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Why $3 Gas Makes for a Happy Holiday Season

CEA - Thanksgiving Graphic - V2

 

Planning on traveling for the holidays? Your road trip will be cheaper this year thanks to record levels of U.S. and Canadian oil production. Increased crude output combined with lower demand have driven the national gasoline average price under $3 per gallon for the first time since 2010, and may get even lower before the year’s end.

According to AAA, U.S. energy consumers are spending $250 million less each day than they were this summer when gas prices peaked at $3.68 per gallon. Lower gas prices mean that American consumers will have cash to put toward another present at Christmas or more groceries at Thanksgiving. In fact, that extra $250 million in the pockets of American consumers could purchase more than 11 million Thanksgiving turkeys!

Families traveling by car for the Thanksgiving holiday can expect to spend $61.31 for the average 500 mile round trip road journey. This makes the trip over the river and through the woods to Grandmother’s house 8.5% cheaper than the cost of the same trip in 2013.

Interested in finding out how you can save on energy costs and keep gas prices low? Here’s what you can do:

  • Learn how to make the most of each tank by checking out The Energy Voice’s list of Ten Consumer Tips for Saving Gas and Money.
  • Tell your elected officials that you support drilling efforts and energy efficiency measures that create jobs and make low gas prices possible.
  • Use your voice to call for the responsible development of energy resources by taking grassroots action through Consumer Energy Alliance.

Affordable Energy is Essential to American Farms 

Combines harvesting wheat

Data from the Energy Information Administration shows that American farms are major energy consumers, with energy costs making up a large part of a farmer’s expenses. The EIA reports that in 2012, “[U.S. crop and livestock operations] used nearly 800 trillion British thermal units (Btu) of energy, or about as much primary energy as the entire state of Utah.” Unlike the livestock industry, farms must shoulder the costs for the indirect energy used in the production of fertilizers and pesticides.

From the EIA:

Energy makes up a significant part of operating expenditures for most crops, especially when considering indirect energy expenditures on fertilizer, because the production of fertilizer is extremely energy-intensive, requiring large amounts of natural gas. For some crops like oats, corn, wheat, and barley, energy and fertilizer expenditures combined make up more than half of total operating expenses. The proportion of direct to indirect energy use varies by crop. For example, corn, which is also used as an energy input for ethanol production, has relatively low direct fuel expenditures but has the highest percentage of fertilizer expenditures.

Source: EIA
Source: EIA

In order to mitigate energy expenses, some farms are making strides in the use of renewable energy. A growing number of dairy farms employ methane digesters which produce electricity, and farmers are placing wind turbines on their land to produce wind power. The EIA reports that some even produce enough to be “sold to electric power suppliers, providing additional income for farmers.”

However, even though American farms are starting to capitalize on renewables, it’s clear that keeping conventional energy sources affordable is still vital to successful crop production.  According to the Agricultural Outlook 2013-2022, a joint analysis by the Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organization (FAO) of the United Nations, “With prices of fertilizers and other farm chemicals and machinery costs closely related to oil prices, any rise in oil prices is expected to quickly translate into increasing production costs,” which ultimately shrinks supplies and increases consumer prices.

Energy: A Nonpartisan Priority Obama And The New Congress Should Agree On

After the results are tallied across the nation and new members are sworn in, the Congress and administration will begin to forge their policy agendas for President Obama’s final two years in office. And on the top of that priority list should be energy. For far too many years, Congress has been at an impasse on issues of strong bipartisan support, including recent measures on energy efficiency and Keystone XL.

While our policymakers in Washington, D.C., may think that energy has become an overly partisan issue, voters across the nation broadly support many energy-related measures.

That’s why in a number of recent competitive races across the nation, energy issues mattered to voters. Indeed, opinion polling conducted for Consumer Energy Alliance (CEA) showed that the Keystone XL Pipeline and Arctic energy were at the forefront of voters’ minds.

Interestingly, voter polls conducted in three states with pivotal U.S. Senate races found strong support for allowing oil and natural gas production in U.S. waters inside the Arctic Circle. Why would voters in the lower 48 care about offshore energy in Alaska when it is so many miles away?

For starters, elections have consequences. Decisions about the future of offshore drilling in the Arctic and elsewhere will be made in coming months and years by the federal government, with strong input by Congress and coastal governors. And these voters clearly understand Alaska’s strategic value to our nation’s energy diversity, which empowers our national security and economic security.

Americans know that the short-term and long-term future of offshore drilling in coastal areas like the Arctic, the Gulf of Mexico, the Atlantic and elsewhere rests firmly in the hands of our newly elected leaders.

Consequently, the federal government’s decisions on offshore energy production have sweeping impacts. After all, the Alaskan Outer Continental Shelf (OCS) holds substantial influence on the future of U.S. economic and energy security as well as global geopolitical relations. U.S. Arctic waters – with an estimated 27 billion barrels of oil and 132 trillion cubic feet of natural gas, much of which is in the Chukchi and Beaufort Seas – remain one of the country’s most prolific energy reserves.

