Record-Setting Year for American Oil and Gas

Mar 4, 2013

Today in Houston, energy experts from across the globe are meeting at the annual HIS CERAWeek conference. FuelFix reports:

A lot has happened in the past year. [Conference chairman Daniel] Yergin and CERAWeek co-founder and co-chair James Rosenfield said the 2013 conference reflects that, including sessions on growing cybersecurity threats facing energy companies and facilities, the continuing boom in production from shale and other unconventional plays, and navigation of the recovering economy.

“There is a growing recognition that unconventional gas and oil is here to stay,” said Rosenfield, senior vice president at IHS. “The shift from gas to oil, and tight oil in particular, and the emphasis on liquids.”

Unconventional gas and oil from hydraulic fracturing has caused a record-setting year for American oil and gas development. The U.S. Energy Information Agency (EIA) reported that crude oil production hit a 20-year high last November and December. The American Enterprise Institute’s Mark Perry noted that if North Dakota and Texas--where much of America’s oil production growth is taking place--were its own country, it’d be the “9th largest oil-producing nation in the world.” Also, EIA noted that natural gas production set a record in 2012.

Yergin told Politico Pro the oil and gas boom has changed the energy discussion: “Energy policy for almost four decades has been dominated by the notion of scarcity. We’re not floating out in a sea of oil and gas, but there’s a sense that the U.S. position is much, much better than had been thought.”

While the U.S. is in a great position, many in Congress think it would be smart to “fix” the sequester, across-the-board spending cuts, by targeting energy producers with higher taxes. Former Mississippi governor Haley Barbour rejects this idea:

The oil and gas industry is already the highest-taxed industrial sector in the country, pumping about $86 million a day of taxes and fees into federal coffers. That’s $31 billion annually. A completely arbitrary tax hike on the energy industry would not only reduce industry growth, it would squelch job creation and pass higher energy costs along to consumers.

Instead of trying to weigh it down energy with taxes, let’s encourage American oil and gas development to create more jobs and boost economic growth.

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