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Bruce Vincent IPAA Chairman The New Realities of American Energy Policy Independent Petroleum Association of America

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New Realities - Energy Policy <ul><li>Everything is on the table…and always will be </li></ul><ul><li>Extreme polarization </li></ul><ul><li>Green everything </li></ul><ul><li>Globalization of political environment and energy markets </li></ul><ul><li>New Communities </li></ul>

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Battle for Public Opinion <ul><li>Operations in new areas pose new concerns </li></ul><ul><ul><li>Community education about oil and gas production is essential </li></ul></ul><ul><ul><ul><li>Continuous process </li></ul></ul></ul><ul><ul><li>Partnerships with local and state regulators </li></ul></ul><ul><ul><ul><li>Many communities are not prepared to manage a significant increase in oil and gas development efficiently </li></ul></ul></ul>

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Battle for Public Opinion <ul><ul><li>False rumors about the industry must be dispelled </li></ul></ul><ul><ul><ul><li>Early and often </li></ul></ul></ul><ul><ul><li>New reality of asset base requires being a member of the community </li></ul></ul><ul><ul><ul><li>Visible civic presence & long term commitment to communities </li></ul></ul></ul><ul><ul><ul><li>Employ local workers </li></ul></ul></ul><ul><ul><ul><li>Field offices </li></ul></ul></ul>

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<ul><li>2011 Policy Issues </li></ul><ul><li>Why It’s Important </li></ul><ul><li>What Can You Do About It </li></ul>New Realities – Energy Policy

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Key Policy Issues in 2011 <ul><li>Energy taxes </li></ul><ul><li>Hydraulic fracturing </li></ul><ul><li>Offshore policy </li></ul><ul><li>Regulatory challenges </li></ul>

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Energy Taxes <ul><li>Renewed calls for billions in tax increases on oil, gas producers </li></ul><ul><li>For independent producers, primary targets are drilling costs and percentage depletion </li></ul><ul><li>Not subsidies </li></ul><ul><li>Deficit reduction issue could trigger debate on restructuring the entire tax code </li></ul>

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Hydraulic Fracturing <ul><li>Federal regulation / EPA study </li></ul><ul><li>Anti-development groups now targeting wastewater discharge procedures </li></ul><ul><li>Increasingly targeted by the media: GasLand documentary / New York Times </li></ul><ul><li>Energy In Depth Coalition www.EnergyInDepth.org </li></ul><ul><li>GWPC / IOGCC Frac Fluid Registry Site (April 11 th ) </li></ul>

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Offshore Policy <ul><li>Seven permits issued in March for deepwater Gulf of Mexico </li></ul><ul><li>Streamline permit process </li></ul><ul><li>Liability cap legislation </li></ul><ul><li>Getting industry back to work </li></ul>

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Regulatory Challenges <ul><li>Federal enforcement initiatives: </li></ul><ul><ul><li>Climate change </li></ul></ul><ul><ul><li>Stormwater permitting </li></ul></ul><ul><ul><li>Offshore and onshore permitting </li></ul></ul><ul><ul><li>“ Wild Lands” program </li></ul></ul><ul><ul><li>Financial reform </li></ul></ul>

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DOI & Bureau of Ocean Energy Management, Regulation and Enforcement <ul><ul><li>Permitting issues for shallow and deep waters </li></ul></ul><ul><ul><li>Agency-wide ban on the use of categorical exclusions </li></ul></ul><ul><ul><li>New Endangered Species Act designations could create uncertainty </li></ul></ul>

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Environmental Protection Agency <ul><ul><li>Revising Clean Water Act permitting guidelines </li></ul></ul><ul><ul><li>Implementing new SPCC regulations </li></ul></ul><ul><ul><li>Revising stormwater management regulations </li></ul></ul><ul><ul><li>Reworking ozone standard and implementing GHG regulations </li></ul></ul>

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Commodity Futures Trading Commission <ul><ul><li>Developing regulations on commodity markets that will impact the availability and cost of hedging </li></ul></ul>

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<ul><li>2011 Policy Issues </li></ul><ul><li>Why It’s Important </li></ul><ul><li>What Can You Do About It </li></ul>New Realities – Energy Policy

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Strong U.S. Oil and Gas Industry = Strong American Economy <ul><li>Thousands of independent producers, located in more than 30 states </li></ul><ul><li>Independents drill 95% of the wells in the U.S. </li></ul><ul><li>Produce 85% of American natural gas </li></ul><ul><li>Produce 54% of American oil </li></ul>*Source: I H S Global Insight

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Strong U.S. Oil and Gas Industry = Strong American Economy <ul><li>More than 7% of America’s GDP is contributed by the U.S. oil and gas industry </li></ul><ul><li>9.2 million American jobs are supported directly and indirectly by the industry </li></ul><ul><li>Oil & Gas revenues second largest source to U.S. Treasury </li></ul><ul><ul><li>$18.1 billion in severance taxes in 2009 </li></ul></ul><ul><ul><li>$ 6.5 billion in royalties in 2009 </li></ul></ul>

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Telling Our Story….. A New Paradigm Shift in U.S. Energy Supply <ul><li>Technological Advancements </li></ul><ul><li>New Economics </li></ul><ul><li>American Treasure </li></ul><ul><li>Increased Revenues </li></ul><ul><li>Job Creation </li></ul><ul><li>Reduced Dependence </li></ul><ul><li>Improved Balance of Trade </li></ul><ul><li>National Security </li></ul>

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<ul><li>2011 Policy Issues </li></ul><ul><li>Why It’s Important </li></ul><ul><li>What Can You Do About It </li></ul>New Realities – Energy Policy

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Get Involved! <ul><li>Educate freshmen and veteran members of Congress on both sides of the aisle in their home districts </li></ul><ul><li>Educate Administration officials </li></ul><ul><li>Educate the public so they make energy a national priority </li></ul>

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Thank You! Independent Petroleum Association of America