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Creating a Safe and Sustainable Energy Future
Industry Outlook
a report by
Barry Russell
President and CEO, Independent Petroleum Association of America (IPAA)
The debate over energy supply and prices in the US may have just Sabato’s point is supported by the combination of a Fox News poll
become an honest public discussion. There has been a change in showing that 75% of Americans support immediately increasing oil
attitude in the US, and the voice of an industry is finally being heard. drilling in the US and a Quinnipiac poll reporting that 87% back
At the start of 2008, it was thought that oil reaching (and passing) government funds for renewable energy such as wind and solar
the US$100 per barrel mark would be a significant catalyst for power. This is a demonstration that Americans understand the need
opinion and policy change, but instead it seems that the most for balance in our energy supply, a point that underlies the absurdity
significant number in the US this year has been gasoline reaching a of pitting our resources against each other for political purposes.
national average of US$4 per gallon. How far that goes to creating
a sustainable energy policy remains to be seen. While diversity in fuel supply is critical to America’s energy future, by
2030 oil and natural gas are still projected to account for more than
Shortly after gasoline reaching the US$4/gallon mark, not only were 60% of America’s total energy mix. Our reserves in America’s Outer
Americans beginning to check their fuel consumption, but also their Continental Shelf hold approximately 77 billion barrels of oil and
attitudes towards energy supplies began to change. According to a more than 420 trillion cubic feet of natural gas. That is enough oil
recent Rasmussen poll, 81% of Americans see the development of and natural gas to heat 100 million homes for the next 60 years, but
new energy sources as an urgent priority, and a Quinnipiac survey we must be sure our ability to produce these resources is not
showed that 62% are in favour of offshore drilling. It is clear that the handicapped for the sake of renewables, even as we look to the
American public is beginning to understand the issue. The US is in future for new and sustainable sources of energy.
dire need of a new, proactive energy policy. However, despite this,
there remains political talk of windfall profits taxes and the There has also been increasing recognition of the environmental
continued restriction of access and finances from an industry that responsibility that is valued and practised by the industry. Hurricanes
needs to provide both energy and energy security to a nation that Katrina and Rita, two of the most powerful and destructive storms in
risks losing both to unstable international suppliers. decades, ripped through the offshore oil rigs in the Gulf of Mexico,
rendering many of the rigs inoperable. However, not a drop of oil
With a major election fast approaching, the American oil and gas from the rigs was spilled. Battered by category three and four
industry is bracing itself for some creative political manoeuvring and hurricanes, those rigs kept the oil in the ground. It is a testament to
difficult legislative battles. The subject of energy has become a the technology that the industry has provided and the importance of
regular on the presidential campaign trail. Once the dust settles, setting both the environment and our energy needs as equal
Americans are almost sure to see a new energy policy. It is an issue priorities. The word is spreading; technology has advanced and
of more consequence than perhaps any other facing the nation, with energy exploration is cheaper, safer and cleaner than ever before.
no other group better prepared to face the next set of challenges
than independent oil and gas producers. Currently, the American Despite the changes in public perception, major components of
public seems to appreciate the importance of their domestic America’s natural energy supply remains unfamiliar to most and
resources, a reality that could have serious political consequences. perhaps misunderstood to others. While offshore drilling has
“Just blaming ‘big oil’ does not work anymore,” says Larry Sabato, received the most attention in the debate on expanded exploration
Director of the Centre for Politics at the University of Virginia. and access, oil shale deserves a closer look.
“People have absorbed the fact that it is a real crisis, and it will take
complicated solutions to solve it.” It is estimated that there is the equivalent of over 1.5 trillion barrels
of oil in Midwest shale reserves stretching over parts of Colorado,
Utah and Wyoming. Concern has risen in the past about the scope
Barry Russell is President and Chief Executive Officer
and economic feasibility of extracting and producing these reserves,
(CEO) of the Independent Petroleum Association of
America (IPAA). He serves on the Board of the IPAA
although with expanding technology if even half of this reserve
Educational Foundation, the Business Industry Political
became available, it would still be twice as large as the historic Saudi
Action Committe and the National Energy Education
Development Project. He began his career in the
oil fields.
Environmental Protection Agency’s (EPA) Office of
General Counsel and Enforcement, where he represented
Leading the way, independent oil and gas companies have already
the EPA in civil and criminal actions against some of the
nation’s largest utilities and industrial concerns. Prior to joining IPAA, Mr Russell worked
begun investing in methods to make oil shale extraction more efficient.
for several management consulting firms including Booz, Allen and Hamilton. During this
Considering the complications involved in bringing some alternative
period, he specialised in mergers, acquisitions and corporate turnaround assignments,
serving as the CEO of companies that were near bankruptcy.
fuel sources online, oil shale deposits are fortunate to be located in an
area that already contains mining and transportation infrastructure.
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© TOUCH BRIEFINGS 2008
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