Natural Gas

Colorado Governor John Hickenlooper testified before the Senate Energy & Natural Resources Committee on February 12th to discuss hydraulic fracturing.  The Governor was a highly qualified witness not only because Colorado is on the front lines of this issue, but also because of his background as a geologist.

The Governor cast Colorado as a leader in the Shale Revolution.  “Our goal in Colorado is to be accountable to the highest ethical and environmental standards with regulatory structure based on three principles—namely that our regulations are reasonable, scientifically based and protective of health and safety,” he wrote in his testimony.

 Click here to read the Governor’s written testimony.

Click here to watch Governor Hickenlooper’s spoken testimony.  (The hearing begins around 30:00; the Governor speaks a little after the 48:00 mark. The  President & CEO of the American Petroleum Institute, Jack Gerard, also testified, which begins  around 1:21:00.)

At the heart of his testimony was the regulatory issue—the headline in the Denver Post read “Hickenlooper argues in D.C. for state regulation of fracking.”  This is a key distinction.  The Governor believes Colorado is already providing sufficient oversight; he even called for a new $1 million study on fracking a few weeks ago. 

This is just the beginning of this debate over Colorado Energy.   Even if the Governor can avoid federal interference, opposition must be dealt with at the local level as well—most immediately in Fort Collins.  Energy Citizens can help by signing our petition to tell the Fort Collins City Council that hydraulic fracturing is safe and creates Coloradan jobs (http://energycitizens.org/ec/advocacy/fortcollins.aspx).

You can email Tara at Tara@EnergyCitizens.org

The CC image "Hickenlooper" courtesy of Aranami.

By Rebecca, Energy Citizens Ohio

In its analysis of Governor John Kasich’s budget, the Cincinnati Enquirer noted that the Governor’s severance tax hike would affect “out-of-state” producers.[1]  

It begs the question, why should Ohioans worry about the fortunes of companies that are out of state? Because that’s exactly how economic growth in any state is driven:  By convincing investors from other places to send their limited capital here.   In fact, it has been coming in droves—just take two examples that have been in the headlines recently:

• Oklahoma City-based Gulfport Energy just invested $220 million to purchase 22,000 acres of land from Windsor Ohio LLC.  That’s just to acquire the land—it will need to devote much more to actually extract resources from the land, and that means it will be hiring a lot of Ohio workers.
• Meanwhile, Denver-based MarkWest Energy said it will invest $1.9 billion near Cadiz to increase its processing capacity and build a network of pipelines in the area.  That means the company will hire new employees as well as creating construction jobs and jobs in the supply chain.

So why didn’t these companies just invest in Oklahoma City and Denver?  Because they believe using their capital in Ohio will provide the best possible return on their investment.

But a large severance tax hike will, of course, alter their return on investment. 

No one is claiming that these or other companies driving the Shale Revolution will pack up and leave because of the tax hike.  But we must understand that anytime overzealous taxation is allowed to diminish a company’s return on investment they will have less capital to reinvest.

That means fewer jobs created here in Ohio.  So when we talk about targeting “out of state” companies with this tax hike, Ohio isn’t any better off for it when it taxes in-state companies.  In fact, the very opposite is true.

It calls to mind that old expression:  “Don’t bite the hand that feeds you.”

Additionally, Ohioans will be affected by many related sales tax issues.  Sales tax will now be applied to Ohio attorneys, accountants, engineers, scientists, waste management and remediation services just to name a few.  Ohioans employing any of the above services will be paying a new 5.0 % tax on their services.   Ohio landowners are not spared from new taxes either.  Most landowners will pay some or all of the increased severance tax. This new tax environment is sure to make Ohio less competitive with its neighbors that truly are open for business.  

Our efforts this election year have been remarkable and effective.   Whatever you think of Tuesday’s results, all of the winners will be much more attentive to American Energy next year because of our efforts.

Over the next several weeks, however, we need to shift our focus because Congress will hold what is called a “lame duck” session.  This can be a time where unusual circumstances yield unexpected decisions affecting American Energy.

Why is it called a “lame duck”?

A lame-duck session is so called because, having been either defeated or not seeking re-election, certain Members of Congress are fundamentally weakened like a lame duck unable to keep up with its flock. 

Yet in this role—with nothing to lose—the outgoing Members can often be emboldened on pivotal votes.  

For some members, who may never have to explain their actions to the voters, they may make decisions that are not in the interests of American energy.  Compounding the matter, other Members that would ordinarily support U.S. energy may decide not to fight back. 

How long is the “lame duck” session?

Like many of us, Members of Congress look forward to the end of the session and returning home for the holidays.  That’s why the session will be fast-moving and will probably be short.   But until the last vote is cast, Congress’ job is not done.

So what can Energy Citizens do to help?

1. Write your Members of Congress and remind them that you support American energy and oppose energy tax increases.  We need them to stand strong for American Energy on Capitol Hill. [link to generic “no new energy taxes” alert on the website]
2. Return to EnergyCitizens.org regularly we will keep the blog updated with information about key energy issues in the lame-duck session of Congress.
3. Spread the word about Energy Citizens.  The election will still be fresh in the minds of many of your friends, family, and neighbors, and you’ll likely be seeing more of them thanks to the holidays.  Ask them to join Energy Citizens and write their legislators while the lame-duck session is taking place. 

Clean burning natural gas—it is being called the energy of America’s future.

Natural gas is vital for heating homes and businesses, for generating electricity, and as a fuel for transportation. It is also used to power industry, to make fertilizer, and in manufacturing—and because of its low carbon content, it is helping us reduce greenhouse gas emissions.

Natural gas is often very difficult to access. But recent technological innovations in hydraulic fracturing and horizontal drilling have dramatically altered America’s energy future—and previously unrecoverable natural gas is now one of the main ingredients in America’s energy mix.