Category: Blog (Page 4 of 10)

This column and in next week’s column, I will address questions that I have been asked regarding energy issues and views.

-What are the environmental concerns about hydraulic fracturing, known as “fracking”, and how is the oil and gas industry addressing them?

Consumers need to know that the hydraulic fracturing process, or “fracking” as it is more commonly known, has been in use for more than sixty years.  Once the drilling of a well has been completed, the shale is cracked by tiny ruptures, allowing the application of water, sand, and a small amount of chemical additives to release natural gas, for example.  In America Needs America’s Energy, I explain that there have been minimal reports of improper disposal of wastewater and that energy companies involved in fracking realize the importance of water resources for generations ahead, so they are applying technology to clean and reuse water.  Many companies post information about the fracking fluids being used.  Please note that I go into more detail in my latest book America’s Energy:  Issues and Views, Volume 1.

-Explain why you believe that America is inevitably moving toward a hydrogen economy and how will that impact the consumer.

First, the use of hydrogen greatly reduces pollution.  When hydrogen is combined with oxygen in a fuel cell, energy in the form of electricity is produced.  This electricity can be used to power vehicles, as a heat source, or applied to other uses.  Second, hydrogen can be produced locally from numerous sources.  Hydrogen gas can be produced from methane (natural gas) for example.  Lastly, if hydrogen is produced from water, we have a sustainable production system.

-How can consumers participate in creating an energy plan for this country?

The first step we can take is to conduct a self-audit of our own personal energy use.  In America Needs America’s Energy, I provide a sample copy of a standard report that homeowners in metro Nashville receive following a voluntary in-home energy evaluation (audit).  This Energy Action Plan shows participants the project energy savings associated with each recommended measure, such as insulating your water heater or attic.

Following that, I have provided Personal Energy Evaluation Journal forms through 2016.  The idea is to create your own personal energy plan based on the evaluation and then develop it for the several years.   At the end of each year, you can check to see if you have met your goals.  If not, you can either adjust your goals for the next five years, or lies the steps needed to achieve your personal energy goals in the near future.  You may want to include others in this initial planning stage, such as your family, your company, or your organization.

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!

There is no question that tax reforms are needed.

However, two provisions that continue to be debated are the percentage depletion allowance and the intangible drilling costs deduction, (IDCs).

The oil and gas industry depends on these two provisions.  The provisions are not identified to be subsidies or loopholes.

To the oil and gas industry, these provisions are important for producers to have capital sustainability and to have a vibrant sector.   With improved cash flow, the industry can invest money into economic development and jobs that are so critical to the US.

Studies have shown that by repealing the percentage depletion and the IDCs the US would face the impact of less wells being drilled, less jobs, and less production.  There is no doubt that this impact could be dramatic at a time when the industry is moving forward aggressively.   

It has been estimated that over 190,000 jobs would be lost within one year if both provisions are repealed.

These two provisions are cost recovery measures.  This is a time when US policies should strengthen our development of this country’s great sources of oil and gas.

Economic stability is closer to being within reach when the US has a strong energy sector.    According to the latest Business Executives for National Security’s report entitled “Security in the New Energy Landscape:  Assessing the Geostrategic Impact of the Unconventional Oil and Gas Revolution”, “the US shale boom is unique, from its origins to its tremendous global implications.  The combination of accessible geology, cost-effective technology, and a robust support and investment system fostered a new industry not replicable anywhere else in the world.  The boom helps meet rising demand for hydrocarbons in the developing world by increasing global supply elasticity.  New jobs are invigorating the American economy and the US might even become an energy exporter for the first time in decades.  Moreover, the US security portfolio is adapting.”

As US Congressman James Lankford recently stated, “The tax policy for energy exploration is similar to every other American manufacturing business.  It allows companies to deduct business expenses to incentivize private capital investment and spur growth in high-paying American jobs.”

America’s energy sustainability can only be achieved with the right incentives and right provisions being in place.  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 Peoples’ Energy Plan!

A few weeks ago, my column was entitled “Mexico and North America’s Energy”.

As I stated, “several years ago, I had the opportunity of serving on an advisory committee appointed by the Mexico Trade Commissioner who was based in the Dallas, Texas regional office.  The advisory committee’s focus was trade and tourism between Mexico and the US.  The committee was comprised of US and Mexico business representatives.

One issue that was addressed was US and Mexico energy relations.  Since 1938, Mexico has been under strict governmental guidelines with no privatization in place.”