In fact, more onshore and offshore production, accompanied by the right balance of policies and regulations, could mean that new Alaskan production might reach 1.6 million barrels of energy per day by 2030. Offshore development could also generate $193 billion in new revenue and 55,000 jobs nationwide.

To illustrate the magnitude of these resources, consider this: Thirty billion barrels of Alaskan oil could fuel every domestic flight for over 120 years. And 141 trillion cubic feet of natural gas could heat every American house for 34 years. Simply put, American consumers need Alaska.

In order to further the nation’s energy and national security objectives, exploration of Alaska and its Arctic waters must remain a dominant figure in the nation’s energy equation. The state’s vast deposits of natural resources enable economic growth, bolster trade, reduce the nation’s debt, lower consumer energy costs, and ensure safe, affordable energy for all Americans, even those in the lower 48 states.

Now that Election Day has passed and voters have determined the new makeup of the Congress, American consumers need to remind their new representatives of the role that they will now need to play to support American energy self-sufficiency. Their future policy agendas and votes in the next two years will determine whether the national economy will be strengthened via federal policies that encourage offshore energy or hampered by overly reactionary, hyperbolic, exaggerated fears over offshore exploration.

The U.S. can and must be a leader in counteracting environmental challenges with science, technology, and smart, thoughtful policies that expand domestic energy production.

As we look towards the start of the Congress, CEA hopes that our policymakers remember that party affiliation should not matter when it comes to meeting our nation’s energy needs, growing our economy and ensuring a diverse and sustainable energy future. For too long, some have attempted to create a false choice pitting the environment against energy production of all types. Congress should be above this fray. We can and must protect our environment and develop our energy resources. This should be something on which Democrats and Republicans should agree.

Gas Prices Hit New Lows

Woman Fueling Car

Gas prices are the lowest they have been for four years according to AAA. Increased crude output combined with lower demand have driven the national gasoline average price under $3 per gallon for the first time since 2010 and gas prices may get even lower before the year’s end.

According to AAA, U.S. energy consumers are spending $250 million less each day than they were this summer when gas prices peaked at $3.68 per gallon.

Lower oil prices are the main reason for lower gas prices. Brent, the international benchmark for crude, dropped to $84.78 per barrel, Monday down from June’s year-high of $115. On Tuesday, it fell to $82.74. Every dollar of crude oil translates to about 2.5 cents per gallon of gasoline, said Jeff Lenard, vice president of strategic industry initiatives at the National Association of Convenience Stores, based in Alexandria, Va.

If crude oil continues to fall, gasoline prices will follow.

CEA’s Engagement in Wisconsin

As a part of its overall goal to ensure the increased production of domestic energy, lower energy prices and increased energy security, Consumer Energy Alliance (CEA) engages in many state-level campaigns across the country. Unfortunately, our recent efforts to promote a more fair and equitable system for electricity ratepayers in Wisconsin have drawn the ire of some environmental organizations. The groups have seized on CEA’s activity in the state in an effort to make a mis-informed point without bothering to fully understand CEA’s position on distributed electricity (including rooftop solar) and the areas in which we agree.

Many states across the country have begun to address how to integrate increasing amounts of distributed generation onto the grid while ensuring grid stability and maintenance. Throughout all of these discussions, CEA’s position is that  1) we encourage the use of solar; 2) we want to ensure that the electric grid and infrastructure are maintained; and 3) that consumer prices remain affordable.  Importantly, our phone surveys in Wisconsin took no position on the merits of the specific rate case in Wisconsin, and CEA does not comment on utility rate cases.

One organization in particular took issue with our efforts to gather supporters through a phone poll.

Because CEA did not offer any comments on the merits of the rate case, CEA asked the PSC to withdraw our submission on October 30, 2014. CEA took this step to help reduce any confusion on our position or the position of our petition signers, and to further highlight the three key points CEA wants the PSC to consider in all of its deliberation.  The next day, the PSC officially notified CEA that the petition was denied despite our request to withdraw the submission.

CEA stands by its original submission of 2,500 petitioners to the PSC. The process was transparent and forthright, and the names included in the submission were accurate, and CEA accurately reflected the survey in our communication to the PSC.

As an organization that advocates for energy consumers,CEA is an independent non-profit organization, managed by an active and robust Board of Directors, that has been engaged in similar efforts around the country for 10 years. Along with HBW Resources, who has been contracted by the CEA Board to help manage our organization, CEA’s process of gathering grassroots support for energy-related state and federal policies is something CEA and its members pride ourselves on. We will continue to advocate for increased fairness in electricity rates, affordable prices for consumers, and increased domestic production of ALL forms of energy.

Offshore drilling a winner in tight contests

WASHINGTON — Arctic drilling may not be a top tier topic in the Nov. 4 mid-term elections, but new polling suggests that endorsing oil and gas exploration in remote waters north of Alaska could be a winning strategy for some candidates in tight Senate contests.

