What To Look For From The President This Week

The White House announced today that President Obama will pivot this week from ongoing efforts in the Middle East to focus his energy, well, on energy. Tomorrow, as the Wall Street Journal reports, “President Barack Obama will outline a plan for America’s energy security on Wednesday [at Georgetown University].

This too from “The President will visit a UPS shipping facility in Landover, MD where he will view vehicles from AT&T, FedEx, PepsiCo, UPS and Verizon’s clean fleets and deliver remarks to the companies’ employees.” No word if Daniel Snyder has received a formal invite yet.

Many of these “clean fleet” vehicles are certainly powered by cleaner-burning, American natural gas. And the president, for his part, and his administration, have been mostly supportive of shale gas production, which is performed overwhelmingly by smaller, independent producers here in America. This from his January 25 State of the Union Address:

Some folks want wind and solar.  Others want nuclear, clean coal and natural gas.  To meet this goal, we will need them all — and I urge Democrats and Republicans to work together to make it happen.

You see, the United States is uniquely positioned to continue to be a global leader in natural gas producing — we have roughly a 100 year supply available. But misguided regulatory and legislative threats persist in Washington that could dramatically and unnecessarily thwart this production, which is helping to stabilize energy prices for struggling American consumers, driving down our dangerous dependence on unstable region’s of the world to fuel our economy and creating tens of thousands of good-paying, blue-collar jobs at a time when they’re most needed.

Hydraulic fracturing – a 60 year old oil and natural gas stimulation technology – remains at the core of this debate. Without this tightly-regulated and environmentally proven process, that abundant, 100 year supply of domestic, job-creating natural gas, as well as hundreds of millions of barrels of American oil, would remain out of reach.

The fact remains that individual energy-producing states close, ably and aggressively regulate well-casing standards and therefore fracturing and other completions technologies. So closely, ably and aggressively that fracturing has never impacted groundwater – but has been used to enhance American oil and natural gas production more than 1.1 million times.

Some in Washington, nonetheless, are seeking to fundamentally rewrite longstanding federal law with the goal of stripping individual states – and their highly-skilled technical experts – of their ability to ensure that fracturing is done safely. The impact could be devastating, both economically and from an energy security standpoint.

In a speech last week, Louisiana Oil and Gas Association president Don Briggs said this about this about these misguided, ‘Washington-knows-best’ efforts:

Briggs said the natural gas market is “coming on strong,” but there are some attempts to have the process of hydraulic fracturing controlled by the federal Environmental Protection Agency. Currently, each state oversees the process.

If the EPA controls hydraulic fracturing … then all you have to do is have one operator somewhere make a mistake, and they will shut down all exploration,” Briggs said.

President Obama’s central focus is on stimulating economic recovery and helping America emerge a stronger and more prosperous nation,” reads the White House’s ‘Guiding Principles’, adding this: “President Obama’s first priority in confronting the economic crisis is to put Americans back to work.” Well, Mr. President, look no further than American independent oil and natural gas producers, who are helping to create tens of thousands of jobs. These jobs, however, are tied directly to hydraulic fracturing.

At A Glance: Hydraulic Fracturing-Related Economic Impacts

  • More than 48,000 New Pennsylvania Jobs: Natural gas has potential benefits beyond being a cleaner burning fuel. A Pennsylvania State University study said gas exploration created 29,000 jobs and added $240 million to state and local tax coffers in 2008. Revenue was expected to grow the following year, producing an economic output of nearly $4 billion, yielding $400 million in state and local taxes and creating more than 48,000 jobs. The value of additional state and local taxes from gas between 2009 and 2020 would top $12 billion, the study said. (Washington Post, 3/27/11)
  • Hydraulic Fracturing Creating Wealth in Blue-Collar, Lousiana Community: Three years after a massive natural gas strike under this blue-collar cattle-and-timber parish turned unsuspecting farmers, clerks and retirees into millionaires and filled public treasuries to overflowing, the storybook fountain of mineral wealth has slackened, but hasn’t quitA flush of prosperity has come to rural northwest Louisiana, if somewhat unevenly. And not always with the results an outsider might have guessed. Energy companies’ stampede to lease every available acre of woods and pasture to drill for gas is long past. It’s old news how even modest landowners collected six- and seven-figure bonus checks, and later four-and five-figure monthly royalty checks. (Times-Picayune, 3/27/11)
  • Sen. Joe Manchin Says Shale Production of “Vital Importance For Jobs, Economy” of W.Va.: Responsible Marcellus Shale production, hydraulic fracturing “of vital importance for the jobs, for the economy of West Virginia. And I would like to see the urgency put towards that.” (West Virginia MetroNews, 3/27/11)
  • Responsible Development of S. Texas Oil, Natural Gas “Good News”: An American company is using American workers to build innovative products to develop American oilfields on land owned by Americans to make America less dependant on foreign oil producers. That is the type of good news and big economic news that we need to be hearing about more. Just like the oil reserves, the good news is out there, we just need the editors to be asking the reporters to dig a little deeper past the surface to get down to it. (Culpeper (VA) Star Exponent Op-Ed, 3/29/11)
  • Government shouldn’t stand in the way of natural gas production”: Natural gas is an environmentally friendly, cost-efficient source of energy that provides 4 million jobs in America and has the potential to provide many more. Its ability to create employment opportunities while reducing America’s reliance on foreign energy has been substantially enhanced by improvements in a process called hydraulic fracturing. (Gaston (NC) Gazette LTE, 3/27/11)
  • Marcellus shale boom offers Alle-Kiski Valley job opportunities”: Kurtis Fish is only 20 years old and he’s already making $80,000 per year. Same goes for his 24-year-old brother, Ronald Severin. The brothers, who completed a Marcellus shale training gas well drilling program at Westmoreland County Community College in September, work as chainhands on a Marcellus rig in Northeastern Pennsylvania. … Within the next three years, thousands of new Marcellus shale jobs are expected to join the region’s work force. That means Fish and Severin’s story will likely begin to echo. (Valley News (PA) Dispatch, 3/27/11)
  • “Explosion of new wealth”: The result of the sudden development of the Haynesville field has been an explosion of new wealth in the Shreveport area and a promise of long-term tax revenue for state coffers. “The amount of money pumped into the economy from this thing is really pretty extraordinary,” said Loren Scott, emeritus professor of economics at LSU. In a report released this month, Scott said the Haynesville shale led to $6.3 billion in business sales and household earnings, 32,742 jobs, and $80.6 million in local taxes and $68.8 million in state taxes in 2009. A year later, the numbers had skyrocked to $16.3 billion in business sales and household earnings, 57,637 jobs, and $338.8 million in local and $573.5 million in state taxes. In fact, the boom essentially nullified the expected effects of the recession in the Shreveport area in 2008 and 2009, and offset the recession’s effects statewide, Scott found. “In 2009, the state lost 2 percent of its jobs,” he said. “We estimate that if we hadn’t had the shale boom, we would have lost 5 percent.” (Times-Picayune, 3/27/11)

At a conference yesterday, according the Wall Street Journal, Polish Prime Minister Donald Tusk said this about shale gas development in his country: “The fruits of this debate will be what’s priceless: a feeling of security and a hope for the future for millions of people.”

President Obama has an opportunity to demonstrate real leadership on the issue of responsibly developing job-creating American oil and natural gas this week, just as Prime Minister Tusk and a host of other world leaders have in their countries. In fact, this production is “helping America emerge a stronger and more prosperous nation.”

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