Illinois is one step closer to  hydraulic fracturing after bipartisan legislation regulating the process was signed into law by Gov. Pat Quinn. Lawmakers say they hope the new regulations will encourage the oil and natural gas industry to invest in Illinois, helping to create jobs.

Fuel Fix Blog – Colleges Plan Training for Gas Drilling Jobs

Two colleges in southern Illinois are getting a jumpstart on possible oil and natural gas development in the state. Southeastern Illinois College and Rend Lake College are planning to provide training programs focused on safety and other areas related to  energy development.

ExxonMobil Perspectives – A Funny Idea of What “Back In Business” Means

Ken P. Cohen writes that oil and natural gas production from federal lands, including coastal waters, is at its lowest point in 10 years. Citing U.S. Energy Information Administration data, Cohen notes that more than 85 percent of offshore areas remain off limits to oil and natural gas development – a missed opportunity for production, creating jobs, and generating revenue.

Boston Herald – End 1970s Ban On Energy Exports as Technology Opens Up Vast Supply

Thanks to such technological innovations as hydraulic fracturing, the U.S. has begun to tap  vast domestic oil reserves, writes Naval War College Professor Mackubin Owens. “Over the next few years, the United States has the potential to increase domestic oil production by hundreds of billions of additional barrels” – with policies that encourage oil and natural gas development.

Forbes – The Real Keystone Atrocity: Environmental Hyperbole

Contributor Loren Steffy writes that “contrary to the opposition’s argument, killing Keystone won’t slow the consumption of fossil fuels. Canada will simply find a new export partner, most likely China, which is likely to use the oil with far less environmental oversight than the U.S.”

Platts – Bakken Gas Pipeline Would Fuel Manufacturing Growth in Eastern N.D.

A proposed pipeline project that would carry natural gas from the Bakken Shale play in Western North Dakota to the eastern part of the state, Minnesota and Wisconsin would boost manufacturing activity, according to a recent report.

“Every time I look at world oil or gas resources, I start adding things up, and I end up with enormous numbers. It just seems like an unavoidable fact, and the issue is about human activities and the contraptions they’re using for getting this out. There is certainly no shortage of molecules out there.”

In other words, oil and natural gas potential will be defined by us – through energy leadership, vision and policy. It will be about the willingness of policymakers in this country to fully embrace the present and future promise of oil and natural gas riches reflected in a number of analyses, including BP’s Statistical Review released last week:

• 8.9 million barrels of oil produced in 2012, the United States’ highest output since 1991. With the U.S. revolution in unconventional reserves, estimates of our oil potential continue to grow.
• The U.S. was the world’s largest producer of natural gas last year, 681 billion cubic meters or 65.89 billion cubic feet per day, accounting for 20 percent of global output. The 4.7 percent rise in U.S. production over 2011 led the world.

Southwestern Energy Company’s Jim Tramuto:

“Whatever you’re reading, whoever you’re listening to, the numbers just continue to grow … because we continue to get smarter at what we do, we continue to become more efficient. … We have abundant supply here, right below our feet.”

So, what will America do? EIA’s conference is one big clearinghouse for energy stats, tables and big-screen presentations – and the people who feast on them. As Tramuto says, data points to the reality of oil and natural gas abundance but we have to choose policies that can turn potential into reality: greater access to reserves, common-sense regulation, leasing and permitting policies that foster investment and development instead of impeding it. U.S. Sen. Lisa Murkowski of Alaska touched on the challenge of meshing energy wealth and pro-development policies:

“We now have the technology to access resources we simply couldn’t get to before. The domestic challenge for us is that we face this accompanying shift above ground, but it’s not necessarily keeping pace with what is happening (below ground). You’ve got above ground, below ground, it’s just not lining up here.”

Part of it is escaping a past narrative of limited U.S. energy resources. Southern Company President and CEO Thomas Fanning:

We need to “find a way, to play offense in what otherwise is considered to be broadly a challenged (economic) environment. I’m happy to say that I think the energy complex broadly – oil, natural gas, coal, electricity, we can.  I think it’s exciting – something you haven’t seen in your lifetime. … Energy policy today is based on scarcity. … I believe we could be a net energy exporter by 2020.”

Murkowski:

“I think part of the problem we’re dealing with is almost psychological. So many of us grew up in an era where energy was viewed as scarce, so we’re looking at the energy world from a position of scarcity but with the developments, the alternatives we see, as we see these changes, we need to now reckon with the fact that we are dealing from a position of abundance.”

This abundance should be embraced. We’re seeing a revolution in U.S. oil and natural gas production – levels not seen in decades. Technology and innovation are making it possible. It can be sustained and increased if policymakers recognize the generational opportunity at hand to secure our energy future, create jobs and grow our economy. Murkowski:

“The list of economic benefits to our nation is endless. I think it is only just beginning.”

In an op-ed for the Post, U.S. Sen. John Barrasso of Wyoming writes that the United States has a rare opportunity through natural gas exports to simultaneously create jobs, strengthen our foreign policy hand and help allies abroad. “Make no mistake: Our allies need energy to grow,” he writes. “If the United States does not supply that energy, someone else will.”

The Telegraph – U.S. Having Real Energy Revolution with Oil Surge

“Despite disruptions to oil supply in Africa and parts of the Middle East, rising US output ensured that global oil production continued to grow,” writes Garry White.

Houston Chronicle – FracFocus Becomes More User-Friendly

The hydraulic fracturing chemical registry has been updated to allow users to search by date ranges, chemical names or chemical abstract numbers – the unique numerical identifier for a chemical. The registry's focus remains on individual landowners and/or concerned residents who want to know the composition of fracking fluids used on their property or near their communities.

Forbes – Sparring Continues over LNG Exports

“I think it’s a false choice to say we either use the gas here or we export it. I think we can do both.” – Marianne Kah, chief economist for ConocoPhillips, speaking at an energy forum in Chicago last week.

Obviously, both findings complicate RFA’s mission to increase ethanol use – which explains RFA’s cavalier dismissal of sound research and sound science, as well as its disingenuous defense of mandates in the Renewable Fuel Standard (RFS), which is forcing more ethanol on the public than is safe.

Moore’s post, “A Picture is Worth a Thousand Words: CRC’s Engine Durability Highlights Failures on All Fuel Tested,” lobbed claims against CRC’s engine study, a number of which we’ve rebutted before. But Moore is right on one point: A picture is worth a thousand words. Here’s one (left):

It’s a photo of an impeller from one of the fuel pumps CRC tested on gasoline with higher levels of ethanol than the current standard grade that contains 10 percent (E10). A number of the impeller’s vanes have broken off – the result of jamming into the fuel pump’s housing, after the higher ethanol-blend fuel caused it to swell and expand. Such damage would cause the fuel pump to stop functioning, as well as the engine, and you know the rest – motorists on the side of the road. Meanwhile, CRC’s engine study found that fuel containing higher levels of ethanol could cause uneven wear and pitting of intake valve seats as well as widened exhaust valve seats and other problems. You know the rest – a date with the mechanic and potentially some big bills.

RFA doesn’t like this message, so it attacks the messenger. It doesn’t like the fact that CRC, which has been the gold standard in terms of vehicle testing for the better part of a century, determined that fuel containing higher levels of ethanol could damage millions of engines that weren’t designed to run on those fuels – the reason automakers, consumer safety groups like AAA, grocery manufacturers, environmental non-profits, think tanks, anti-hunger groups, the California Air Resources Board and lawmakers have expressed concerns.

Thus, Moore’s post. Let’s take a look at some of the questions she raised, with help from Coleman Jones of General Motors and Mike Leister of Marathon Petroleum, members of the CRC engine test project’s supervisory panel. For reference, below is the CRC engine test results table, which Moore highlighted in her post.

The table shows that eight different vehicles were tested – first on E20 fuel, then on E15 if they failed on E20, then on E0 if they failed on E15. Read CRC’s report for a thorough explanation of the testing methodology. Key questions raised or suggested by RFA:

Why were only three vehicles tested on E0?

Jones: We tested on E20 first, if the vehicle passed we were confident that it would pass at all ethanol levels below E20, so no further testing was needed. This was an efficient and technically sound way to conduct this type of testing.

Why weren’t all the vehicles tested on E15?

Jones: For the same reason they weren’t all tested on E0 (see above).

Why wasn’t E10 used as a control test?

Leister: Because in their own testing, neither the Energy Department nor the Environmental Protection Agency used E10 as a control test.

Why were waivers granted in four instances in the E20 testing?

Jones: Final determination of pass/fail was done after the engine was disassembled and studied by the company’s experts who designed and built the engine, called the Original Equipment Manufacturer or OEM in the CRC report. We set very tight limits on the test results so that engines would go to the OEM for analysis if there was anything that was in any way suspicious. The term “waived” simply means that the engine was deemed a pass on E20 by the OEM. Waivers were granted by the OEM in cases where a vehicle triggered an inspection by the OEM, but it was determined during teardown by the OEM that there was nothing wrong with the engine. For final reporting purposes those vehicles were listed as passing on E20 and so weren’t tested further on E15 or E0.

(Above, an engine setup for CRC testing)

What happened with Vehicle 8?

Jones: Vehicle 8 engines failed tests at E20, E15 and E0. Specifically, all failed the test’s leakage criterion. The test was run at an engine speed that later was determined to have been inappropriate for that engine’s design and which kept the engine’s valves from rotating normally. Accordingly, the overview results for Vehicle 8 were separated from the others. Even so, the teardown analysis conducted by the OEM revealed that the engines run on E20 and E15 showed higher wear and heavier pitting of the exhaust valves compared to the engine run on E0. This is all clearly explained in the CRC test report, which Moore failed to mention in her post.

Were a number of the vehicles used in the test under recall for relevant issues at the time of testing?

Leister: None were under recall for engine-related issues. Indeed, a lower proportion of the vehicles tested by CRC were under recall (for non-related issues) than the vehicles the Energy Department used in its catalytic converter emissions testing program.

Was the Energy Department critical of CRC’s test protocol and if so, why?

Leister: DOE stated that CRC should have used E10 as a reference fuel, yet the department didn’t use E10 in its catalytic converter emissions testing program or in its evaporative emissions evaluation. Further, DOE didn't use E10 as a reference in its evaluation of marine engines. Meanwhile, EPA made it clear in their separate testing of ethanol’s effects on emissions control equipment that the reference fuel was E0. Bottom line: DOE didn’t like CRC’s results.

Was there anything unusual about the protocols for CRC’s engine test program?

Jones: Other than the fact the vehicles were run on fuels for which they weren’t designed or warranted, no.

What about the RFA claim that in CRC’s test the “vehicles were geared to provoke engine failure”?

Jones: We ran a test cycle to look for the effects of ethanol on engines. These effects are known from the development of E85 vehicles. In CRC’s engine test two of eight vehicle types, both of which were included in EPA’s 2010 and 2011 waivers, had issues on E20 and E15 and not on E0. Basically, EPA’s testing is irrelevant to a discussion of engine wear from elevated ethanol levels, because it was focused on emissions control equipment, not engines. Instead of attacking CRC’s testing, RFA should be applauding because CRC has identified problem areas for future research and development for use of higher levels of ethanol.

The current public discussion of the ethanol mandates in the RFS -- and the potential harm that could come to vehicle engines that weren’t designed to run on fuels containing higher levels of ethanol -- is important and should be fact-based. These points are salient:

• RFS ethanol mandates are bringing the U.S. closer to a “blend wall” when more ethanol is required to be blended into the fuel supply than is safe for vehicles.
• As a result of the mandate, the cost of diesel could be driven up by 300 percent and the cost of gasoline by 30 percent by 2015, according to a report by NERA.
• Rising costs of gasoline and diesel could, in turn, cause a $770 billion decrease in U.S. GDP and reduce take-home pay for American workers by $580 billion, NERA said.

The problems are real and won’t be solved if ethanol backers refuse to acknowledge them. API Downstream Group Director Bob Greco:

“The ever increasing ethanol mandate has become unsustainable, causing a looming crisis for gasoline consumers. We’re at the point where refiners are being pressured to put unsafe levels of ethanol in gasoline, which could damage vehicles, harm consumers, and wreak havoc on our economy. Congress must repeal the mandate. But there isn’t much time to get this done.  To protect consumers in the near term, EPA has the authority to reduce the mandate now.  This would immediately lessen the blend wall problem until Congress can act.”

• $202.4 million collected in state impact fees from energy producers.
• $731 million in rents and royalties paid to land and mineral rights owners.

That’s nearly $1 billion from the oil and natural gas industry in terms of tax revenues for government to allocate (more below) and payments to individuals.

Pennsylvania officials announced this week $202,472,000 was collected in producer-paid impact fees in 2012. About $204 million was collected for 2011, bringing the two-year total to more than $406.6 million, state officials said. Public Utility Commission Chairman Robert F. Powelson:

“The PUC is entrusted by the Governor and the legislature with the collection and distribution of the Impact Fee monies. Again, we have met all of the deadlines in the legislation, which contains a complex and specific formula for getting this money into the hands of local communities.”

Of the 2012 total, $102.6 million will be distributed to county and municipal governments whose jurisdictions are directly affected by drilling. Another $28 million will be distributed to state agencies impacted by drilling. The remaining $71.7 million will be placed in the state’s Marcellus Legacy Fund, which was set up to pay for environmental, highway, water and sewer projects, rehabilitation of greenways and other projects across the state. Stephanie Catarino Wissman, executive director of the Associated Petroleum Industries of Pennsylvania:

“Shale energy production has been generating huge revenues for Pennsylvania – in addition to driving double-digit job growth. This year alone Pennsylvania has collected more than $200 million in impact fees related to shale development. This is benefiting families and communities across the state. Shale energy development, made possible by hydraulic fracturing, has been a game-changing opportunity for Pennsylvanians, and it’s going to be good news for our economy for many years to come.”

