas industry is highly concerned about the negative impact that such provisions would have on production and US economic development.

According to the Kansas Independent Petroleum Association, “recent studies show that repealing percentage depletion and IDCs would result in fewer wells drilled, fewer Americans employed, and less energy produced here in the US. This impact is both significant and immediate. According to studies, over 190,000 Americans would be unemployed within one year if percentage depletion and IDCs were repealed; growing to 265,000 jobs lost over a decade.”

Definitely, not a great scenario especially when America’s energy and manufacturing sectors have been moving positively forward.

In Texas, Townes Pressler, Chairman of the Texas Alliance of Energy Producers, states, “percentage depletion and expensing of intangible drilling costs have been key provisions in the tax code that allowed independent oil and gas producers to finance the technological developments that the industry is using to unleash record amounts of domestic crude oil and natural gas in Texas and the US”.

The private and public sectors should work together. Since I entered the energy business in 1977, the industry has continually been forced to defend itself. For example, in 1985 I testified before the US Senate and Natural Resources Committee on the potentially devastating effects that proposed regulations at that time would have on the oil and gas industry in Oklahoma, in terms of job loss and reductions in drilling expenditures, at a time when this vital industry most need support.

American oil and gas companies have a history of being major contributors to their communities by providing funds for local schools, hospitals, and charities. To achieve energy independence, the American people must rally behind these companies and recognize the essential role they play in powering our lives 24-7 at home and work.

It is extremely important that the US be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The US needs energy security. America Needs America’s Energy!

Together we can create the People’s Energy Plan! Go to www.peoplesenergyplan.com to join the effort. Facebook: America Needs America’s Energy with over 9000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!

Since the 1970s, America’s main energy security threat has been OPEC, (Organization of Petroleum Exporting Countries). P. R. China is well under way to position itself as the next major global energy market threat.

Though the US is producing abundantly more oil and natural gas domestically and was a net exporter of petroleum products in 2011, China has taken a keen interest in the development and investment in US energy assets.

Energy companies within Oklahoma and throughout the US have partnered with China companies. Is that good or bad? Yes.

The influx of foreign investment in our natural resources is a mixed blessing. On the one hand, it has provided cash infusion for some of our US energy companies. On the other hand, foreign ownership in US company assets could present an energy security threat in the future.

China has been spending billions of dollars to acquire interests in US energy companies. It is dramatically increasing its investment in the US.

China’s energy card is being used to position itself as a major investor in all continents throughout the world.

China is focusing in on natural gas development. The manufacturing of LNG tankers is becoming a focus of China.

Demand for oil continues at a rapid pace. China’s electricity consumption is projected to nearly triple over the next decade, growing to an average of over 4 percent per year.

I have seen first-hand from my first business trip to P.R. China in 1994 to my last business trip in 2006 how tremendous economic development has occurred and is continuing to occur. The demand for energy that P. R. China will need in the years ahead is staggering.

China has closed in on the US when it comes to buying oil from the Middle East. So both countries, the US and China, are showing strong interest in the Middle East region with their military presence.

The US, for many years, has served as the energy security “police” of the Middle East region, making sure that all ports remained open for business. There is now the potential for additional tension build-up in the region.

The front cover of The Journal of International Security Affairs, Fall/Winter 2013 sums it up best, “China’s Rise…And Why We Should Worry”.

On top of all this, recently, Russia and P. R. China are teaming up. Russia agreed to supply China with more oil and will develop an oil refinery together.

The good news is that America is becoming less and less dependent on foreign oil especially from the Middle East region.

It is extremely important that the US be in a strong position of securing energy reserves within its own boundaries. Therefore, we need a plan. The US needs energy security. America Needs America’s Energy!

Together we can create the People’s Energy Plan! Go to www.peoplesenergyplan.com to join the effort. Facebook: America Needs America’s Energy with over 9000 supporters plus and growing. — America Needs America’s Energy: Creating Together the People’s Energy Plan!

Last week’s column and in this week’s column, I address questions that I have been asked regarding energy issues and views.

-How has the energy picture changed in the past five years, from a global perspective?

In 2008, the BRIC countries (Brazil, Russia, India and China) were the focus, with economic experts predicting they would become the growing powers for the twenty-first century.  As the world’s consumption continued to increase, analysts thought it might be difficult for current levels of production to satisfy demand.  Today, China is already taking 38 percent more oil from the Middle East than the United States, and its electricity consumption is projected to nearly triple over the next decade.  But the world remains heavily dependent on oil from Saudi Arabia, Russia, and Iran—all of which are politically unstable.  The United States needs an abundance of oil which makes a strong case for why “America Needs America’s Energy”.

-What are the major variables that impact the energy industry in America?

The major moving parts that impact us in the energy industry can include increasing demand, terrorism, and inadequate government policy.  The good news is that recent finds of oil and gas reserves in our country mean production is far from peaking, and demand continues on the upside for both transportation and power generation in a digital age.   Meantime, we face continual terrorist threats and suffer from government policy focused solely on alternative energy options that, while potentially attractive in the long-run, cannot meet the demand in our country in the near future.

-What are the most common misconceptions about the energy industry?

For years the public perception of the energy industry has been that of fat cats, ruthless J. R. Ewing types who make a killing off oil in their own backyard, when nothing could be further from the truth.  Today 60 percent of our domestic oil production comes from thousands of average Americans who operate wells producing ten barrels or less a day but provide these people with a living.  And now, hundreds of everyday citizens who own land and royalty rights in Pennsylvania, for example, are benefiting from oil and gas lease bonuses.

As for “windfall profits”, US oil and gas companies’ net profit margins lag far behind several industrial sectors.  Another bogus idea is that energy companies do not pay their fair share of taxes when, in reality they do.  This is another reason why “America Needs America’s Energy” because relying on our own sources not only adds to our tax coffers, but creates jobs that

stimulate the economy.

America Needs America’s Energy!

Together we can create the People’s Energy Plan!  Go to www.peoplesenergyplan.com to join the effort.  Facebook:  America Needs America’s Energy with over 8500 supporters plus and growing.  —   America Needs America’s Energy:  Creating Together the People’s Energy Plan!