As I stated in my book, The Braking Point, “the first sign of changing of the guard came in 1938 when Mexico President Lazaro Cardenas nationalized the nation’s oil.  Cardenas made this move to prevent further Americanization of Mexico.

This move pushed all of the American oil companies out of Mexico…This move also gave Mexico full control over the production and export of oil.”

Seventy-five years later, in August, 2013, President Enrique Pena Nieto proposed a plan to open its oil and gas sector to foreign investments through private-public partnerships.

Since the last column on this issue, Mexico’s Congress has recently passed constitutional amendments overturning the nationalization of the oil industry.  Mexico is now open for business when it comes to the energy sector.

There is no doubt in my mind that leaders in Mexico wanted to reap the same benefits that the American oil and gas industry has made over the last few years.

As I stated in August in an interview with the Wall Street Journal’s MarketWatch, “Mexico has strong potential to enhance oil and gas production by the support of US technology alone.  With US technology and expertise, Mexico and North America could potentially benefit in a very positive way.  With that said, there are a lot of details to work out.”

Although the nationalization of Mexico’s petroleum industry did not help the people of Mexico for the past seventy-five years, this move can hopefully bring economic stability to Mexico along with North America.

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 Peoples’ Energy Plan!

As stated in my book, America Needs America’s Energy:  Creating Together the People’s Energy Plan, America’s energy future is in our hands.  We can no longer wait for the government to rally us.  History has shown this will not happen.  The time has come for all of us, the people, to take control of our energy future here in America.  That starts with us keeping a Personal Energy Journal, which will assist us in planning and executing our personal energy plans.

The idea is to create your own personal energy plan for 2014 and years ahead based on the evaluation form in my book.  Based upon your evaluation, your goals will be written down and self-checked to see if you have met your goals by year end.  If not, you can either adjust your goals for the next few years or list the steps needed to achieve your personal energy goals in the near future.  You may want to include others in this initial planning stage, such as your family, your company, or your organization.

As you proceed with creating your Personal Energy Journal, you’ll find a lot of helpful background information in the first two parts of the book, including pros and cons of various energy forms currently available.  In addition, in the back of the book you will find a glossary of energy terms, suggested reading, and web links that offer further assistance.  But don’t count on what you have read in my book alone.  Do your homework.  The energy industry is moving forward in innovation and technological advancement, so try to stay current with the latest information available.

You will find that your Personal Energy Journal will become a part of your journey into understanding the need for the People’s Energy Plan, as well as a statement of your personal policy of striving for energy efficiency and environmental preservation.

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 8000 supporters plus and growing.  —   America Needs America’s Energy:  Creating Together the People’s Energy Plan!

Recently, I addressed the South Texas Wildcatters Association in San Antonio, Texas.  My message was “America Needs America’s Energy:  It is Time We Tell Our Story!”

It is Time to Tell Our Story:  Forty years ago, spring of 2014 will mark the founding of The International Society of The Energy Advocates which was established in Tulsa, Ok.   The Energy Advocates was founded in 1974 by a group of American oil executives in response to the 1973-74 oil embargo.  Today, as then, the organization believes that it is critical for those of us in the energy industry to rise to the challenge and make a difference when it comes to energy issues.

It is Time Tell Our Story:

– According to a recent IEA report, if current trends continue, America could become completely energy self-sufficient by 2030.  Much is to be credited to the shale plays which include the Bakken, the Eagle Ford, and the Marcellus.

– New research and technology has led America to have natural gas reserves of 2,200 trillion cubic feet which could provide 100 years of supply based on current consumption rates.

– Imports of oil are at a twenty year low.  In 2011 the US, after 50 years, became a net exporter of finished petroleum products.

– The oil and gas industry is making a tremendous impact.   Our energy industry for decades has provided energy security, provided jobs, and contributed funds for scholarships, for schools, for hospitals, and many other causes.

– According to an IHS study, the shale play alone has created over 2 million direct and indirect jobs.

– Natural gas is an energy answer that is available today.  We should definitely be putting it use now.  For years I have voiced my belief that natural gas reserves are critical to a strong US economy and is 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.

– Natural gas also holds promise for power generation.  About 22 percent of electric-generating capacity in America is currently natural gas—fired.   According to the EIA, natural gas usage rates for electricity generation grew 38 percent from 2001 to 2010.

– The energy industry has made great strides when it comes to “striving for energy efficiency and environmental preservation.”

The importance of the energy industry can be summed up by a statement by Dr. Irma Russell in the Tulsa Law Review “Without reliable energy, the world economy and world institutions would devolve to chaos”.