Shale development also is good for the state’s land and mineral rights owners. A recent study by the Allegheny Institute for Public Policy estimates that such payments have grown from $10.9 million in 2008 to the $731 million in 2013. That’s a growth rate of more than 6,600 percent – all thanks to shale development in the Marcellus play. That’s money individuals can use to secure family farms, start or strengthen family businesses, pay for their children’s education and more. In short, energy development is enabling broad opportunity and choices for a lot of people who previously might not have had either.

Meanwhile, in neighboring New York state …

According to a new report by the Texas Clean Energy Coalition, natural gas and renewables “have a strong complimentary relationship” that is beneficial for providing the energy Americans need every day.

Today in Energy – U.S. Crude Oil Production Could Reach 10M Barrels Per Day By 2040

EIA projects that thanks in large part to increased tight oil production – shale development – domestic production could continue to expand to 10 million barrels per day or higher by 2040.

Savannah Morning News – Let’s Admit the Ethanol Mistake

In a guest post, J. Winston Porter writes that “the ethanol in our gasoline increases the cost to fill our cars, is heavily subsidized by taxpayers and has considerable environmental drawbacks.” He also notes that higher concentrations of ethanol in fuel, such as E15, can cause engine failure, accelerated engine wear and fuel-system damage.

Bloomberg – Shale Drillers Squeeze Costs as Attention Turns to Production

Oil and natural gas companies have embraced technology and innovation to find vast energy deposits in  shale. Now focus is turning to production of those resources with companies again relying on technology to make development more efficient and effective.

Reuters – ExxonMobil’s TillersonSays Delay in Natural Gas Export Permits Hurts U.S.

With Energy Secretary Ernest Moniz testifying on the Hill this week that  the review of U.S. LNG export permits should wrap up soon, ExxonMobil CEO Rex Tillerson says “delays in approval of more natural gas export projects are costing U.S. companies millions of dollars a day and giving a leg up to rival countries also looking to boost exports.”

In the latest sign that  the shale revolution is remaking world energy markets,  the WSJ cites BP’s 2012 Statistical Review showing crude production in the U.S. jumped 14 percent last year to 8.9 million barrels a day. (subscription publication).

Pittsburgh Post-Gazette – Pennsylvania to See $202.47 Million in Per-Well Fracking Impact Fees

A new Pennsylvania Public Utility Commission report notes that more than $200 million from hydraulic fracturing impact fees will be distributed to local governments across the state. Bradford County in the state's northeast will collect the most at $7.3 million while Washington is second at $4.7 million. Lycoming and Tioga counties follow with $4.4 million each.

The Hill – GOP Warns of $1 Trillion EPA Regulations

Congressional Republicans say EPA’s proposed new standards for smog emissions will impose costs on businesses and could disproportionately affect western states.  “Even the EPA's conservative cost estimate of $90 billion a year make this proposed rule the most expensive regulation ever considered,” said Rep. Chris Stewart of Utah..

Bangor Daily News – Maine Paper Mill Embraces Natural Gas to Increase Competitiveness

The UPM Madison mill   is  switching to natural gas to power its operations this fall. “It makes us much more competitive on an international basis by lowering our costs, and that helps provide long-term viability for the facility,” said the mill’s  manager.

Fuel Fix Blog – Norway Gives 29 Companies Arctic Oil, Natural Gas Licenses

As the United States continues to debate its own stake in the Arctic, countries like Norway are moving forward with exploration and possibly development.

• 8.9 million barrels of oil per day (Mb/d) – U.S. production in 2012, the highest level since 1991.
• 1 Mb/d – U.S. oil output growth last year over 2011, the largest increase in the world (14 percent) and the largest in U.S. history.
• 84 percent – U.S. energy demand supplied by domestic sources, up from an all-time low of 69 percent just eight years ago.

BP’s chart on U.S. oil production, spanning the past quarter century:

And another by AEI’s Mark J. Perry, providing historical perspective on changes in U.S. output:

BP Group Chief Executive Bob Dudley:

“On the supply side, the big phenomenon remains the American shale revolution – which led to another record-breaking year. U.S. oil and gas production grew faster than that of any other country – and for oil, the U.S. saw the largest increase ever.”

BP Executive Vice President David Nagel:

“The stats review also shows how outcomes often defy expectations when markets operate naturally. If you go back 10 years, you’ll find people worrying about the U.S. being addicted to energy imports, and today we’re headed toward energy self-sufficiency.”

Beyond an amazing change in the U.S. energy narrative, there’s global impact. U.S. oil production is affecting world crude oil markets. Shorter: Supply matters. More from Dudley:

“The growth in U.S. output was a major factor in keeping oil prices from rising sharply despite a second consecutive year of large oil supply disruptions.”

And the Wall Street Journal reports (subscription publication):

U.S. crude-oil production has raced ahead of new pipeline infrastructure to move it from oil fields to refineries. This has created regional gluts, such as in a major trading hub in Oklahoma, and driven down prices there. But it hasn't spilled over to depress global prices or deliver substantial amounts of cheap oil and fuel to consumers. The average crude price at a major benchmark hub in Europe last year was $111.67 a barrel, compared with $94.13 in Oklahoma. This could change as production rises and more pipelines are built—and as railroads move more crude around the country. "Growth in U.S. shale-oil production could have the most significant long-term impact on oil prices of any supply event in recent decades," noted a report from Pacific Investment Management Co., which runs one of the world's largest commodity funds.

Again, thanks to shale, thanks to fracking and horizontal drilling and thanks to an oil and natural gas industry that has made the investments to turn our shale potential into real energy, real jobs. This production growth is strengthening America’s energy and national security – and standing in the world. Ambassador Carlos Pascual, the State Department’s special envoy and coordinator for International Energy Affairs, speaking at this week’s Bipartisan Policy Center event on the impacts of U.S. tight oil:

“Oil and increasingly gas is a global commodity. Whatever happens in disruption of those supplies in those markets anywhere around the world is going to have an impact on global prices and it’s going to affect prices we pay in the United States, what you pay at the pump and the productivity of the American economy. It is fundamental to our economic interests and concerns. … We have the potential in North America to be a foundation for both oil and gas energy security for the entire world. … Because of this resource boom we have greater supplies for our own energy security, we can avoid disruption of supplies in the access that we have locally …”

The next chapter in this great-news story? Energy policies that sustain and build on the momentum reflected in BP’s review. These include increased access to U.S. reserves, offshore and onshore. It means common-sense regulatory policies and procedures for leasing and permitting that reward energy risk-taking and investment with stability and predictability. It means fair tax policies that foster investment. Combined, these will allow America’s oil and natural gas wealth to help grow our economy, create jobs and provide more revenue to governments.

According to a new BP report, U.S. oil production growth,  the largest in the country’s history, helped keep global crude prices from rising sharply. Shale development had the biggest impact on this increase in oil production.

Washington Times – U.S. Gains Global Competition as Shale Revolution Heats Up

While the U.S.  has been “the dominant player in the shale revolution until now,” the newspaper cites new estimates showing that Russia and China have potential to rise in the global market by exploiting their own shale resources.

Forbes – International Investment Could Be Coming to Oil and Natural Gas Midstream Sector

Thanks to the surge in U.S. shale production, investments from international companies could be making its way to American industries, writes Mark Druskoff – a “win-win for everyone.”

Bloomberg – Natural Gas Production to Increase in 2013

U.S. natural gas production will top 70 billion cubic feet (bcf) per day, according to an EIA report. Production in the lower 48 states will average 64.96 bcf  a day, up from last month’s estimate of 64.77 bcf/day.

Exxon Mobil Perspectives – Investing in the American Workforce of the Future

Ken P. Cohen highlights a grant from the company for a technology job-training program in Houston. The program will help train workers for the rapidly expanding petrochemical industry, which has gotten a boost from increased natural gas development.

… let's look at oil and gas mining. The industry really employs very few people. Less than 200K people are in the oil and gas extraction business. … And on a month over month basis, just 500 or so new jobs were created in May. … So while oil and gas is a big exciting story, it’s not directly a big source of new jobs.

Both points would be news to the more than 6,000 people now working in direct industry jobs that were added from April to May of this year, according to the Bureau of Labor Statistics (BLS).

BusinessInsider.com’s piece is fairly shortsighted, failing to acknowledge what nearly every economist acknowledges – that a business sector’s real employment measure includes direct jobs but also supporting and associated jobs. And even on direct jobs they fall down, counting simply the people doing actual drilling as representing the “industry” would be like basing employment in the airline industry on just the number of pilots.  For example, bringing in just one other employment category, “support activities for oil and gas operations,” which includes exploration (except geophysical surveying and mapping); excavating slush pits and cellars, well surveying; running, cutting, and pulling casings, tubes, and rods; cementing wells, shooting wells; perforating well casings; acidizing and chemically treating wells; and cleaning out, bailing, and swabbing wells shows an additional 292,100 people employed by the industry in April, according to BLS.  We have heard the non-jobs story before, and the facts are that the industry supports 9.2 million Americans, all of them real people drawing real paychecks – paychecks that might not exist without underlying oil and natural gas activity.

For example, it’s generally accepted that natural gas development in Pennsylvania has rekindled manufacturing in Ohio as the makers of steel pipe, equipment and other materials respond to the supply and service needs of natural gas producers in the Marcellus Shale. Likewise, hotel, restaurant and other service jobs have skyrocketed in places where oil and natural gas activity is ongoing. That’s a big reason the unemployment rate in North Dakota, where the Bakken Shale is producing record amounts of oil, is 3.3 percent.

The oil and natural gas industry is a growing, exciting place to be. Business Insider.com’s own chart depicts a sharp increase in just one area of direct industry employment, and that’s good news. Developing more of our own energy here at home could make things even more exciting. Wood Mackenzie’s analysis says that with the right policies our industry could create 1 million new jobs by 2018 and 1.4 million by 2030, while generating an additional $800 billion in cumulative revenue for government by 2030. That’s a news story no one should overlook, or try and diminish.

Watson’s article takes aim at myths, misinformation and untruths that are being used to prolong New York’s fracking moratorium – keeping jobs, economic growth and renewed hope at arm’s length from state residents:

Being a farmer myself, I want to be clear: There is nothing in natural gas production that conflicts with the work we do. In fact, I am hard-pressed to see how utilizing the fertility of the space beneath our fields conflicts with being good stewards of the land above. I like to be consistent and rational, and no matter which way I look at this, it remains a win-win. Cleaner energy from below, crops from above.

Watson and her husband grow organic hay, small grains, corn, soybeans and sunflowers on their 200 acres in Schoharie County. Her farm also buys 2,000 tons of organic grain a year that is milled into mixes for use by organic farms that produce milk, eggs and meat. The Watsons love their land but also would welcome natural gas drilling. Watson:

This is why I find it so irritating when others invoke our struggles as farmers to advance their own causes. I know some are just well-intentioned environmental advocates. But to insist with a straight face and loud voice that fracking is genuinely destructive to the land and food supply here in New York speaks of either ignorance or intellectual dishonesty.

Her frustration certainly reflects the feeling among so many New Yorkers – denied the benefits of hydraulic fracturing to develop natural gas and oil that are being seen in other states.

Like Pennsylvania …

A study by the Allegheny Institute for Public Policy finds that royalties paid to land and mineral rights owners in the Marcellus Shale play (which also runs under New York’s Southern Tier) climbed from an estimated $10.9 million in 2008 to an estimated $731 million in 2012. The study:

While the exact overall impact may be up for debate, what is not debatable is the benefit for owners of the land and/or mineral rights where wells are located. … The estimated gas revenues for 2012 are in excess of $5.85 billion. Again using 12.5 percent as the royalty percentage gives an estimated $731 million in royalties for 2012. Thus royalty income paid to owners of land/mineral rights in Pennsylvania skyrocketed by more than 6,600 percent thanks to Marcellus Shale.

The study points out that a Bureau of Economic Analysis estimate of personal income for 2012 was just above $556.7 billion, meaning royalty payments from the Marcellus Shale accounted for about 0.13 percent of that income -- compared to 0.002 percent in 2008.

And West Virginia …

API senior economic advisor Rayola Dougher sat down with The State Journal newspaper in Charleston to talk about the economic dynamics of natural gas development, which is ramping up in the state:

"It really impacts any area that's having this development in terms of employment impact directly as well as indirectly because there's such a long supply chain. It's not just oil and gas drillers – it would be construction jobs, professional jobs, the service industry, even food services, administrative, truck transportation, real estate, so the list goes on and on – as it reverberates throughout the community, this new creation and these new jobs."

And North Dakota …

Bruce Gjovig, founder of the Center for Innovation at the University of North Dakota, has been saying since last fall that the state’s oil boom – thanks to fracking in the Bakken shale – is creating up to 2,000 millionaires a year, much of it from royalties.

Bottom line: Natural gas and oil development produces the energy that makes our lives modern and comfortable, while creating jobs, boosting economies and generating additional revenue for governments. There is great promise for our country as a whole and individual Americans, like Kate Watson, in producing more of our energy here at home. Shale energy, developed with hydraulic fracturing, is a big part of this good-news story – provided we choose policies that will foster more safe and responsible production.

The newspaper reports on a study by the Allegheny Institute for Public Policy showing that royalty income paid to land and mineral rights owners in Marcellus Shale play has skyrocketed in recent years, from an estimated $10.9 million in 2008 to  an estimated $731 million last year.

MSN Money – Meet the State with America’s Strongest Economy

Thanks to the surge in hydraulic fracturing and shale development in North Dakota, the state’s GDP rose 13.4 percent in 2012 over 2011 to lead the U.S.  Per capita personal income also has soared, doubling since 2000.

Wall Street Journal Live – Interview: Chevron’s John Watson

Chevron’s CEO sat down with WSJ to discuss the evolving global shale market and the impacts of U.S. shale reserves. He also discusses how energy companies are becoming safer and more productive.

