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Congressmen launch effort to highlight energy, jobs
Washington,
May 24 -
Mella McEwen
Members of Congress, specifically members of the House Energy Action Team, spread out across the country Thursday to highlight the importance of energy and the jobs created by energy companies.
Congressman Mike Conaway, who represents Midland, came to the Permian Basin, bringing with him fellow Congressmen Francisco "Quico" Canseco, Doc Hastings and Randy Neugebauer, of Lubbock. After touring a drilling rig and watching a hydraulic fracturing job in Upton County, they met with representatives of the oil and gas and agriculture industries to discuss energy-related issues.
"This is an important day for the country," said Canseco, whose San Antonio district includes a portion of the Permian Basin but also South Texas, where the Eagle Ford Shale play is transforming what he called traditionally impoverished counties. "What we're doing today is highlighting the importance of energy, not just its production, but its consumption, the growth of businesses, our economy and jobs."
Dunes sagebrush lizard
"I'm going to address the reptile in the room and start with the Endangered Species Act. What will happen with the act in our region?" asked Grant Billingsley, director of the Scharbauer Foundation and moderator of the roundtable discussion.
Hastings, a Republican from Washington State and chairman of the House Natural Resources Committee, said his state is the "poster child" for the act, citing the spotted owl and its impact on his state's timber industry.
He said his committee is planning a number of hearings across the country on ways to reform the act, and he cited two goals: One is writing a law that actually helps the species recover, and two, a law that moves away from endless litigation. "I'm under no illusion this will be easy," he said. "This is an emotional issue more than anything else. But having looked at the act and having lived the results, I've concluded that those who advocate for a species don't live in its habitat."
Conaway pointed out that, under the act, there has been only a 1 percent success rate in recovering species. "Even the most ardent conservationist shouldn't be satisfied with 1 percent," he said. He called for reform that requires consideration of the financial impact of listing a species. "Only rich countries can care more about a gray smelt than thousands of agriculture workers," he said. "Only a rich country can decide a lizard is more important than thousands of oil jobs. We are (trillions) in debt; we've made (trillions) in promises to each other that our grandkids can't pay. We aren't a rich country."
Alan Means, a co-owner of Cambrian Management, said he wished all the members of the House and Senate could tour the Permian Basin. "It seems so many decisions are made on little data, like hydraulic fracturing. It's the same with the Endangered Species Act. If we made decisions based on such little data like regulatory agencies are making, we'd be out of business."
Rancher Bill Wight criticized what he called the "pseudo study" that was used to determine the sand dune lizard was endangered.
Energy Independence
Canseco noted that President Obama on Thursday was in Iowa talking about energy, promoting renewable energy and he and other members of HEAT were asked if the president was responsible for the recent decline in gasoline prices. He said reporters were told the president was not responsible for lower gasoline prices, which have more than doubled, along with prices for groceries "and everything else."
"The president is picking winners and losers," he said. "I don't begrudge wind farms -- there's one in my district, in Pecos County, that sells 160 megawatts into the grid. But we don't just need wind farms. We are sitting on a mother lode of oil and natural gas, but this administration has made it extremely difficult, used every trick in the book and then some, to make your job more difficult."
Neugebauer said the issue was important because energy independence was not just an issue of economic security but national security as the nation relies heavily on energy from foreign countries that aren't always friendly to the United States.
"That's why having a comprehensive energy policy is so important. We've been talking about an energy policy for too long; we need to act."
Tax treatment
Asked by Billingsley about changes to tax treatment for the oil and gas industry, Conaway said one reason he brought Speaker of the House John Boehner to the Permian Basin in April was "so he would know that, when we talk about intangible drilling costs, that floorhand making a connection has his salary, the cost of running that rig, is paid through IDCs. The cost of the frac job we saw this morning, operators can immediately deduct those costs and that reduces their tax bill."
He estimated independent operators put "140 percent of what they earn each year back into the ground. If you raise their taxes, they not only won't have the money to put back in the ground but they won't have that additional 40 percent to put in the ground."
Environmental Protection Agency
Odessan Kirk Edwards, president of Las Colinas Energy Partners, asked about new EPA rules requiring the capture of emissions during hydraulic fracturing of natural gas wells.
"We need someone else leading the EPA," responded Conaway, who continued, "We will always have regulations but they should make sense and they should regulate the minimum amount. We all want clean air, we all want to drink clean water, but they should let people comply with regulations in an efficient, cost-effective manner, and when the regulations aren't needed anymore, they should go away."
He said Congress will try to use the appropriations process to limit EPA regulations.
Agriculture
Billingsley asked about the impact of energy prices, availability and reliability on the agriculture industry.
"Agriculture is extremely dependent on energy, whether it's diesel to run the tractors or chemicals and fertilizers," replied Neugebauer, a Republican whose district includes Abilene, Lubbock and Big Spring. "Agriculture has become big business. What we have now is a number of producers farming 2,000, 3,000 or 5,000 acres. It takes a lot of capital and they need a reasonable return." They have a lot of money in their crops, he said, and the variable is the cost of energy.
Energy prices even can impact the cost of tires, pointed out Mitchell Harris, chief executive officer of AgTexas Farm Credit Services, who said farm costs have doubled in the last decade. "Without the oil industry, we couldn't produce crops," he said. "We want them producing more." World demand is going up, he said, but oil production has a naturally occurring decline curve. If operators can't drill more wells and produce more, he said, there will be less fuel and higher prices "and that bleeds through to the consumer."
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