My Latest OpEd: Obama's War On Fossil Fuels Affecting Royalty Owners

The original OpEd was published on DailyCaller.com.

by Keith Mauck

With just 16 months remaining in President Obama’s second term, the administration is moving swiftly to make renewable energy more competitive by raising the cost of fossil fuels and regulating them out of existence. If the War on Coal is an apt example, apparently the strategy is working. More than two dozen coal companies have filed for bankruptcy so far. 

Now the president’s regulators are focusing on an even larger industry with bigger players—the oil and natural gas companies.

According to reports, the oil and gas industry soon will experience a “regulatory avalanche” consisting of several federal regulations, including the recently announced methane emissions rule. Its goal is to reduce the amount of methane gas that escapes from oil and natural gas operations by 45 percent from 2012 levels. 

Methane is considered a potent greenhouse gas associated with the threat of climate change. But it’s not clear the new regulations will have any impact on the climate.  It will, however, affect the budgets of drilling companies, which already are taking action to reduce methane emissions.

Even the Environmental Protection Agency’s own data show methane emissions from natural gas systems have fallen 11 percent since 2005. During the same period, methane from hydraulically fractured natural gas wells has declined nearly 79 percent, while U.S. natural gas production has soared.

Furthermore, slapping the industry with this new regulatory burden, estimated to cost about $320 million to $420 million per year, makes little sense at a time when oil and natural gas producers already are reeling from the market correction. The price of oil has dropped to the $40 a barrel range, reducing the amount of capital available to start new drilling projects. Stock prices for oil and gas companies have plummeted, and more than 100,000 U.S. oil and gas workers have been laid off.

Adding to the financial pain is the president’s Iran deal, which is likely to flood the global market with a torrent of Iranian oil when sanctions are lifted. Lower oil prices might be a boon to the pocketbooks of U.S. consumers in the short term, but over the long-term they set the stage for tight supplies and higher prices. 

We have witnessed this rollercoaster-like phenomena dictated by the Laws of Supply and Demand several times in the past decade. Each time it occurs, it sends shock waves through the economy and the household budgets of American families.

It also affects the 3 million users that have visited 3 shale social networks that I publish online. The users primarily are land and mineral-rights owners. Many have signed leases with drilling companies and use the royalty payments to support their families and small businesses.  There is an estimated 8 million royalty owners in the United States.

In fact, it is private royalty owners who have helped the United States become the world’s largest oil and natural gas producer.  Statistics show all increases in oil and natural gas production have occurred on non-federal lands since 2012 due to the Obama administration's prohibition of drilling on millions of potentially energy-rich acres; both onshore and offshore. Thanks to property law and drilling-friendly policy in the states, the shale revolution has occurred despite the President's efforts to extinguish it..

The president’s environmental supporters want these anti-fossil fuel actions to continue. “We’ve seen the administration willing to take on King Coal,” Jamie Henn, co-founder of the climate activist group 350.org, told a reporter recently. “They’ve got to go after bigger bad guys, like Big Oil and the Koch brothers.”

This approach to energy policy, however, ignores an important point: The United States does not run on political agendas. It runs on energy, and it will continue to need oil and natural gas long after President Obama has left the White House. Federal government analysts project that oil and natural gas will fulfill 62 percent of our energy needs in 2040, with coal continuing to provide about 18 percent. Renewables’ share of the energy pie will rise from about 7 percent today to only 10 percent in 2040.

That’s a very small return for a very costly—and questionable—government initiative aimed at stamping out fossil fuels. 

 

Keith Mauck, J.D. publishes GoMarcellusShale.com, GoHaynesvilleShale.com and EagleFordForum.com.

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Replies to This Discussion

Permalink Reply by Joseph-Ohio on August 27, 2015 at 8:57am
GREAT 'OpEd' (on the Dailey Caller) Keith !

GREAT Post here on GMS !

Thank you for voicing / writing !

We need to get the word out and yours is a powerful voice.

Renewables promoted by government and Natural Gas not - isn't at all understandable / makes no sense, as 'renewables' are projected to represent only 10% of our country's energy out ro year 2040.

To me, it's totally disproportionate and inverted thinking that seems to prevail within the ranks of our government / legislators / those empowered to make the important decisions.

Hate to witness them failing to make the right decisions.

I think we need support from the general public as we here appear to me to be in the minority.

Keep publicizing the truth Keith - hopeful it doesn't fall on deaf ears.

JMHO
Permalink Reply by Keith Mauck (Site Publisher) on August 28, 2015 at 3:11am

Thank's for your encouragement. Without you, and everyone else, my voice isn't nearly as loud, so thanks to you!