Trib LIVE – McKees Rocks Industrial Enterprises Repositions Itself to Serve Shale Drillers

Investing in communities: Thanks to the surge in Marcellus Shale development in Pennsylvania, local businesses like McKees Rocks are getting a much-needed boost.

CNBC – World’s Shale Oil Reserve Equal to 10+ Years of Total Consumption

According to a new EIA report, global shale resources are vast enough to cover more than a decade of oil consumption. The report said natural gas from shale formations increased world natural gas resources by 47 percent to 22,882 trillion cubic feet.

In an editorial, WSJ comments on a bipartisan vote in the state assembly to defeat a ban on hydraulic fracturing: "...about one-third of the active wells now use this innovative drilling process... A moratorium would throw thousands of Californians out of work."  

EIA Today in Energy – Shale Oil and Natural Gas Resources Are Globally Abundant

A new EIA report shows that shale resources in the United States and worldwide represent 10 percent of the world's crude oil and 32 percent of the world's technically recoverable natural gas resources.

Pittsburgh Post-Gazette – The Way Forward on Shale

Carnegie Mellon University President Jared Cohon writes on the economic gains for Western Pennsylvania from the development of shale. “Banning fracking would impose on Western Pennsylvania, and the country, an unacceptably high environmental burden.” 

NY Daily News – Please, Frack Beneath My Farm

In a guest post, an organic farmer from New York argues the benefits of leasing her land for natural gas development. She notes that natural gas extraction and agriculture are compatible. “My husband and I love our land as only farmers can. We also have a gas lease — and would welcome a natural gas well on our farm if New York State would only permit it.”

ExxonMobil Perspectives – Stop the Presses! Big Oil Pays the Biggest Taxes

Ken P. Cohen notes a New York Times study on tax rates across industries: The big energy firms paid the most taxes in absolute terms: Exxon $146 billion; Chevron $85 billion; and ConocoPhillips $58 billion. Oil and natural gas companies also paid among the highest effective tax rates.

Creating access to areas that currently are off-limits is critical to U. S. energy security, job creation and economic growth. Access leads to exploration, which results in the oil and natural gas development that’s vital to President Obama’s pledge to increase domestic production under his all-of-the-above energy strategy. API Chief Economist John Felmy, in testimony before a House subcommittee last week:

“Offshore oil and natural gas production is a long-term effort that requires long-term planning. Before the first well can be drilled and any of these benefits realized, the federal government must schedule lease sales and permit modern seismic surveys, which are essential for locating undersea energy resources.”

The proposed legislation is needed to change the offshore status quo that has about 87 percent of federal offshore acreage closed to oil and natural gas development:

This status quo is held in place by the federal government’s five-year leasing plan that excludes the areas in red from lease sales at least through 2017. Felmy said the government estimates that 88.6 billion barrels of oil and 398.4 trillion cubic feet of natural gas have yet to be discovered on the outer continental shelf:

“While these estimates are large, they are also incredibly out-of-date because a large share of the estimates are based on seismic surveys that were conducted 30 years ago. Today, seismic surveys using modern technology produce sub-surface images which are much clearer than those from decades ago and allow for a better understanding of the potential resources available. … It is only through exploratory drilling that we can find potential domestic resources, but the use of seismic surveys is critical for determining the best prospects for drilling. Seismic surveys have been used safely for decades – with little impact on marine life – to assess the location and size of potential oil and natural gas deposits, which often lay several miles beneath the ocean floor."

Without access, there’ll be no lease sales. Without the possibility of a lease, research that leads to development will be stunted if not blocked altogether. And so it is for the vast majority of the acreage off our coasts. Felmy:

“No other developed nation in the world keeps so much of its offshore energy resources out of reach. … Under current administration policy, collecting much needed seismic data in the Atlantic OCS may not happen. Why? Because without a lease sale scheduled in the Atlantic for the foreseeable future, there is very little prospect for the companies that collect these data to sell it. It is important to send positive signals on leasing in order to spur companies to invest in collecting new data, so that they can be assured that there will be a market for these data. Moving forward with leasing in the Atlantic as proposed in this legislation would be a step in the right direction.”

The wrong direction is maintaining a status quo that has seen a downward trend in production from federal areas, reflected in data on the sales of oil and natural gas on federal lands reported last week by the U.S. Energy Information Administration:

• Offshore and onshore sales down 5 percent in fiscal year 2012 from FY 2011 – 596 million barrels (mb) in 2012 compared to 629 mb in 2011. That includes an 8 percent decrease in offshore volumes (from 516 mb in 2011 to 474 mb in 2012).
• A 12.2 percent decrease in all federal production since FY 2003 – again, led by an 18.1 percent decline offshore (579 mb  in 2003 to 474 mb in 2012).

EIA’s table:

Certainly, new Interior Secretary Sally Jewell offered encouragement last week, noting that when a new federal lease plan is developed in 2017 there will be opportunity for exploration and production. Better would be a plan that opens new access and gets us on the road to actual production quicker.

With sensible regulation and policies that allow for more leasing, timely permitting and increased drilling, we can produce more of our oil and natural gas here at home – creating jobs, growing our economy and strengthening our national security.

Propelled by a massive energy surge,  North Dakota’s economy grew  13.4 percent  in 2012, according to Bureau of Economic Analysis figures – nearly three times as fast as Texas, the No. 2 state. The oil and natural gas industry is a big economic driver, as well as manufacturing industries.

National Review Online – No More Energy Protectionism

In a guest post, the Heritage Foundation’s Nicolas Loris writes that, “In a free economy, goods and services go to their highest valued use. Natural gas is no different, and it should be treated the same as any other good the U.S. trades around the world.”

Radio Free Europe – An Interview with Daniel Yergin

The IHS CERA chairman  notes that the U.S. oil surge has created more energy options and has strengthened U.S. energy security. Yergin says shale natural gas has gone from 2 percent of U.S. supply a decade ago to 40 percent today – thanks to increased hydraulic fracturing.

Vancouver Sun – Harper Pushing Made-In-Canada Pipeline as Obama Mulls Keystone XL

While the Obama administration continues to delay a decision on the Keystone XL pipeline, Canadian Prime Minister Stephen Harper looks for other ways to move the country’s oil sands – including a pipeline that would take crude from Alberta to the country’s eastern provinces.

Fuel Fix Blog – Weighing the Prospects of LNG Exports

Fuel Fix has a commentary article highlighting the global impacts of U.S. natural gas exports, as well as the economic benefits for America. “Economic growth is positively correlated with LNG export growth,” writes Matt Smith, “while job growth should be significant due to increased demand for materials and equipment.”

The Union – Sensible Regulation the Way to Go with Fracking

Contributor Thomas Elias writes of California oil production that “oil wells and healthy people have coexisted for almost a century in places like Los Angeles and Beverly Hills. Why not also in the Coast Range and the Central Valley?”

• $6.7 billion in taxable sales and purchases for 2012’s fourth quarter, up 9.7 percent over the fourth quarter of 2011.
• $25.291 billion for all of 2012, a 28.7 percent increase over 2011.

Playing a big role is energy – oil and natural gas production thanks to the Bakken shale, hydraulic fracturing and state policies that embrace development. Oil extraction was one of the leading growth sectors in 2012, increasing by 43.6 percent. That was second only to construction (52.2 percent), whose growth no doubt was linked to demand stemming from Bakken energy development. Fong:

"On the heels of a strong run up to 2012, we had anticipated that the economy would keep growing throughout the year. During 2012, we continued to see statewide growth in all industry sectors. … This will likely become our new normal.”

Wow! Think about it: Sustainable statewide growth in all industry sectors as the “new normal.” Fong told the Jamestown Sun that North Dakotans’ confidence in the state economy is reflected in retail sector growth, up from $5.4 billion to $6.3 billion:

“It’s the sector of the economy where people are going down and making expenditures. When people feel good about where they’re at and their financial position, they will feel more comfortable with making those expenditures.”

The root of this consumer confidence is that North Dakotans are working – lots of them, judging by the state's nationwide-low 3.3 percent unemployment rate. Many folks are holding well-paying jobs in the oil and natural gas industry, or in areas supported by our industry. They have dependable income, freeing them to make purchases that generate the tax revenues that have Mr. Fong smiling. You would be smiling as well if you led the country in state GDP growth last year (13.4 percent) as North Dakota did, according to the U.S. Bureau of Economic Analysis. Again, the energy stimulus at work: oil and natural gas investments and development sparking economic benefits beyond the sector's primary scope. 

Now, back to New York and California. Both also are energy-rich states. Both have vast shale deposits that could be developed with hydraulic fracturing. California Gov. Jerry Brown has said the state should look at fracking, and we agree. The state’s Monterey Shale play could hold 15 billion barrels of oil. But opponents are pushing for a hydraulic fracturing moratorium … which leads us to New York, where a moratorium in place since 2010 is keeping the benefits of the Marcellus play out of reach. Meanwhile, the state is running commercials trying to attract business investment.

Both states should look to North Dakota, where energy potential is being turned into reality – with jobs, economic growth, consumer confidence and tax revenues for state government.

The surge in U.S. shale development through hydraulic fracturing and horizontal drilling in North Dakota, Oklahoma and Texas has boosted domestic oil production – 7.3 million barrels a day  last week alone – to the highest level since 1986, according to the U.S. Energy Information Administration.

Fuel Fix Blog – Feds Give More Time To Study Proposed Drilling Rule

Last month API asked for an additional 90 days to study  BLM’s proposed rule governing hydraulic fracturing. Today, Interior Secretary Sally Jewell said that she would allow an additional 60 days for stakeholders to review the proposed regulations.

The Daily Beast – U.S. Closing Trade Deficit With Better Oil numbers

The Daily Beast takes a look at how the surge in U.S. oil and natural gas production is aiding America’s trade deficit. If this trend continues, notes the web site, “American businesses and consumers will be spending $20 billion less on imported oil in 2013 than they did in 2012 … leaving them with more cash to spend on domestically produced energy, or on other goods and services.”

Energy Trends Insider – Why the Timing is Ripe for Ethanol Policy Reform

In a guest post, Geoffrey Styles notes the link between the Renewable Fuel Standard, ethanol and global food prices. Styles has an interview with a researcher who suggests the RFS’ ethanol mandates should be rolled back because of ethanol’s impact on the global food situation. 

The Express Star – New Research Suggests Fracking Not Significant Cause of Earthquakes

A study by United Kingdom researchers echoed recent American reports that hydraulic fracturing is not a significant source of tremors felt on the surface. The scientists looked at 198 examples since 1929, noting that “most fracking related events release a negligible amount of energy roughly equivalent to, or even less than someone jumping off a ladder onto the floor.”

“The increased exploration and development spend we’re seeing in this year’s study speaks to the incredible opportunity unfolding in tight oil from shale formations and the high cost of developing these unconventional resources.”

The study of U.S. upstream (pre-refinery stage) capital spending by the 50 largest companies (based on 2012 end-of-year oil and natural gas reserve estimates) found a 20 percent increase compared to 2011. Ernst & Young said the increase was largely due to increased tight oil and liquids activity. That refers to development in tight-rock formations, made possible by hydraulic fracturing and horizontal drilling. Details:

• $26.3 billion in exploration spending in 2012.
• $103.4 billion in development spending.
• Companies spent 17 percent more to acquire properties for development in 2012 than they did in 2011 – spending for proved properties rose to $21.6 billion.
• Tight oil developments and greater focus on natural gas liquids led to a 45 percent rise in U.S. oil/liquids reserves over the five-year study period. Oil reserves for the 50 companies rose to 23.3 billion barrels.

Ernst & Young’s chart:

The study found that discoveries of new reserves, which increased every year of the five-year study period, reached 3.8 billion barrels last year, leading to an oil production replacement rate of 258 percent. In other words, advances in technologies and development strategies are expanding the outlines of U.S. energy reserves. Donadio:

“For years, people said the industry would struggle to replace US oil reserves. The steady rise in extensions and discoveries as well as oil production replacement rates changes that story.”

But wait – there’s more! This good-news story gets even better when you consider that the Ernst & Young study covers just the largest 50 companies. Total domestic exploration and production spending in 2012 was $286 billion, according to Oil and Gas Journal data (subscription publication).

Here’s the larger point. Oil and natural gas company domestic spending – investments in America – can continue and grow with policies that allow more access to develop oil and natural gas in federal areas, especially those offshore. Erik Milito, API’s director of upstream and industry operations, talked about offshore development during a conference call with reporters:

“The United States has an opportunity that few nations ever get. We have a chance to be a dominant player in global energy markets and guarantee our energy security for decades ahead. Achieving this feat must include tapping into oil and natural gas resources off our coasts in the Atlantic, Pacific, the Arctic and eastern Gulf of Mexico.”

Milito pointed to rising estimates of U.S. oil and natural gas reserves. The oil estimate has climbed from less than 150 billion barrels in 2003 to more than 220 billion barrels today, he said. In just 10 years estimates of U.S. natural gas reserves have increased from about 1,600 trillion cubic feet (tcf) to more than 2,300 tcf, according to the U.S. Energy Information Administration. ICF International says U.S. natural gas reserves are more than 3,500 tcf.

Yet, much of these reserves remain unavailable for development. Milito said 87 percent of federally controlled offshore areas are off-limits to exploration and development. The Bureau of Ocean Exploration Management currently says that 88.6 billion barrels of oil and 398.4 tcf of natural gas have yet to be discovered on our outer continental shelf, he said, and those estimates may be low because they’re based on 30-year-old surveys.

“No other developed nation in the world keeps so much of its offshore energy resources out of reach. Putting this American energy to work would provide a major boost to domestic energy production, state and local economies, and government revenue.”

Certainly, as the Ernst & Young study shows, America’s oil and natural gas companies are willing to make the capital investments in domestic development and production – investments that put Americans to work, grow the economy, generate revenues for government and make America’s energy future brighter.

