US oil and gas-producing states must continue to work together to explore for and develop oil and gas resources and maximize production with a high sense of environmental awareness if they are to meet the nation"s ever-increasing energy requirements.

This was one of the main messages voiced by members of the Interstate Oil & Gas Compact Commission May 7 at the start of its midyear issues summit in Point Clear, Ala.

 

Speakers at IOGCC"s first general session agreed that maximizing US oil and gas production in an environmentally sound way should not, and don"t have to be mutually exclusive goals.

 

North Dakota Gov. John Hoeven, current IOGCC chairman, said the US must seize opportunities now to increase oil and gas production. "It"s going to take all of these sources of energy, and more" to fuel the US in the future, he said.

 

Hoeven also stressed the need for optimism in looking at the current state of US oil and gas production—seeing the glass as half-full, rather than half-empty. The US still produces about 40% of its oil domestically, he said, and it produces about 85% of its natural gas. He said the largest exporter of crude into the US remains Canada and the other 15% of natural gas comes from "friendly" sources.

 

Maximizing efficiency

Michael Ming, president of Research Partnership to Secure Energy for America (RPSEA), said increasingly advanced technologies will be required to increase oil and gas production in the US. He emphasized the importance of the role that US states play in the nation"s energy future. "The states hold a lot of cards right now," he said.

 

RPSEA is a nonprofit corporation composed of a consortium of US entities, including industry, government, academia, and national laboratories. Its mission is to provide a role in ensuring focused research, development, and deployment of safe and environmentally sensitive technology that can effectively deliver hydrocarbons from domestic resources.

 

Ming said at the consumption end of the oil supply chain, US states must continue to invest in research and development to find ways to maximize energy efficiency. In most cases, Ming said, energy use in the US is about 45% efficient. In the transportation sector alone, he said, energy efficiency is about 17%. Even the true efficiency of transporting one"s self in a car is a mere 1%.

 

"The potential is high to increase the end-use efficiency of our supplies," Ming said, adding that efficiency leverages all forms of supply—renewable resources as well as conventional ones.

 

Ming said the US uses about 20 million b/d of oil and 22 tcf/year of gas. Of this, the US wastes up to two-thirds with energy inefficiency. Also, the US imports about two thirds of its oil.

 

Currently, the energy resource base of the US is in a state of transition, Ming explained. Resources that may be easy to find are increasingly difficult to produce, citing the Barnett shale play and production from the ultradeep water as examples. Ming equated the complexity and difficulty of ultradeepwater development with traveling to Mars.

 

Independents" role

Speaking on the challenges of the 110th US Congress and its decisions" effect on US independent producers was Michael Linn, president of the Independent Petroleum Association of America and chairman, president, and chief executive of Linn Energy LLC, Houston. Linn noted that while addressing global climate change through mitigating emissions of carbon dioxide was "admirable," the solution would need to come from a worldwide perspective. Developing countries such as China and India should have to be as involved in the solution as the US.

 

Linn said development of alternative forms of energy is also vital and suggests using natural gas as a primary "buffer" source of energy while developing these other sources.

 

Linn also stressed that Congress should not pass any more legislation that would hurt US independent producers and their search for oil and gas. Linn said gaining access to areas now off limits to exploration and production, such as off Florida and the East and West coasts, also remains something in the forefront of the political agenda of IPAA and its members.

 

PIN/OGJ.COM

News Code 104072

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