Permalink Reply by Jo on August 28, 2015 at 4:50am

We must ELECT officials that believe our dependency on foreign oil is not an option.  Keith, thank you for reminding us, to be vigilant about our goals.

Permalink Reply by Chris Vaught on August 28, 2015 at 6:44am

Well it is not just oil companies filing for bankruptcy.  I'm sure everyone else, like me, just got the notice of Chapter 11 bankruptcy by roughly 130 natural gas companies consolidated under Alpha Natural Resouces, Inc., et al.  This administration and sorry excuse of a president won't rest until we are all begging at the government teat.  I only have 12 acres but was counting on the royalties from it to help support me as I go into retirement.  It is extremely depressing to know that we are being toyed with and are so disrespected by Obama and his minions.  Despair, though, is what they are counting on, as it is one of the best ways to control people, which is their ultimate goal.  We are living in a really sinister time, in my opinion, and I just pray that we have woken up enough as a society to put any politician that even smells remotely like Obama behind us.  I'm not so sure that is the case and so I wait for November 2016 with baited breath.

One question, Keith…are you aware of any lawsuits agains this EPA madness surrounding climate regulations?  I was happy to see that a judge gave an initial smack down to the WOTUS rule and granted an injunction against it taking affect today.

Permalink Reply by Bill F. on August 29, 2015 at 12:05pm

So what's so wrong with protecting people from methane leakage ? Besides being a GHG 25X more potent than Co2 . reg's are needed to protect those living in extraction areas from facilities that are inadequate to protect the health  and welfare of locals nearby .This becomes essential when you live in these local areas .Industries should  operate with low emissions and leakage , which will only increase their  efficiency  and profits  .Without increased  government over site this will not be possible .Therefore  I and many others are supportive of increased regulations for the safety of everyone both local and regional .

Permalink Reply by Joseph-Ohio on August 29, 2015 at 1:59pm
What I'm gathering is that the O & G E & P's / Developers complain that the new regs. are too oppressive / over the top.

I myself, just don't know what to consider 'oppressive / over the top' insofar as methane leakage rates and regs. are concerned.

Anybody know where to draw that line ?
Permalink Reply by Joseph-Ohio on August 29, 2015 at 9:42pm
If it delays / stifles energy independence / prosperity for the U.S.A., it's too oppressive and over the top for me and mine.
Permalink Reply by Trapper on August 29, 2015 at 3:43pm
These clowns couldn't care less about your welfare. It isn't about your safety anyhow. They want you to believe methane damages the ozone layer. Remember a few years ago (way,way pre-shale)one of the Kennedy boys wanted to shut down the livestock industry because cow farts were killing the planet? This is another Trojan horse plan to weaken and destroy the USA. Make no mistake about it.
Permalink Reply by Joe Bezel on August 29, 2015 at 5:33pm

Bill,

Reread Keth's op-ed. The producers have reduced methane emissons by nearly 79% BEFORE government regulations came along.  It is in their interest to do so because methane is what they sell, and they certainly don't want to give any excuse for the zealots at the EPA to stomp on them.  Well, they are stomping on O & G producers anyway.  By the way, methane is 21% more potent, not 25%.  It is also harmless to people living near gas wells.  The only way for methane to hurt you is if there is enough methane in the air to blow you up (5-15%).  As a retired geologist and computer scientist, I find the perversion of science for agenda-driven politics disgusting.  Why aren't the zealots upset over the #1 greenhouse gas (water vapor)?  It is because it doesn't have the hated and feared element carbon in it. 

Permalink Reply by Trapper on August 29, 2015 at 5:43pm
It kills me that they are so against co2....the very thing that makes our planet green! Lol a bunch of lunatics.
Permalink Reply by Bill F. on September 3, 2015 at 6:35am

@ Joe .....21X.... ,25X ...or have heard in some cases as much as 75X ( depends on the source.My main point was protections are necessary for those living in NG extraction areas like me .Maybe CH4 is not harmful unless in concentration ,but there are plenty other issues I have seen over the last 5 yrs that need to be corrected .As a whole it can not be beneficial to vent or leak methane into the atmosphere for all of us .I see nothing wrong with the President or EPA trying to mandate stronger reg's on the NG industry .As far as I'm concerned the more and stronger the better .Remember my position comes from living with it for years .Industrial operations near people's homes will always have industrial related issues that can cause possible harm .Ignoring this is just plain ignorant or wrong .

Permalink Reply by frederick smith on August 30, 2015 at 1:59am
The train has left the station and gaining speed with all the vast amounts of permafrost melting caused by man or not.hopefully it does not run off the tracks.

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