Bill Cooper, president of the Center for Liquefied Natural Gas, talked with The Hill about the future of natural gas exports. “This is not the first time the country has argued protectionism versus exports and that kind of thing,” he said. “Historically, if we look back over it, protectionism tends to lead to economic stagnation.”

Dallas Morning News – U.S. Oil and Natural Gas Investment at 10-year High

An Ernst & Young study released Tuesday found that in 2012 the 50 largest U.S. oil and natural gas companies spent $185.6 billion on domestic exploration and  new production. That represented a 20 percent increase over the previous year and the most in the past 10 years.

Energy Biz – U.S. Could be a Dominant LNG Exporter

According to a Deloitte study, other countries like Poland and China could eventually become competitors in the global LNG export market, but the United States has a unique opportunity to be a dominant player.

My San Antonio.com – Shale Gas Boom Challenges Chemical Companies

Thanks to shale development and hydraulic fracturing, the U.S. petrochemical sector is being challenged to ramp up operations to take advantage of abundant and affordable feedstocks – seen in the investment of  more than $15 billion along the Texas Gulf Coast.

Nordonia Hills News Leader – Groups Say Ohio Shale Deposits  Could Be Most Prolific NGL  Producers Ever

Marcellus and Utica shale deposits in eastern Ohio and Pennsylvania are poised to become the largest  natural gas liquids production fields in existence, energy industry groups told an audience in Columbus, Ohio.

The last part first. The Keystone XL choice has obvious political implications. Over the almost five years the project has been under federal review, Americans have come to understand the Keystone XL’s importance, and they are rendering their opinion, as voters, in the strongest terms: Building the full Keystone XL is in the national interest. That’s what 82 percent of registered voters say in a new Harris Interactive Poll:

Breakdowns on the national-interest question by party identification and age:

And gender:

These are overwhelming majorities – underscored by the top-line margin (82 percent to 13 percent), as well as the difference between those who strongly support the Keystone XL (56 percent) and those who strongly oppose it (9 percent). As the graphs show, Americans’ belief that the project is in the national interest – again, the specific determination the president is charged with making – is strong across political identification, age and gender groups. API’s Cindy Schild, senior manager for oil sands and refining issues, during a conference call with reporters:

“From every perspective, the Keystone XL pipeline makes sense. The science supports this project. A bipartisan congressional majority supports it. Organized labor anxiously awaits its approval. And, above all, the American people support it – people of all political points of view, politicians from both parties, and national opinion leaders.”

Belief that the pipeline’s construction is in the national interest surely is built on a set of convictions about the project reflected in Harris’ survey:

• 81 percent agree that the Keystone XL would help strengthen America’s energy security by delivering oil from North Dakota and neighboring states to U.S. refineries.
• 77 percent agree that the Keystone XL would help strengthen America’s national security by increasing supplies of oil from North America instead from other parts of the world.
• 85 percent agree that the Keystone XL would help strengthen America’s economic security by creating jobs here and by keeping energy dollars here in North America.
• 75 percent agree that the Keystone XL would benefit the U.S. military by increasing access to oil from Canada, a NATO member and close neighbor.

Schild said four State Department assessments have each concluded that the Keystone XL would have no significant impacts on the environment, while it would expand trade with our No. 1 trading partner, Canada. Schild said the president has every piece of information needed to make a decision on a project that’s been studied so long it could have been built twice already:

“The facts support what Americans believe about the Keystone XL pipeline: It is a tremendous opportunity for America and is clearly in the national interest. No project in history has been analyzed as long and as thoroughly as the Keystone XL pipeline. It has been under review for more than twice as long as it will take to build. The delay has gone on for too long. The president needs to stand up and lead on this issue. We urge the administration to be guided by the facts, respect its own analyses, heed what Americans are saying, and approve the Keystone XL pipeline with no further delay.”

It’s well past time for the president to lead on the Keystone XL. In poll after poll after poll, Americans have basically said, “Build this pipeline, Mr. President.” For the jobs, for the economy, for the energy and for national security, build it.

This is the president’s choice: He can approve a shovel-ready project that clearly will provide broad benefits to the United States and put him on the side of the vast majority of Americans. Or he can bow to a small minority that offers no path toward keeping America well-supplied with the energy that makes our country strong and safe.

API’s Rayola Dougher stopped by Fox Business and outlined measures the industry takes to prepare its employees and facilities for the threats posed by hurricanes. “Worker safety is the industry’s top priority,” Dougher said.

CNN Money – U.S. Steps Up Natural Gas Exports

With  the Energy Department granting a second liquefied natural gas export license last month, the U.S. might soon see the approval pace quicken on the remaining export applications, CNN reports. 

San Francisco Gate – BP Announces Investment Plans After Alaska Oil Tax Change

The company says it  will invest another $1 billion for oil production in Alaska over the next five years. BP plans to  bring nine drilling rigs to the North Slope, beginning in 2015 thanks to a rollback of taxes on the oil industry signed into law  last month by Gov. Sean Parnell.

Foreign Affairs Blog – Build, Baby, Build

The Council on Foreign Affairs’ Jonathan Kay makes the economic and environmental case for approving the Keystone XL pipeline. “One way or another, the products of Alberta’s oil sands will be extracted, moved, and sold,” Kay writes. “It would behoove all concerned if the Keystone XL pipeline were part of the process.” 

Wall Street Journal – U.S. Oil Boom Scrambles Mideast Calculus

Government projections show that in September, for the first time in almost two decades, the U.S. will produce more oil than it imports, writes the Journal’s Gerald F. Seib. This is in large part thanks to innovations in drilling technologies like hydraulic fracturing and horizontal drilling.

CNBC – The Globalization of Energy Demand

In a guest post, Daniel Yergin writes that “the biggest innovation so far in the 21st century is shale gas.” Also noteworthy, according to Yergin: U.S. oil production is up almost 45 percent since 2008, and the fastest-growing source of new oil development in the entire world is the United States.

The U.S. is less dependent on production in the federal Gulf of Mexico, where hurricanes are more likely to cause disruptions. In 1997, 26% of the nation’s natural gas was produced there. By 2012, the Gulf of Mexico’s share fell to 6%. Oil production has also made a big shift to inland basins, thanks to booming shale plays in North Dakota and Texas.  The Gulf’s share of crude oil production in the U.S. narrowed to 19% last year from 26% in 2007 to 2011.Therefore, the impact of hurricanes on oil and natural gas production has been lessened by the shale oil boom taking place further inland.

Even so, America’s oil and natural gas industry remains committed to safety – the safety of its workers and facilities, as well as the environment – with the arrival of the hurricane season. According to government weathercasters, there’s a 70 percent chance of between 13 and 20 named storms in the Atlantic basin, seven to 11 of which might strengthen to hurricanes. Of that second group, three to six might turn into major hurricanes. Here’s a chart from the U.S. Energy Information Administration (EIA) showing the outlook range and the actual number of named storms and hurricanes 2003-2012 and the 2013 forecast:

The graphic underscores the need for readiness. The states of Alabama, Florida, Louisiana, Texas and Mississippi have more than a half-million petroleum industry employees. Thus, API plays two primary roles in hurricane preparedness: (1) Helps industry better understand environmental conditions in and around the Gulf during hurricane season or tropical storm activity, to help make offshore and onshore facilities less vulnerable; (2) works with member companies, other industries and governments to prepare for hurricanes and return energy operations as quickly and safely as possible. Measures include:

• Evacuation of non-essential personnel days before a tropical storm or hurricane reaches drilling and production operations.
• Relocation of drill ships to safe areas.
• “Flyovers” of onshore and offshore facilities to assess storm impact, such as flooding, facility damage, road or other infrastructure problems and spills. Many offshore rigs have GPS locator systems that let federal officials and drilling contractors monitor the rigs remotely before, during and after a hurricane.
• Refiners work with utilities to clarify priorities for electric power restoration, which is critical to restarting operations and minimizing disruptions to fuel distribution and delivery.
• Secure backup power generation equipment to ensure that critical refinery and pipeline infrastructure will have backup supply.
• Work with vendors to pre-position food, water and transportation.

Even with shale development’s impact, we’re still talking about significant levels of oil and natural gas production from the Gulf – and half of U.S. refining capacity is located on the Gulf Coast. The readiness activities above and more help protect lives and important national energy infrastructure, as well as the environment. For more information, see API’s hurricane information fact sheet.

• Sales of crude oil from federal lands, onshore and offshore, decreased 5 percent in fiscal year 2012 (ended Sept. 30) to 596 million barrels from 629 million barrels in FY 2011. That includes an 8-percent decrease in offshore volumes, partially offset by an 8-percent increase in much smaller onshore volumes.
• Natural gas sales from federal lands decreased 7 percent in FY 2012 to 4,262 billion cubic feet (bcf) from 4,584 bcf in FY 2011. Offshore volumes were down 19 percent, while onshore was virtually unchanged.
• Sales of all fossil fuels produced on federal lands (also including coal and natural gas plant liquids) fell by 4 percent in FY 2012.

Here’s the EIA table for oil and lease condensate:

And natural gas:

For both oil and natural gas, overall sales from federal production have declined since FY 2003 – oil by 12.2 percent and natural gas by 37.3 percent.  For each, declining offshore production is the dominant factor. EIA:

Crude oil and lease condensate production on federal lands dropped to 26 percent of total U.S. production in FY 2012, down from 31 percent in FY 2011. In contrast, total U.S. crude oil production (from public and private lands) increased by 15 percent because of rapid growth in production of tight oil from resources on private lands. … Natural gas production on federal lands dropped to 18 percent of the U.S. total in FY 2012, down from 20 percent in FY 2011.

The takeaway is in the stat showing that overall U.S. oil production grew in FY 2012 despite falling federal output. That is, in areas where the federal government controls access, leasing, permitting, etc., production is down.

The president has repeatedly called for an all-of-the-above approach to energy, and we agree. The EIA data suggests pro-growth policies are needed in federal areas – more access to public reserves and common-sense regulation that foster more leasing, timely permitting and increased drilling.

Thanks to its proximity to the Marcellus Shale formation, Pittsburgh is seeing economic and population growth, reports MSN. Pittsburgh's gross domestic product has increased by roughly $10 billion in the past five years as it transitions from manufacturing dependence to a more multifaceted economy.

Free Enterprise – Shutting Ourselves Off From the Global Economy Won’t Protect American Jobs

The post by Myron Brilliant makes the case for free trade and its benefits -- points that are key in the current debate over liquefied natural gas exports.

Bloomberg TV – Monterey Shale: California’s Trillion-Dollar Energy Opportunity

Video: There are more than 15 billion barrels of oil in California’s Monterey Shale, reports Bloomberg. Also worth noting: the federal government leases 180,000 energy-producing acres in the state – generating nearly $1.5 billion each year, of which the government receives about one-eighth or $200 million.

Real Clear Energy – Thanks to Natural Gas, Manufacturing Fueling America’s Recovery

In a guest post, the American Fuel and Petrochemical Manufacturers’ Charles Drevna highlights gains in U.S. manufacturing thanks to increased hydraulic fracturing and natural gas development: “Advances in shale development have changed the picture. Today, supplies of oil, natural gas and natural gas liquid (NGL) from shale, once thought unobtainable, have led to record-breaking volumes of fuel and raw materials that will rewrite our future.”

Roll Call – Expanding Energy Production and Exports Is Good for Economy, Small Business

In an RC commentary, Raymond J. Keating highlights developments in the past decade that “illustrate how natural gas has become a game changer in the U.S.” Increased production has been good news for the energy sector in terms of jobs and business growth, he writes. Nowhere has this change been more noticeable than in the energy sector’s small businesses.

Certainly, areas in red have a ways to go to meet ozone standards – but, obviously, much of the country is in compliance. Now, a map showing (orange and red) how much of the U.S. would be out of compliance if standards were set at 60 ppb:

We’ll do the calculating for you: At 60 ppb, 97 percent of the U.S. population would live in places out of compliance and subject to new emissions requirements. Virtually any human activity producing emissions could be restricted or affected. Howard Feldman, API’s director for regulatory and scientific affairs, talked about the potential impacts of changing ozone standards during a conference call with reporters. Key points:

• The oil and natural gas industry has spent $252.8 billion since 1990 to improve its environmental performance.
• EPA hasn’t identified compelling evidence for tightening the standards, which are working and will continue to work – because EPA and the states are just beginning to develop plans to meet the 2008 requirement.
• The controls needed to achieve stricter ozone standards don’t exist today.
• The potential for widespread economic harm from ozone standards at or below naturally occurring levels is real.

How real? Take another look at that second map. Feldman told reporters that in many places stricter standards would require ozone levels to be at or below peak background levels – including the nation’s parks and wilderness areas:

“Tightened standards could impose unachievable emission reduction requirements on virtually every part of the nation, including rural and undeveloped areas. These could be the costliest EPA regulations ever. … As you expand non-attainment you’re essentially putting up ‘closed-for-business’ signs in more and more places.”

The potential impact of stifling business activity and growth is plain. Lost jobs, lost opportunity, lower standards of living for affected Americans. There could be a similar economic impact from the costs of complying with more stringent standards, though that’s incalculable because the technology and processes to achieve such standards simply don’t exist yet. Feldman:

“In an impact analysis of the proposed ozone standards two years ago – standards probably similar to what EPA is considering today – EPA was unable to identify how the nation would comply.  It assumed that controls that don’t exist would somehow become available and cost-effective. Needless to say, operating under such stringent requirements could stifle new investment necessary to create jobs and grow our economy. That could slow the economy or even nudge it into recession.”

There’s another, better course. Progress is being made under standards set in 2008. States should determine the controls needed to comply with existing standards, and those controls should be implemented and then allowed time to take effect. Feldman:

“EPA literally, just yesterday, issued its proposed guidance for how places should start attaining the 2008 standard. It doesn’t seem right that we should be changing the standard now – it’s like moving the goalposts in the middle of the game. We think right now we should be working as a society on meeting the 2008 standard in the areas that are in non-attainment.”