It is Time to Tell Our Story:  the American Energy Industry is making an impact in so many ways.  America Needs America’s Energy and America Needs a Strong American Energy Industry!  We, in the energy sector, should take pride in our efforts towards American Energy Independence!

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 8000 supporters plus and growing.  —   America Needs America’s Energy:  Creating Together the People’s Energy Plan!

My first real experience with an earthquake happened during a trip to Japan three years ago.  The magnitude of the earthquake was 6.3.  There had been tremors in central Oklahoma where I now live. So upon my return home from Japan, I decided to acquire earthquake insurance.

A year later, I experienced an earthquake in the US, not in California but in Oklahoma.  The quake was felt throughout a great part of the State.  The magnitude of the quake was 5.6/5.7.

According to the Oklahoma Geological Survey “the number of magnitude 3.0 earthquakes in Oklahoma has risen to an average of 40 per year since 2009, compared to only 3 recorded per year between 1975 and 2008.”

Currently it appears that the research/focus of the cause of the increase in earthquakes is not due to hydraulic fracturing and/or horizontal drilling but instead due to injection wells.

According to USA Today, Art McGarr of the US Geological Survey office has asserted that since an incident outside of Denver in the 1960s, geologists have known that deep injections of wastewater, placed in the ground can trigger earthquakes.

The Oklahoma Geological Survey has outlined a nine point practices checklist regarding injection wells.  Three of the nine points are listed, as an example:

-Fluid injections wells near known faults should be avoided.

-Fluid injection wells should be sited further from faults that are favorably oriented with either the regional or local stress field.

-Injection pressure should be checked as often as practical.  However, at a minimum, regular shut in, pressure fall-off tests should be conducted to measure formation pressure.

There is definitely the need for more information and more research. The oil and gas industry is taking the lead in supporting these research efforts.

Scientists are busy studying the earthquake “swarms” and hopefully, will be able to address the concerns especially about the question of “what can be done?”

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 8000 supporters plus and growing.  —   America Needs America’s Energy:  Creating Together the People’s Energy Plan!

Global energy demand is expected to rise sixty-five percent by 2040 in comparison to 2010.   Therefore, there is expected to be a great demand for electricity and a great demand from the transportation sector.

It is estimated that there will be an additional 2 billion people worldwide by 2040.  With more people there will be the demand for more energy.  Natural gas and electricity are estimated to account for more than 60% of the world’s residential/commercial energy demand by 2040.

So what are some of the countries outside the US region doing when it comes to energy policies and development?

China produces most electricity (in absolute terms) from renewal sources, Iceland gets the largest percentage of its electricity from renewable sources, and the country with the most solar-powered capacity is Germany, according to the Wall Street Journal.

When it comes to global trade, the energy exports and imports have historically been a vital part, in fact for more than a century.  Countries rely on the trade of oil, coal, natural gas, chemicals.

P. R. China is moving ahead of the US as a purchaser of Middle Eastern oil.  At the same time the US is moving ahead to be the largest combined producer of oil and natural gas surpassing Russia.

A part of the world greatly needing economic success is Africa.  In fact, according to Foreign Affairs magazine, “new sources of oil and gas could inject close to $3 trillion into the economies of some of Africa’s poorest and least developed nations”.

It was not too long ago the T. Boone Pickens stated, “we are now spending half a trillion dollars on foreign oil, importing 62 percent of the oil we use, and we haven’t had the leadership in DC to do anything about it.  We’ve got to move to other sources of energy.  But we’ve gotten way behind, and will continue to pay the fiddler.”  Though this statement was addressed to the US citizen, the question about addressing energy policy is at the forefront of every country that is planning for economic growth and security.

India is continuing its frantic quest for energy.  A friendly environment for oil and gas ventures remains when it comes to local exploration.  India is still far behind where it needs to be to achieve energy independence which is the country’s goal.

In 2010 India consumed 3.2 million barrels of oil per day.  The nation’s resource base is substantial, but the country relies on imports for most of its energy use.  The Oil and Gas Journal reports that as of January 20111 India had approximately 5.7 billion barrels of proven oil reserves, the second-largest amount in the Asia-Pacific region after China.

Despite this position, India was the world’s fifth largest net importer of oil in 2010 with more than 2.2 million barrels per day, or about 70 percent of it consumption imported from the Middle East.

There is the world’s quest for energy.  And America needs to Lead:  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 7000 supporters plus and growing.  —   America Needs America’s Energy:  Creating Together the People’s Energy Plan!