“You’re tapping your enormous natural resources, but also getting a greater share of your energy from clean and renewable energy sources than any other country in the world.  The rest of the world looks at you with envy, at the progress you’ve made. The hemisphere has much to learn from your experience.”

Underlying the praise is the implication that because Brazil has used ethanol blends of up to 25 volume percent for years with no negative effects on vehicle models that also are sold in the U.S., the U.S. could use those blends, too – reasoning often used by those beating the drum for increased use of E15 fuel. Let’s look at the facts on Brazil’s ethanol use – as well as a number of other arguments made by ethanol backers.

First, the Brazilians transitioned to an ethanol-powered society over the past 38 years. They converted vehicles – with the government distributing the technology to allow gasoline engines to run on ethanol – and equipped service stations with pumps and storage tanks that could handle fuel with higher ethanol content. Eventually, Brazilian auto manufacturers made vehicles compatible with mid-level ethanol blends, which, as you can see by clicking on the table below, required a number of significant modifications:

(Note: The author of the article that contained the above table made the additional point that Brazil’s vehicle emission standards are less stringent than U.S. standards – meaning U.S. vehicles could need additional work and calibration to meet emission and durability standards. And as noted below, E15 has been shown to cause damage in some U.S. engines and fuel systems that have not been modified in accordance with Table D.)

Meanwhile, David Sandalow, now the Energy Department’s assistant secretary for policy and international affairs, wrote an article for the Aspen Institute a few years ago cautioning against assumptions the U.S. could duplicate Brazil’s experience:

[w]e should be careful in drawing conclusions about rapid supply expansion from the Brazilian experience of the ‘70’s. Several subsidies provided by the Brazilian government in that era – such as infrastructure investments by a state-owned oil company – could not be duplicated in the U.S. today.

Let’s recognize that the Brazilians were systematic in moving to higher ethanol blends – converting vehicles, manufacturing new ones compatible with mid-level ethanol blends and building compatible fuel infrastructure over time. Contrast that with the approach that U.S. ethanol proponents and the EPA have taken: clearing the way to offer E15 for sale first while hoping that infrastructure and vehicles that can store, dispense and use the fuel safely in the near future. More on this below.

Now, let’s talk about NASCAR and ethanol – sort of a cousin to the Brazil-ethanol argument. Basically, if NASCAR vehicles can use E15, why can’t the U.S. passenger fleet?

Except for having four wheels and an engine, today’s NASCAR vehicles running on E15 have very little in common with cars owned by the average motorist. NASCAR engines are designed for racing and have been modified to be compatible with the sole-sourced, Sunoco-produced competition E15 racing fuel. The engine alone costs between $45,000 and $80,000 – significantly more than the cost of the engines in most consumers’ cars and trucks.

The fuel pumps on NASCAR vehicles are racing pumps that have been modified to specifically handle E15 and high-performance fuel-flow rates. Obviously, most consumer vehicles on the road have not undergone these modifications.  As research has shown, engines and fuel systems in today’s consumer vehicles can be harmed by E15. Furthermore, government research shows that E15 can adversely impact sensors that help control emissions on consumer vehicles. Conversely, race car emissions are uncontrolled and do not have similar sensors.

Additionally, NASCAR engines and fuel pump systems are highly stressed components that undergo intense maintenance, inspections and rebuilds after each race.  Unlike professional racecar drivers, typical car owners don’t have the time or money to get their cars serviced after each drive. So, to equate E15 miles accumulated on a NASCAR race vehicle with those driven on a typical vehicle sold to and operated by the average consumer is not a relevant comparison. In fact, it’s just silly.

Here’s another one from Big Ethanol: Why not just spend money and install retail equipment that can store and dispense E15?

The big question is who would pay for that? Corn growers and the Renewable Fuels Association certainly aren’t volunteering. No, Big Ethanol thinks oil companies should retrofit tens of thousands of service stations to use higher blends of ethanol. But as I explained here, oil companies don’t own 97 percent of gas stations. Dan Gilligan, president of the Petroleum Marketers Association of America said it best:

There are 700,000 gasoline dispensers in use in the U.S. and probably fewer than 5,000 have been certified for E15. There are over 3,000 miles of underground piping systems that have not been certified as safe for E15 as well. Who is going to pay to replace the dispensers and underground piping, which will cost some retailers hundreds of thousands of dollars? Over 94% of the gas stations in the U.S. are owned by independent businesses, and the major oil companies cannot order those retailers to replace dispensers and piping. The retail gasoline business is brutally competitive and the average retail outlet has an annual net profit of $40,000.

The National Association of Convenience Stores estimated it would cost nearly $10 billion industry-wide just for dispensers for ethanol blends higher than E10 (emphasis added):

Even with UL-approved retrofit kits in place by pump manufacturers such as Gilbarco and Wayne, the costs will still be significant at $4 billion — all before breaking concrete to change out underground storage tanks. The price tag could hit $20 billion for a product consumers aren’t even asking retailers to sell.

Big Ethanol points to EPA’s approval of E15 for the marketplace, but as I pointed out in this post and this post, despite what EPA says, the science is clear: E15 has been shown to cause damage in some engines and fuel systems.  For example, this warning from the owner’s manual of a model year 2013 Dodge Charger, makes it pretty clear that unlike EPA, Dodge does not believe all model year 2001 and newer vehicles can run safely on E15:

DO NOT use gasoline containing Methanol or gasoline containing more than 10% Ethanol. Use of these blends may result in starting and driveability problems, damage critical fuel system components, cause emissions to exceed the applicable standard, and/or cause the “Malfunction Indicator Light” to illuminate.

Neither does Porsche:

Do not use any fuels containing more than 10 percent ethanol by volume.

Or Nissan:

Do not use E-15 or E-85 fuel in your vehicle. Your vehicle is not designed to run on E-15 or E-85 fuel. Using E-15 or E-85 fuel in a vehicle not specifically designed for E-15 or E-85 fuel can adversely affect the emission control devices and systems of the vehicle. Damage caused by such fuel is not covered by the NISSAN new vehicle limited warranty.

Or Toyota:

When it comes to determining what will and won’t harm my automobile, I tend to trust the folks who built it. The real question is, why don’t ethanol advocates acknowledge that the Renewable Fuel Standard - whose mandates would force more ethanol into gasoline than is safe - is irretrievably broken and should be repealed?

A newspaper editorial urges new Energy Secretary Ernest Moniz to act swiftly on applications to export liquefied natural gas: “We are confident that any even-handed consideration will lead Mr. Moniz to the same conclusion that so many experts have already embraced: that allowing the country to sell its bounty to the world will leave it and its trading partners better off.”

National Geographic – Monterey Shale Shakes California’s Energy Future

With the U.S. government estimating as much as 15.4 billion barrels of oil could be locked in the Monterey play, a state that has been a leader in clean energy could see a different energy future unfold, NatGeo reports. One study found that development of shale energy could add as many as 2.8 million jobs by 2020 and increase tax revenue by $4.5 billion.

Platts – ExxonMobil Confidence in Deepwater Gulf Projects Grows

CEO Rex Tillerson says the company is becoming more active in the Gulf because of recent successes. ExxonMobil scored the largest dollar amount of high bids in March’s Central Gulf Lease Sale 227 - $220 million.

Houston Chronicle – Cyber Security Becoming Top Concern for Energy Industry

An Ernst & Young survey of energy executives finds that cyber attacks and other IT security issues have cracked the list of top 10 concerns for the first time, ranking No. 9. Execs’ top issue, the survey said, is the risk of a health, safety or environmental incident – as it was in the previous survey.

Texas is killing it, reports the magazine’s website A new analysis of jobs recovered since the economic downturn finds that the state’s  largest city stands apart as the most powerful job engine in the country – thanks to its ties with the energy industry.

CNN Opinion – Make Sure Fracking is Done Right

In a guest post, the Council On Foreign Relations’ Michael Levi writes that “people are right to insist that [hydraulic fracturing] is done safely, but they're wrong if they conclude that it can't be.”

Washington Times – Illinois Edges Closer to Endorsing Hydraulic Fracturing

WT has a recap of the conversation and steps that have been taken by the Illinois  legislature to bring hydraulic fracturing to the state. The newspaper notes that “claims of water contamination … have been disproved by further scientific analysis by state officials.”

The Town Talk – Louisiana Shale Play Factors in Plans for New Manufacturing

Thanks to increased hydraulic fracturing in the Haynesville Shale, more than $20.2 billion in new construction-related activities and manufacturing projects are headed directly to the state. These natural gas-induced projects are estimated to generate some 214,670 jobs through 2019.

Fuel Fix – W. Pa. Business Finds Niche in Drilling Industry

Fuel Fix highlights the economic impacts of hydraulic fracturing in communities like Clarksburg, Pa., where one manufacturer has found a market for drilling components. It’s an example of how in  many communities, local businesses are  becoming innovators of new technology.

Longview News-Journal – Ship It Out: Energy Secretary Should OK Pending LNG Export Plans

In an editorial, LN-J stresses the need for the Energy Department  to approve about 20 pending applications for liquefied natural gas export projects. The piece notes a study commissioned by the  department last year pointing to economic benefits from the export of natural gas.

We couldn’t help noticing one of the captions below the bubbles, second from the right, showing the location of three oil and natural gas companies – ExxonMobil (37 percent effective tax rate), Chevron (39 percent) and ConocoPhillips (74 percent, or more than $58 billion on earnings of nearly $79 billion) – all well above the 29.1 percent overall effective tax rate, according to the data set used by The Times.

You can see where individual industry sectors stand. Here’s an "iso-graphic" for the oil and natural gas industry (average 37 percent effective tax rate):

And for the information technology industry (average 21 percent), including Apple’s (large purple bubble) 14 percent:

This is not to suggest anything about other industries and the taxes they pay. Rather, this shows that the oil and natural gas industry pays its fair share in taxes and then some – about $85 million a day. Here’s another comparison of effective tax rates by industry, also based on S&P data:

The U.S. oil and natural gas industry pays taxes at this level because it is robust and growing, supporting more than 9.2 million jobs. With pro-growth, pro-energy development policies, our industry could generate more revenue for government – more than $127 billion in additional, cumulative revenue by 2020 and more than $800 billion by 2030, according to a study by Wood Mackenzie. These totals dwarf the revenue that could be gained by raising industry’s taxes, as some have proposed. The better, smarter path – one that generates far more revenue for governments – is to increase access to U.S. oil and natural gas reserves, develop common-sense regulatory regimes and allow these companies to do what they do well for America.

Nearly half (46 percent) of new oil and natural gas jobs in the first quarter of 2013 were filled by women – a  shift for an industry that is still 80 percent male.

Breaking Energy – Everything’s Better with Bakken

Thanks to increased production out of the Bakken shale region, East Coast refineries are making a comeback. BE notes that Phillips 66’s  Bayway plant in New Jersey is  making gains in refining while also housing  a merchant co-generation GE power plant and a DuPont chemical manufacturing operation.

The Seattle Times – Industry Giant GE Digs Deep into Oil and Natural Gas Drilling

Advances in hydraulic fracturing and increased natural gas production has  General Electric  investing billions into U.S. oil and natural gas  companies. GE is opening a new laboratory in Oklahoma with plans to continue investments across the U.S.

The Economist – Difference Engine: Fuel for the Future?

America’s unexpected, and most welcome, bonanza of natural gas from its vast shale deposits seems to be doing as much to reduce pollution as many of the environmental efforts introduced over the years, writes The Economist.

Globe and Mail – Rejection or Delay of Keystone XL Could Threaten $9 Billion in Investments

According to a new RBC Dominion Securities report, investments in  oil sands development are at risk if a decision to approve  the Keystone XL pipeline is further delayed or  if the project is rejected by the Obama administration.

Bloomberg – Eagle Ford Oil Output Rises 77 percent

Oil production in Texas’ Eagle Ford Shale play rose to more than 529,800 barrels of crude a day in March – up from about 298,000 barrels/day last year.

“The way I look at it is that this natural gas boom is a boon. First of all, we all know that it is partially responsible for the decrease in CO2 emissions that we have experienced over the last years in the absence of, at least, over-arching legislation. Secondly, what I would argue is that the way to look at it – and, you know, as gas as kind of a bridge to a very low carbon future – is that it affords us a little bit more time to develop the technologies, to lower the costs of the alternative technologies, to get the market penetration of these new technologies.”

In other words, Moniz is saying that developing our natural gas reserves is key to our energy present and future – and that any discussion of better air must include clean-burning natural gas. The secretary’s comments are so timely, given recent discussion in Washington of federal hydraulic fracturing regulation and the export of liquefied natural gas (LNG). Add in the need for more access to new natural gas reserves, and you’ve got the major factors that will determine whether our natural gas wealth will have the kind of impact Moniz described.

The fact is America has vast natural gas reserves because of shale, developed with hydraulic fracturing and horizontal drilling. Here’s how the U.S. Energy Information Administration charts production growth over the next few decades:

A new Deloitte report says the United States is about to become a “shale globalizer” because of the revolution in unconventional production – again, thanks to fracking – meaning the ability to shape the global natural gas marketplace. The question is whether we’ll fully capitalize on our reserves or whether new layers of regulation, self-imposed export market restrictions and limited access will get in the way.

This week Senate Environment and Natural Resources Committee Chairman Ron Wyden held a couple of roundtable discussions on natural gas, including one focused on safe development. Chemical disclosure, safe drilling operations, emissions and water management got expert attention. Wyden:

“Today, we heard from leaders in the natural gas industry, from the environmental community and committee members on both sides of the aisle, all of whom agree we must continue to work, using a bipartisan approach, to address the concerns associated with increased natural gas production. There are substantial environmental questions here, but there’s no difference of opinion, at least in the Senate, that this is something where we need to try to find common ground. I think there’s a real opportunity for progress.”

Industry is already on it, with operating standards and practices that address everything on the chairman’s list and more:

These result from a detailed process based on input from a broad range of stakeholders, with the goal of developing industry’s benchmarks for performance, interaction with communities and environmental protection. They’re regularly updated to keep pace with new developments in resource knowledge, technology and know-how. Industry standards and effective tools like the FracFocus.org chemical disclosure website show that America’s oil and natural gas companies are committed to safe and responsible development and transparency – all to earn confidence from partnering communities where oil and natural gas are produced.

Our energy-producing states are on it, too, parlaying experience, vast knowledge of their individual geologies and the highest incentive to get energy development right -- to build, with industry’s willing input, effective regulatory regimes that earn praise from federal officials.

These points are worth noting, because Chairman Wyden’s concerns are shared by many Americans. Hydraulic fracturing is safe, as recent studies have shown. And the American people see that our natural gas wealth from shale can meet domestic demand and generate additional wealth here at home by supplying our friends overseas – 71 percent in a recent poll agreeing that LNG exports will help create U.S. jobs and 66 percent agreeing exports will lift our economy.

In a number of ways the shale energy discussion is at a crossroads. We have the reserves, and we have the technology. We need clear policies that will foster continued growth, safely and responsibly. Debate is centered on policy paths – and it was good this week that senators insisted on a fact-based discussion of these issues. It’s imperative for progress toward the future Moniz sketched – well-supplied along the way with affordable energy.

In a letter, 24 Senate Republicans urged President Obama not to tie the Keystone XL pipeline project to “wholly unrelated and economically disastrous new regulatory policies.”

Bloomberg – FracFocus Drillers’ Registry to Create Chemicals Database

A revamped FracFocus website – expected next week – will now allow regulators to search and aggregate data. The Environmental Defense Fund’s Mark Brownstein called it  “a substantial improvement.”

Penn Energy – Port Arthur Stem Cracker Now Processing Shale Gas Ethane

Not commonly known, hydraulic fracturing also produces ethane – a  feedstock for manufacturers. Capitalizing on the abundance of shale production in Texas, a Port Arthur steam cracker plant will now be able to process this ethane.

Platts – Did the Shale Revolution Already Find Its Biggest Oil Field?

Credit Suisse: Shale is a vital component of current U.S. production, which is growing at a huge clip – as much as 10 million b/d  in the next several years, up from 6.5 million b/d last year. CS also notes that “five years ago, oil companies were only beginning to explore the merits of a practice that is now standard.”

AEI Ideas Carpe Diem Blog – Shale Surge Spreads to Five States, Combined Output Up 46 Percent

Mark J. Perry notes that  recent breakthroughs in advanced drilling technologies have  brought large increases in shale oil output over the past three years not only to Texas and North Dakota, but to five other states: Oklahoma (51%), Utah (46%), Colorado (64%), Wyoming (22%) and New Mexico (46%). 

Politico – The Stakes of U.S. Prosperity, LNG Trade

Politico has an opinion piece noting the geopolitical role American natural gas exports would have on the LNG market. “The real geopolitical potential lies in liberalizing the U.S. export regime for natural gas trade. With U.S. natural gas prices now one-third to one-fifth of those in Europe and Asia, market incentives clearly align with U.S. strategic priorities.”

Fort Worth Star-Telegram – Industry Leader Says Natural Gas Exports Should Be Approved

API’s Jack Gerard on LNG exports: Rather than picking winners and losers for the permits, the federal government should grant all the permits, “and let the market decide.”

API Chief Economist John Felmy’s reporter briefing Thursday focused attention on two paths: one that will increase domestic production of oil and natural gas and one that won’t. Unfortunately, the administration – via proposals to increase energy taxes and a new wave of questionable regulation – looks headed down the wrong path, a recipe for disaster for American energy:

Felmy:

“The White House says it’s concerned about gasoline prices. But its energy policies aren’t helping the American people much. And some of its proposals, especially those on taxes and a barrage of new regulations, are a recipe for disaster.”

Let’s take a closer look at the key ingredients:

Regulation – Existing sulfur content rules for gasoline already have eliminated about 90 percent of that content and continue to reduce it. EPA’s proposed Tier 3 rule would provide very little additional benefit while potentially adding up to 9 cents per gallon to the cost of making gasoline. When Tier 3 is combined with a possible new gasoline vapor reduction requirement, the per-gallon increase in the cost of making gasoline could reach 25 cents, according to Baker & O’Brien. Finally, Renewable Fuel Standard mandates could drive up the costs of manufacturing gasoline 30 percent by 2015, according to a NERA study. Felmy:

“The administration … needs to pull back on the onslaught of multi-billion dollar regulations it has planned for the oil and gas industry. While the benefits of these rules would be negligible, they would drive up refinery costs, potentially putting some refineries out of business, reducing U.S. fuel manufacturing capacity, and increasing reliance on imported fuels. These are costs on the economy and could impact all consumers.”

Higher Taxes – Proposals that single out oil and natural gas companies for $40 billion in higher taxes would depress investment in new production and diminish growth in supplies that could help push crude prices down, according to a Wood Mackenzie study. Wood Mackenzie also estimates that tax increases on the industry could reduce U.S. oil output 700,000 barrels per day, erasing about half of the 1.5 million/per day increase in output the U.S. has achieved over the past two years. Felmy:

“The administration needs to stop obsessing about raising taxes on a single industry. The oil and gas industry pays its fair share. It delivers substantial revenue to our government – about $85 million a day – and pays income tax at effective rates higher than most other industries.”

Restricted Access – Current policy is keeping 87 percent of our offshore acreage off-limits to oil and natural gas development. Meanwhile, leasing and permitting policies have resulted in a marked decline in new wells on federal lands (down 40 percent, 2008-2012). Felmy:

“If the administration really wants to help consumers, it needs to do an about-face on its approach to federal lands development. It advertises the fact that oil production has been increasing on its watch, but in fact its policies have discouraged development. … Total oil production is up, but only because of what is happening on state and private lands.”

Felmy outlined an alternative recipe that could increase oil output and help consumers:

• An about-face by the administration on oil and natural gas development in federal areas. Increased access could add more than 4 million barrels’ worth of oil and natural gas per day by 2020, Wood Mackenzie says.
• Adopt a common-sense approach to regulation that seeks input from stakeholders and considers the real-world costs of new regulatory proposals, individually and cumulatively, in the context of actual benefits provided.
• Pursue pro-growth policies in the place of anti-growth tax increases – policies that create an environment for investment and innovation.

Felmy:

“The administration could do a lot better job on gasoline prices. Efficient use of supplies is important. An all-of-the-above approach to energy is important. But if the administration is really serious about helping consumers, it also will expand domestic oil and natural gas development in federal areas and abandon its counterproductive ideas on more taxes and overly stringent or unnecessary regulations.”

Virginia Senators Mark Warner and Tim Kaine want the current offshore drilling moratorium lifted off the coast of their state. Under their legislation, leases for offshore oil and natural gas drilling as well as wind farms could take effect in 2020. 

Fuel Fix Blog – W.Va. to launch New Oil, Natural Gas Job Training Center 

Two West Virginia colleges are opening training facilities focused on oil and natural gas development. Both schools will house indoor and outdoor laboratories to simulate drilling operations and will offer a variety of training programs to prepare students for jobs in the industry.

The Hill – The President’s Legacy on Energy

Economist Michael Economides argues for the Keystone XL pipeline and for U.S. natural gas exports, noting “nations with abundant natural gas, oil and coal reserves have a marked advantage over others struggling to harness their energy potential or lacking recoverable resources altogether.”

Bloomberg Businessweek – NM Sees Oil Production Jump 46 Percent

New Mexico is one of five western states that helped boost national oil and natural gas production by more than 2 million barrels a day over the past three years, according to the U.S. Energy Information Administration. Due to advances in hydraulic fracturing, allowing development of the state’s shale formations, the southeastern part of the state has seen a surge in production.

Forbes – Obama has been Dealt a Spectacular Energy Hand: He Should Play It

In an opinion piece, James Glassman writes that “the President is now looking at some of the best cards in the deck – thanks to American imagination, capital, and perseverance. The question now is whether he will squander his good fortune and continue to constrain economic growth in the process by keeping a lid on a once-in-a-century energy revolution.”

Kansas City Star – White House Running Out of Reasons to Reject Keystone XL Pipeline

Breitling Energy’s CEO Chris Faulkner writes that approving the Keystone XL pipeline “would generate tens of thousands of desperately needed jobs right here in the United States, while also putting us on the pathway to long-term energy security.”

RealClearPolitics Energy Summit: Fueling America's Future from RealClearPolitics on FORA.tv

Regardless of whether the energy comes from water, air, the sun or the ground, some key messages/themes were echoed by all participants:

• America is rich in energy and energy technology. Far from running out, we are “running into energy.”
• America needs a true all-of-the-above approach to energy, one that emphasizes the sources that run our economy now and will in the future, as well as emerging sources and technologies for the future.
• Energy from America means jobs for Americans.
• The United States had led the way in energy innovation and will in the future because our system encourages competition.
• The best approach for the federal government is to end policy uncertainties and allow our energy providers to do their jobs.

Unfortunately for the governor, that’s what you can expect when you’re keeping significant shale reserves underground – delaying jobs and growth – while other states are realizing both from shale development, states like Pennsylvania, Texas, North Dakota and soon, Illinois.

Lawmakers in Illinois have approved a bill for state regulation of hydraulic fracturing that would clear the way for development of its shale reserves. The measure was crafted with input from industry and environmental groups, including the Sierra Club.

New York continues to dither, maintaining a moratorium on hydraulic fracturing imposed in 2008 – blocking job growth and economic stimulus when the state’s unemployment rate remains above the national rate. Residents in parts of the state’s Southern Tier are suffering the cruelest cut. Gannett Albany Bureau Chief Joseph Spector’s blog:

Only two areas of the state last month didn’t increase jobs between April 2012 and April 2013: Elmira and Binghamton. And today, labor statistics showed that Elmira was the only area in the state that didn’t see its unemployment rate decrease over the year. Elmira and Binghamton share something else: They both sit over the gas-rich Marcellus Shale.

New Yorkers know of the benefits that fracking has brought to neighboring Pennsylvania – new jobs and boosts to manufacturing and associated sectors. They are benefits that could accrue in the Empire State as well.

Yet, Spector reports the governor is unmoved by the economic potential of shale. Cuomo said this week a decision on fracking won’t be based on the local economy. “The decision is made on the science,” he said. “So these numbers wouldn’t matter.”

The science (including recent studies by the U.S. Geological Survey and Duke University) says fracking is safe – and a number of officials and agencies have said so – including New York’s own analysis. And these economic numbers matter: 15,000 to 18,000 jobs in the Southern Tier and Western New York, $11.4 billion in economic output, $1.4 billion in tax revenues to localities and the state, according to a Manhattan Institute study.

Jobs and opportunity are important for individuals and communities. New York has waited long enough, studied long enough – watched other states prosper from shale development long enough. Getting energy from shale is being done safely. Needed is the political leadership to move forward, as other states are doing, to safely and responsibly let New York capitalize on its shale wealth.

In an ongoing series of hearings focused on American natural gas exports, the Senate Energy Committee heard from panelists on the pending LNG export applications. The president of Sempra LNG noted that “if we wait too long … we will lose the jobs” associated with U.S. LNG projects.

National Journal – Graphic: Keystone XL is More Than a Pipeline

The House is set to vote on legislation that would approve construction of the Keystone XL pipeline today. In advance of the vote, NJ has an infographic that details everything from the project’s route size and how much oil it will deliver to its  supporters and opponents.

Anchorage Daily News – Governor Signs Oil Tax Cut, Budget Bills

Legislation signed into law by  Alaska Gov. Sean Parnell is designed to  overhaul the state’s oil tax structure with a goal of  increasing oil production and industry investment.

LNG World News – ACC President Highlights Shale and Manufacturing at Gas Forum

“Abundant and affordable supply of natural gas has transformed the U.S. chemical industry from the world’s high-cost producer five years ago to among the world’s lowest-cost producers today,” American Chemistry Council President Cal Dooley told the Senate Energy Committee yesterday.

WWLTV.com – Haynesville Shale Natural Gas a ‘Game Changer’ for New Orleans Region

According to an LSU study, the natural gas discoveries in north Louisiana’s Haynesville Shale play and  new manufacturing facilities in the state could  generate more than 214,000 new jobs over the next nine years.

Denver Business Journal – Next Generation Fracking Equipment Comes to Colorado

More technological innovations from the oil and natural gas industry: Colorado’s Niobrara oil fields will see cutting-edge technology – making hydraulic fracturing more efficient.

Think about it:  From the gasoline in our cars and trucks to the asphalt in our roads, from bicycle helmets to medical equipment, 60 percent of energy used daily by Americans is delivered by tanker.

The men and women of the maritime industry and the vessels they operate – around the clock and across the world - safely deliver the energy we need. Smaller tankers transport gasoline and other specialized petroleum products throughout the United States, while tankers  as long as the Empire State Building is tall transport crude around the globe.

Over the past decade, more than 99.9997 percent of oil delivered by tankers to the U.S. reached its destination without incident. Today's cutting-edge tankers are the product of a commitment to safety, combined with the power of computer-assisted design. As a result, the new ships traveling the seas are stronger, more maneuverable and more durable than their predecessors. 

We met one member of our merchant marines, Janet DeCastro of Polar Tankers, last year. She represents an important group of people playing a vital role in the  safe delivery of oil and protection of the environment: 

Tankers and the people who run them work hard to provide the energy resources that power American industries and fuel our domestic economy every day. 

Note: Since the filming of this video, Janet DeCastro is now a Master with polar Tankers.

Currently, the Energy Department is considering 18 applications for U.S. facilities that would export American LNG to friends and allies overseas. Studied analyses have projected broad job and economic benefits to the U.S. from LNG exports (here and here), with a new report this week dispelling the notion that exports would significantly impact domestic prices. These reports strongly suggest that government should approve the remaining LNG applications and not try to pick winners in the private market.