Several State energy policy leaders from across the US met in Oklahoma City for the annual State Policy Network’s Energy Summit.

There were four challenges addressed at the summit that are facing the States.  The challenges being fracking, renewable energy mandates, the climate change challenge to States and my assigned subject at the summit to address was “the significance of Federal and State energy policies on private sector decision-making and State economics”.  Among the agenda speakers were Steve Everly, Director of Energy in Depth, Washington, D.C. and John Eick, Legislative Analyst, with the American Legislative Exchange Council, Washington, D.C., and Nick Lori, Economist with the Heritage Foundation, Washington, D.C.

Fracking, (hydraulic fracturing), has been a technology used since the 1940s.  There have been over 1 million wells that have used this technology.

Over the past few years, the combination of horizontal drilling and fracking has been more and more common.  The first horizontal well was drilled in Texas in 1929.

There has been a concern regarding the environment using both technologies together.  Hydraulic fracturing, in particular, is raising concerns for the safety of the environment.

Regulations and ordinances are at the forefront of debate whether it is city or State.   Many have incorporated within their policies energy sustainability plans.

Renewable Energy Mandates are at the forefront of discussion.   Most of the focus has been and will be on solar and wind for the near future.  It is interesting to note that wind power was the biggest source of new generating capacity in the US.  It is also interesting to note that New Jersey is among the top five solar-power capacity States as most of us would probably list States like California and Arizona.

Though “green jobs” has been vocalized as the economic changer, the big story continues to be in the oil and gas energy patch where jobs are in demand.

Climate Change, as the Wall Street Journal reported on October 1, 2013, “between 1998 and 2012 the global economy more than doubled in size—to some $71 trillion in GDP from $30 trillion.  That’s the good news.  Over the same period the world pumped more than 100 billion tons of carbon dioxide into the atmosphere.  That is supposedly the bad news.  Yet global surface temperatures have remained essentially flat.  That’s the mystery:  If emitting CO2 into the atmosphere causes global warming, why hasn’t the globe been warming?”  Bottom-line, the environment is important to each of us and we will all strive for energy efficiency and environmental preservation with sound regulations, ordinances and policies.

There is the tendency to create policies, ordinances and regulations based upon fear rather than on sound research and education.  There definitely needs to be the sound balance of proceeding with energy development and at the same being concerned about implementing proper environmental guidelines.

The public-private partnership is needed.   An energy industry can move in an efficient manner if we have consistent paths to move forward and not be hindered.  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 7000 supporters plus and growing.  —   America Needs America’s Energy:  Creating Together the People’s Energy Plan!

Security in the New Energy Landscape is the title of a recent published study by the Business Executives for National Security Energy Council.  The purpose of the study is to assess the geostrategic impact of the unconventional oil and gas revolution.

Edward Blessing of Blessing Petroleum, Dallas, TX, a good friend of mine, co-chaired the study.

Ed has been a speaker and panelist several times at the International Energy Policy Conference, www.energypolicyconference.com which I have chaired each year since 1992.

Ed and his co-chair, the Honorable Thomas White of DKRW Energy state, “Recent revelations of the scope and accessibility of US oil and gas resources have sent tremors through the world’s energy markets, fundamentally shifting international energy politics.  Markets are realigning as the United States imports less foreign energy every year.  In fact, the United States holds the potential to export energy worldwide.  This new energy reality will ripple across the American public policy spectrum, boosting the economy and strengthening national security.  With the global economy continuing to depend on foreign fuels, the United States will assume a new level of geopolitical importance.  In assuming this status, the United States must reassess certain core tenets of its domestic and foreign policy”.

The study highlights that it is definitely the technology driving the boom along with the shale deposits found throughout the United States.  International shale development will also become a key energy factor.

Key market trends and effects are addressed including global energy demand and the role of US oil and gas, infrastructure shortcomings, and considerations for the export of natural gas and crude oil.  Factors that could negatively impact the energy industry are regulatory and tax policies.

The study states, “the US shale boom is unique, from its origins to its tremendous global implications…the combination of accessible geology, cost-effective technology, and a robust support and investment system fostered a new industry not replicable anywhere else in the world…New jobs are invigorating the America economy and the US might even maintain being an exporter for the first time in decades.”

I believe the most important statement to take from this study is “the world now treats the US as an energy producer, assigning it even greater geopolitical significance.  Yes, America Needs America’s Energy now more than ever!

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 7000 supporters plus and growing.  —   America Needs America’s Energy:  Creating Together the People’s Energy Plan!