Another powerful suggestion on natural gas policy comes from the American people, in new polling from Harris Interactive that shows strong support for exporting LNG – for jobs, for the economy, for American security. Key results:

71 percent agree: Exporting natural gas will help create U.S. jobs

66 percent agree: Exporting natural gas is good for the U.S. economy

 
Other poll results:

• 66 percent agree: Exporting natural gas keeps energy dollars in the United States.
• 63 percent agree: Exporting natural gas helps reduce America’s trade deficit.
• 64 percent agree: Exporting natural gas strengthens U.S. energy security.

Favorable support on all of these questions is found across age and gender groups. API Chief Economist John Felmy:

"American voters know that exporting more of America's domestic energy would lead to more jobs, help the economy, and reduce the nation’s trade deficit. The United States has the opportunity to get it right and use its abundant supplies of clean-burning natural gas resources to meet the president’s goal for doubling U.S. exports by 2015.”

America’s opportunity with abundant, affordable natural gas is there, but it will take the right policies to turn opportunity into reality. It will require access to new reserves and a regulatory approach that leads to safe and responsible development - without unnecessarily encumbering enterprise and innovation. The Wall Street Journal (pay publication) warns against delays and conditional approvals on LNG exports:

Regulatory indecision is nearly as much of a threat to gas development as political opposition in an ultra capital-intensive industry. This month Japan's Mitsubishi and Mitsui and France's GDF Suez committed to invest $6 billion to $7 billion in a Louisiana LNG development backed by the U.S. Sempra Energy – assuming regulatory approval. Such deals will wither if regulatory uncertainty grows. A barrage of federal regulations and enforcement decisions over the last several years means that natural gas permits that used to take 60 days now require up to 18 months, and projects that used to win approval in a year take three times that. The danger is that the U.S. is lilting into a system in which politicians second-guess markets and decide how much of America's natural gas assets to sell abroad.

Again, it’s good that Sen. Wyden is holding these natural gas hearings. American-made energy can be a game-changer for our country – creating jobs, helping grow the economy, strengthening our energy position in the world. But the right policy choices and actions must follow. The Harris Interactive poll clearly indicates the country senses the momentous opportunity at hand. Felmy:

“The American people get it. The U.S. can be a global energy superpower as long as our leaders pursue smart energy policy.”

Good news from the U.S. Bureau of Labor Statistics: Of 3,900 positions added in the oil and natural gas industry nationwide in the first quarter of 2013, almost half or 1,800 were filled by women.

AEI Ideas Carpe Diem Blog – The Most Economically Successful Metropolitan Area in the Country

As a direct result of all the shale oil and natural gas activity in the Permian Basin area of West Texas, the economy of Midland is booming, writes Mark J. Perry. There is also an unprecedented construction surge taking place in the town – building permits in March skyrocketed to 347, which was a 580 percent increase from  a year ago.

Zanesville Times Recorder – Free Trade Should Include Natural Gas

A former mayor of Zanesville, Ohio, writes that our country exports numerous products already and “additional economic benefits can achieved if natural gas is added to the list of American contributions to the world economy.”

Washington Post – Alaska Announces Plan to Assess Oil, Natural Gas Potential at Arctic National Wildlife Refuge

Alaska Gov. Sean Parnell announced a multi-year, multimillion-dollar plan to study oil and natural gas reserves in ANWR yesterday. Parnell said he is prepared to ask the state legislature for $50 million toward funding a seismic program if the federal government will agree to be a partner.

Bloomberg – U.S. LNG Export Potential Gaining Momentum

Liquefied natural gas exports from the U.S. are looking more likely after the Freeport LNG terminal got conditional approval from the Department of Energy last week, analysts from Goldman Sachs said.

Wall Street Journal - Natural Gas Exports, Maybe 

WSJ notes in an editorial that the Freeport LNG terminal approval is encouraging but came with conditional language that could perpetuate uncertainty among energy investors. The newspaper said the approval is important, but "only if the Administration gets its act together. The danger is that the U.S. is lilting into a system in which politicians second-guess markets and decide how much of America's natural gas assets to sell abroad." (subscription publication)

Forbes – Why President Obama Will Say Yes to Keystone XL

Contributor Brigham McCown writes that “for 1,705 days, the Obama administration has delayed and sidestepped a decision that is really a no-brainer. It is time to approve the remaining portion of Keystone when it is in the best interests of the United States.”

An American Chemistry Council (ACC) analysis points to rich capital investments and job gains to be realized in that sector because of abundant, affordable supplies of shale natural gas:

• $71.7 billion in chemical industry investments publicly announced through the end of March.
• 46,000 new chemical industry jobs by 2020.
• 264,000 jobs in supplier industries by 2020.
• 226,000 induced jobs in communities where chemical industry workers spend their wages.
• $20 billion in federal, state and local tax revenue.

ACC President and CEO Cal Dooley:

“The United States has become a magnet for chemical industry investment, a testament to the favorable environment created by America’s shale gas as well as a vote of confidence in a bright natural gas outlook for decades to come. What’s especially exciting is that half of the announced investments are from firms based outside the U.S., which means our country is poised to capture market share from the rest of the world.”

The report:

“Right now, the chemistry industry has the confidence needed to drive new U.S. investment. Policymakers can help ensure that confidence continues for decades to come.”

Then there’s this report from the Bipartisan Policy Center (BPC), finding that the U.S. has ample domestic supplies to meet future demand for natural gas without significant price increases, and that exports of liquefied natural gas (LNG) are unlikely to have much impact on domestic prices. BPC:

“Overall, the United States is projected to become a net exporter of natural gas between 2017 and 2021 in all of the modeled scenarios. As domestic production of natural gas exceeds domestic consumption, the United States is projected to export natural gas via pipeline and as LNG. However, contrary to the concerns recently expressed by some large users of natural gas, increased exports are likely to have only a modest impact on domestic gas prices.”

Let’s make an argument that the two reports have an important connection. First, the abundance of natural gas, thanks to hydraulic fracturing in shale and other tight-rock formations, is a game-changer for the United States – provided the right policy choices are made. These include access to new reserves and oversight policies that foster safe and responsible development without chilling investment – which is a concern about the Bureau of Land Management’s just-proposed fracking rule, that it could place additional regulatory layers on top of effective state regulation and delay efforts to develop federal areas.

Second, adopting a market-based approach to LNG exports is a key to keeping a robust domestic natural gas industry sector healthy. Allowing natural gas producers to supply the domestic market as well as buyers in friendly countries overseas is fundamental to sustaining strong exploration and development activity in this country. That’s the way to ensure a market demand-based dynamic will work for the domestic industry and the U.S. workers employed by it.

The ACC report shows how this dynamic is working in that sector. The BPC report underscores that there’s no good reason to limit the natural gas sector by arbitrarily limiting our country’s capacity to be a natural gas exporter.

Marty Durbin, president and CEO of America’s Natural Gas Alliance:

“… selling natural gas to our allies in the global market is a no-brainer. It will improve the U.S. trade balance, deliver billions of dollars in economic benefits and jobs here at home while helping the President achieve his goal of doubling exports. And because of significant international competition for the global LNG market it’s critical that the United States get in the game soon.”

Currently, the Energy Department is considering requests for LNG export licenses from 19 U.S. applicants, after approving one last week. It should approve the remaining requests as well.

This will require rejecting the kind of protectionist, build-a-wall-around-America approach proposed by Rep. Edward Markey and others, who claim restricting LNG exports is the best thing for America. The Markey approach ignores analysis in two other reports (here and here) that shows significant gains for our economy, consumers and workers would come from LNG exports.

Policymakers should reject an approach that limits America's natural gas exporting potential - a position that's simply overwhelmed by the projected benefits of LNG exports. API President and CEO Jack Gerard:

“Allowing the export of LNG would mean more jobs, growth in U.S. GDP, and less debt – key priorities of the American people. The government can demonstrate its commitment to addressing these priorities by promptly approving authorizations to export LNG."

“Was EPA aware of ongoing (Coordinating Research Council) testing on engine durability, fuel pumps and other engine components? Why not wait until that test was complete before making a decision? Because in the aftermath it looks like the decision was, at best, premature. The CRC data shows millions of approved vehicles are in danger of engine damage.”

Let’s take on the faulty claims in McCarthy’s written responses in turn:

EPA or the Energy Department was “expressly denied” a role in CRC’s E15 testing program: False

• EPA, DOE and the U.S. national laboratories were key players before and during CRC’s E15 research, with more than 10 different staff members from these entities participating in more than eight meetings between 2008 and 2010. These meetings concerned potential gaps in CRC’s research, its test plans and procedures. The government representatives provided valuable input and had ample opportunity to offer criticism as well.
• Staff members from DOE’s National Renewable Energy Laboratory (NREL) actively participated in CRC groups doing mid-level ethanol blends research and helped write final reports. NREL even hosted one of the meetings.

CRC’s testing had scientific shortcomings: False

• Although McCarthy’s response hit CRC for not testing components or vehicles on E0 and E10 fuels, CRC’s baseline testing is, in fact, consistent with EPA’s. Note: The agency granted its second waiver on E15 with no E10 testing, and in its first E15 waiver decision it said that E0 was the reference fuel.
• For 70 years CRC has represented the gold standard for research on fuels, engines and vehicles. CRC tests are developed and managed by the same company automotive engineers who design and build cars. 

Complete information on CRC’s testing program was not made available to government: False

• Again, staff from EPA, DOE and the U.S. national laboratories were involved before and during CRC’s E15 research (see above) – underscored by the fact DOE reviewed and made comments on CRC’s program.
• See emails from CRC to DOE and EPA staff, informing them of the availability of CRC research reports as they became available, by clicking here (attachments).

Our industry has great confidence in the ability of the automotive and fuels experts who sit on CRC research and testing committees. They conduct well-conceived and thorough technical investigations of consumer acceptance and vehicle safety-related issues associated with the use of mid-level ethanol blends in vehicles operated by our mutual customers. In fact, both DOE and EPA have funded research through CRC in the past (see Page 1).

Bottom line: EPA approved E15 for the marketplace knowing full well that automotive and fuels experts were still studying its impacts. Rather than acknowledge that approval of E15 for use in 2001 and newer vehicles was premature, before all necessary research was done, both EPA and DOE instead attack the research and the researchers.

“There’s a fairly significant, long-standing relationship between spare production capacity in OPEC and what the pricing environment is for oil. So the 2 million barrel per day  increase in U.S. oil production that surprisingly took place over the last five years has resulted in higher OPEC spare capacity, and undoubtedly, has been a factor in why Brent oil prices are $103-$104/bbl rather than $125-$130/bbl.”

In other words, the head of the federal agency that analyzes energy data says the recent growth in U.S. production has helped reduce the price of Brent crude, a leading global benchmark, by about $25 a barrel. That’s big, because the cost of crude oil is the single biggest factor in the price of gasoline, as this infographic shows:

Sieminski refers to the impact on the global crude market of growing U.S. oil production, which rose to 6.5 million bbl last year, compared to 5 million bbl in 2008. Sieminski said OPEC spare capacity “is a function of what demand is globally and what supply is outside of OPEC, with OPEC then filling in.” More U.S. production means more global supply outside OPEC, bolstering OPEC spare capacity and exerting downward pressure on global crude prices.

Another takeaway from Sieminski that’s as important: Continued growth in U.S. oil production could impact the global crude market even further. Breaking Energy reports:

If the agency’s high resource case for liquids production were to come to fruition, the US could be a net exporter of oil sometime in the 2034-2035 timeframe, and “oil prices themselves could be a lot lower than EIA’s reference case forecast, which has prices out in the year 2040 up close to $160/bbl,” (Sieminski) said.

First – thanks, fracking. The combination of hydraulic fracturing and horizontal drilling techniques, plus advances in the use of them, is unlocking vast U.S. reserves of natural gas and tight oil – from shale and other tight rock formations. Recently, the International Energy Agency said U.S. oil production would be the main driver of global supply growth over the next five years. At the IHS CERAWeek conference earlier this year, Sieminski suggested U.S. oil output is growing so fast a number of past EIA production projections were obsolete.

The challenge is to build on that growth by increasing access to U.S. reserves, onshore and offshore – where 87 percent of federal acreage remains off-limits to development. With greater access to federally controlled areas we will see more production gains, increased job creation and more revenue generated for government – while exerting downward pressure on the global crude oil market. Good things all.

Sean Hackbarth notes  Keystone XL pipeline developments this week: The House Transportation Committee advanced  a bill that would allow construction of the full pipeline – the third congressional committee to do so; Canadian Prime Minister Stephen Harper was in New York City touting  the project’s benefits  for both the U.S. and Canada; and a small business owner in Maryland told the president that businesses like his  would get a boost from the project.

The Hill – DOE Approves Natural Gas Export Project

A Texas LNG  facility has the green light from DOE  for exports to non-free trade nations. DOE noted that project opponents “have not demonstrated that the requested authorization would be inconsistent with the public interest.”

The Sunday Dispatch – Marcellus Shale Helps Rural Hospital Become Cutting-Edge

Thanks to support from local oil and natural gas companies in the Marcellus Shale region, one hospital gained funding needed to expand the facility – nearly doubling its square footage  and adding new technology to assist patients.

NJ.com – Increased Natural Gas Production Holds Great Benefits for Consumers, Environment

Who will gain  from increased natural gas production? Responding to an article critical of natural gas development,  former Pennsylvania Department of Environmental Protection Secretary Michael Krancer argues  that continued hydraulic fracturing will have broad benefits for consumers and won’t endanger the environment.

Philly.com - $1 Million in Shale Money Coming to Philadelphia Region

The Pennsylvania Department of Environmental Protection awarded $6.7 million in grants this week to 18 organizations. The grants are funded  bythe $206 million in   impact fees from energy development in the Marcellus Shael.

Certainly, BLM’s aim with this rule, compared to a previous version, was to take hydraulic fracturing regulation in a better direction – acknowledging the role of the states and measures including FracFocus.org, the online fracking fluid registry. And it appears BLM has done that to some degree. Yet, the executive summary in BLM’s rule announcement and request for public comment suggests BLM itself is concerned about duplication, additional layers and potential additional delays to oil and natural gas development (emphasis added):

The BLM developed this revised proposed rule and the initial proposed rule with the intention of improving public awareness and strengthening oversight of hydraulic  fracturing operations without introducing unnecessary new procedures or delays in the process of developing oil and gas resources on public and Indian lands.

And later on:

The BLM has revised the proposed rule to reduce some of the information requirements to avoid duplication with the requirements of States (on Federal land) and tribes (on tribal land).

And still later:

The BLM will work with States and tribes to establish formal agreements that will leverage the strengths of partnerships, and reduce duplication of efforts for agencies and operators, particularly in implementing the revised proposed rule as consistently as possible with State or tribal regulations.

The question, then, is why try to create an additional regulatory regime where strong state regimes already exist – tailored by them to address the specific conditions of their individual geology, hydrology and other characteristics?

API’s Erik Milito, director of upstream and industry operations:

“States have led the way in regulating hydraulic fracturing operations while protecting communities and the environment for decades. While changes to the proposed rule attempt to better acknowledge the state role, BLM has yet to answer the question why BLM is moving forward with these requirements in the first place.”

Indeed, BLM acknowledges the key role played by FracFocus.org, which provides specific, well-by-well details on the chemicals used in fracking across the country. Again, as indicated in the passages above, the agency also acknowledges the hard work the states have done to make oil and natural gas development as safe and clean as possible – to be expected since the states have a deep interest in protecting the local environment.

More on BLM’s proposal to come, but the point worth underscoring is this: America’s oil and natural gas wealth in shale and other tight-rock formations is a game-changer in terms of energy security, jobs and economic growth, thanks largely to hydraulic fracturing. With production in federal areas currently lagging because of federal leasing and permitting policies, imposing additional regulatory layers and processes on top of effective state regulatory regimes is not the way to increase production in federal areas. Milito:

“The production of oil and natural gas from shale and tight sand formations is the most significant development in U.S. energy in generations. Confusing the regulatory system would stand in way of economic growth, job creation and the opportunity to generate billions in revenue for federal, state and local governments.”

"Our results show no discernible impairment of groundwater quality in areas associated with natural gas drilling and hydraulic fracturing. … Only a fraction of the groundwater samples we collected contained dissolved methane, mostly in low concentrations, and the isotopic fingerprint of the carbon in the methane in our samples was different from the carbon in deep shale gas in all but two cases.” – Avner Vengosh, professor of geochemistry and water quality at Duke's Nicholas School of the Environment

"These findings demonstrate that shale gas development, at least in this area, has been done without negatively impacting drinking water resources." – Nathaniel R. Warner, Duke PhD student and study lead author

In the study, whose findings parallel those in a USGS report issued earlier this year, scientists sampled 127 shallow drinking water wells in near Fayetteville Shale natural gas production areas in north-central Arkansas. The samples were analyzed for major and trace elements and hydrocarbons, and used isotropic tracers to identify the sources of possible contaminants. Scientists compared the chemical makeup of the contaminants to those found in water and natural gas samples from nearby shale drilling sites, and determined that methane found was produced primarily by biological activity in the region’s shallow aquifers and not by shale natural gas contamination.

Vengosh said drilling practices and wellbore integrity play a role in preventing or allowing natural gas leakage into shallow aquifers from drilling sites – which, again, the Duke-USGS study did not find in Arkansas. Vengosh:

"The take-home message is that regardless of the location, systematic monitoring of geochemical and isotopic tracers is necessary for assessing possible groundwater contamination.”

The findings are quite important – especially in the large public conversation on hydraulic fracturing, our vast shale wealth and what they could mean for our country. Opponents of natural gas and hydraulic fracturing often claim fracking is contaminating water sources – even though Lisa Jackson, who stepped down as EPA administrator earlier this year, said a number of times (see here and here) that her agency knew of no such occurrence.

The researchers are correct: Safe and responsible development of natural gas through hydraulic fracturing depends on sound standards and technical skill in applying them during drilling and production. Strong state regulatory regimes – which result from professional competence, experience and industry cooperation – are effectively overseeing development (something else Jackson acknowledged), making the process safer and cleaner – as the Arkansas study certainly suggests.

Industry is working hard to do its part. As the ad below (shot in Arkansas) shows, community buy-in is essential for energy development:

It’s about conversation – listening and responding. The result is a partnership that produces jobs, economic growth broader than just the industrial activity itself, and the energy that powers our modern lives.

U.S. tight oil production has helped to shave about $20-$25 per barrel from Brent crude oil prices, and continued output growth could  further impact global pricing, says  Energy Information Administration Administrator Adam Sieminski.

E! Science News – Groundwater Unaffected by Shale Gas Production in Arkansas

Duke University and U.S. Geological Survey scientists sampled 127 shallow drinking water wells in areas overlying Fayetteville Shale gas production in north-central Arkansas and found no ground water contamination from hydraulic fracturing.

AEI Ideas/Carpe Diem Blog – North Dakota Sets New Oil Production Record in March

Mark J. Perry writes that March was another record-setting month for oil output in North “Saudi” Dakota, and the shale oil boom there continues to make it one of the most economically successful states in America.

Forbes – America’s Manufacturing Boomtowns

Leading the way is Houston. Since 2009 the city’s industrial employment has grown 15 percent, almost three times as fast as the overall economy. This energy-driven growth is also seen in other sectors: construction and professional and business services.

The Hill – Consumers, Economy and Environment Lose with Renewable Fuel Standard

In an opinion piece, the American Fuel and Petrochemical Manufacturers’ Charles Drevna writes that because of the standard “American food producers and retailers are being hit hard, and these costs are passed along to consumers who have seen an 18 percent rise in food prices since the RFS was enacted.”

Wall Street Journal – What the Well-Dressed Fracker is Wearing

WSJ has a piece today on the way  hydraulic fracturing is benefitting retailers and clothing manufacturers. These businesses are seeing an increase in demand for shoes and fire-resistant clothing for workers in the oil and natural gas industry.

Jobs – Average net growth is projected to range from 73,100 to 452,300 between 2016 and 2035.

ICF:

This wide estimated range reflects the fact that the net job impacts will depend, in part, on how much “slack” there is in the economy and how much the demand for LNG-export-related labor will “crowd out” other labor demands. Manufacturing job gains average between 7,800 and 76,800 net jobs between 2016 and 2035, including 1,700-11,400 net job gains in the specific manufacturing sectors that include refining, petrochemicals, and chemicals.

Economic Growth – Net effect on U.S. GDP is projected to range from $15.6 billion a year to $73.6 billion by 2035.

ICF’s GDP projection includes the impacts of additional hydrocarbon liquids that would be produced along with the natural gas, greater petrochemical production using more natural gas liquids feedstocks and all economic multipliers.

Government Revenue – LNG exports are projected to produce annual increases in revenue to federal, state and local governments of between $6.4 billion to $9.3 billion in the base scenario to $27.9 billion to $40.4 billion in the high-export scenario by 2035. ICF:

Increased government revenues resulting from LNG exports are expected to be in the form of federal, state, and local taxes on GDP gains associated with additional economic activity, as well as additional royalty payments to the government for natural gas production taking place on government lands. State and local taxes (which include severance taxes associated with natural gas production) comprise the largest share of government revenues, with federal taxes making up a smaller portion. A slight increase in federal royalties is anticipated to comprise the remaining source.

The report’s lead author, Harry Vidas, says the findings confirm key portions of a study done for the Energy Department by NERA Economic Consulting that was released late last year – that LNG exports would have a net positive effect on the U.S. economy and that the bigger the level of U.S. exports, the bigger the resulting benefits. Vidas said ICF’s analysis indicated job growth would be real, not existing workers simply swapping one energy-sector job for another.

ICF studied the impacts of export scenarios ranging from 4 billion cubic feet per day to 16 bcfd – if not limited by government regulation. ICF projects that U.S. LNG exports could have 12 to 28 percent market share of new LNG contract volumes in 2025 and 8 to 25 percent in 2035.

The caveat about government regulation is key. The Energy Department is reviewing federal permit applications for 20 U.S. LNG export facilities. Thanks to America’s vast shale deposits and hydraulic fracturing, we have ample supplies of natural gas to support domestic needs as well as demand from allies overseas. But competition in the global LNG market is developing. Government shouldn’t pick winners and losers here. Rather, it should approve valid export applications and let the market make its determinations. The ICF report suggests that continued delay in considering these applications means delaying significant benefits to U.S. workers and our economy. API President and CEO Jack Gerard:

“Increasing LNG exports is clearly in our national interest and will help the U.S. reach the president’s goal to double U.S. exports. The industry is ready to invest in American infrastructure to create jobs and produce more domestic energy as soon as the Department of Energy moves forward with the approval of LNG export applications. Timely approval of LNG exports is crucial if we want to be competitive with international projects rushing to be first to market. Allowing the export of LNG would mean more jobs, growth in U.S. GDP, and less debt – key priorities of the American people."

In a guest column, former Department of Labor Chief Economist Diana Furchtgott-Roth discusses the opportunities hydraulic fracturing could bring to New York state. “Using the Pennsylvania data to project fracking's effect on New York counties, I find that the incomes of those who live in the 28 New York counties above the Marcellus Shale have the potential to expand by as much as 15 percent over the next four years -- if the state's moratorium is lifted.”

National Journal – Natural Gas Exports Loom Large Over Washington

NJ’s Amy Harder takes a look at the liquefied natural gas debate after a visit to Dominion’s Cove Point, Md., facility – a former import terminal waiting for federal approval to add  export capabilities.

NPR – Huge Boost in U.S. Oil Output Set to Transform Global Market

"U.S. shale oil will help meet most of the world's new oil needs in the next five years, even if demand rises from a pick-up in the global economy," the International Energy Agency predicted Tuesday. The rise in North American supply is largely due to a rise in U.S. natural gas development through hydraulic fracturing.

Bloomberg Businessweek – U.S. Boom Transforming Global Oil Trade

U.S. petroleum imports have fallen  22 percent since hitting a record in the middle of the last decade, writes BW. Thanks to a surge in oil production in the U.S. and shrinking oil consumption in the developed world.

KRISTV.com – Shale-Related Jobs Expected to Double in Texas’ Nueces County

The total revenue the Eagle Ford Shale brought Nueces County in 2012 was $8.5 billion, and experts project that number will climb to $19.8 billion by 2022. KRISTV’s report details  the benefits of shale development on the local economy.

“When it comes to energy, not only have we been able to double our production of clean energy, but even in terms of traditional energy, we will probably be a net exporter of natural gas in somewhere between five and ten years.  And so the idea of the United States being energy independent – which seemed far-fetched as recently as 10 years ago – now is actually a possibility.”

As well as those from Texas earlier this month, where he talked about job creation and driving economic momentum:

“… we've got to make America a magnet for good jobs. … And even as we’re working to reverse the trend of communities that have been hard hit with old manufacturing leaving, we’ve got to propose partnerships with local leaders in manufacturing communities to help attract new investment in the infrastructure and the research that will attract new jobs and new businesses, so that communities that have been knocked down can get back up and get back on their feet. And we’re poised for a time of progress – if we’re willing to seize it. … American energy is booming.  But we’ve got to keep moving forward, and we’ve got to make sure that Washington is not administering self-inflicted wounds when we’re making progress.”

There’s a nexus between energy, jobs and moving forward. It’s the Keystone XL pipeline.

The president is right: We shouldn’t administer self-inflicted wounds in the midst of progress. America is experiencing an oil and natural gas renaissance – thanks to the game-changing development of vast shale reserves with hydraulic fracturing and horizontal drilling.

Abundant supplies of natural gas could support our domestic needs as well as demand from friends overseas. Meanwhile, the International Energy Agency said this week that U.S. oil production will be the main driver of global supply growth over the next five years.

Sustaining this energy boom hinges on access to U.S. reserves, smart regulatory oversight that doesn’t unnecessarily chill investment and development and visionary leadership that sees America’s oil and natural gas wealth as the key to our energy security.

The Keystone XL pipeline is a critical, available piece of an all-of-the-above energy strategy because it will put Americans to work, help grow our economy and strengthen our partnership with our largest source of imported oil, Canada. Yet, the full pipeline project remains on hold while the administration works its way through another review – extending a process that has taken more than four years. In terms of energy, shovel-ready infrastructure, jobs and economic growth, delaying approval of the Keystone XL is the definition of a self-inflicted wound.

Here’s what’s being delayed, according to the most recent State Department analysis:

• 42,100 average annual jobs across the United States over the pipeline’s one- to two-year construction period.
• $2.05 billion in employment earnings.
• $3.3 billion in direct spending on construction and materials.
• $65 million in short-term revenues for government from sales and use taxes in states that levy them.

Check out this video that describes the kind of broad economic impact the pipeline already is having in Cushing, Okla., where the southern leg of the project has been under way:

Americans understand the Keystone XL pipeline’s value to our economy and energy security. They’ve said so in poll after national poll:

• Pew (April 2013) – 66 percent favor the full Keystone XL’s construction.
• Rasmussen (March 2013) – 58 percent favor.
• Harris Interactive (February 2013) – 69 percent.
• Fox News (February 2012) – 67 percent.

The country is ready to get on with building the full pipeline. Further delay is delayed benefit to the country. The pipeline will bring 830,000 barrels of oil a day to U.S. refineries. Most of that will come from Canada, but about 25 percent will come from the Bakken region of the U.S.

If we build it - if the president will end the delaying and agree with ample evidence that the project is in our country’s national interest – and is a key to the economic growth he seeks.