In Alaska, where incumbent Democratic Sen. Mark Begich is being challenged by Republican Dan Sullivan, 73 percent of likely voters surveyed by Hickman Analytics said they supported allowing offshore oil and natural gas drilling in Arctic waters north of the state. More broadly, 72 percent said they supported expanding offshore oil and gas drilling in U.S. waters.

And in Louisiana, where Democrat Mary Landrieu is facing off against Rep. Bill Cassidy, R-La., and retired Air Force Col. Rob Maness, offshore drilling in U.S. Arctic waters is supported by 66 percent of likely voters. Seventy-six percent of likely Louisiana voters said they support expanding offshore drilling in all U.S. waters.

The telephone survey, which was conducted for the oil industry-backed Consumer Energy Alliance, found slightly less clear-cut support for Arctic drilling in Georgia, where there is a tight race between Republican David Perdue and Democrat Michelle Nunn. There, 59 percent of the 500 likely voters who were surveyed said they supported allowing Arctic drilling, compared to 21 percent who said they oppose it.

Lobbying: Shell and ConocoPhillips ask White House for flexibility in Arctic

Energy is a major issue in the Louisiana and Alaska Senate races, as well as the contest over Alaska’s governorship.

In Louisiana, Landrieu has played up her deep ties to the oil and gas industry and her role atop the Senate Energy and Natural Resources Committee.

In Alaska, Begich has touted his support for oil and gas development in Arctic waters north of the state, while Sullivan has accused him of failing to secure substantive commitments to advance the activity. Meanwhile, Republican Gov. Sean Parnell’s support for oil tax changes in Alaska has been attacked by his opponents, Bill Walker, a Republican running as an independent, and his Democratic running mate Byron Mallott.

Nationwide, other topics such as the economy, health care and immigration are eclipsing energy in motivating voters, according to recent surveys. Low gasoline prices may be one reason energy seems to be on the back burner.

But David Holt, president of the Consumer Energy Alliance, notes that energy itself is an economic issue. Oil prices have declined against the backdrop of tempered Asian demand and soaring U.S. production.

Read more: Gulf Coast crude imports fall to lowest level in six years

“It’s on the minds of voters, even though gasoline prices and global oil prices have gone down,” Holt said. “We’re producing so much more it’s acting as a nice hedge on global oil prices.”

Holt said the survey demonstrates the zeal for oil and gas development in Alaska.

Alaska residents collect an annual dividend from the state’s permanent fund, a repository fed by oil and gas revenue.

There often is an “insinuation that folks in Alaska do not support development of their natural resources,” Holt said. “These polls that we’ve just done clearly show that they do support it and not only strongly support it, overwhelmingly support it. It’s not even close.”

The survey was conducted in late September and early October, with 400 to 502 likely voters from each of the three states.

Promote, don’t hinder, safe and responsible energy production

An op-ed by Consumer Energy Alliance President David Holt in the San Angelo Standard-Times details the economic growth in the counties south of Refugio, Texas, as a direct by-product of the new activity from the Eagle Ford Shale.

Refugio County, Texas is a small, close-knit, ranching community.

Local butcher and county commissioner Stanley Tuttle, owner of Tuttle’s Grocery and Market, said most residents of the 10-square-mile southeastern region are either retirees or workers who travel extensive distances to Corpus Christi or Victoria for work.

“If you weren’t involved with farming or ranching or something of that aspect, there just wasn’t a whole lot more things to do around here,” Tuttle recalled.

That’s not the case anymore.

To make a living, residents once relied heavily on farming and motorists stopping for supplies while traveling on nearby highways. New activity from the Eagle Ford Shale located to in the counties south of Refugio is starting an uptick in economic growth.

“The things that have happened have really helped out,” Tuttle said, referring to the Eagle Ford Shale, which has led to a boost from new service companies relocating into town even though there is no drilling taking place within the county. “They have helped our locals find jobs right here at home, where they don’t have to do the traveling,” Tuttle said.

Jobs are plentiful and housing is in demand – so much so that Refugio is doing all it can to attract developers and build new homes. 
The Eagle Ford Shale’s economic benefits are reaching industries across the community.

Cody Walker, owner of Le Blue Sky, Ladies Boutique says business is up – and she credits some of that to the energy boom that has taken place in neighboring counties. “We (have) not only directly but indirectly (been affected) being that their husbands work in the oil fields or have oil field-related companies, and that in turn gives them safe passage to come to Blue Skies,” she said.

Robbie Blaschke, general sales manager at Wilkinson Chevrolet, said demand for lifted trucks has risen considerably since the explosion of Eagle Ford Shale in nearby towns. “These have become a hot commodity here in Refugio County,” he said.

Refugio County is an example of how the rising tides from development like the Eagle Ford Shale are helping lift the economies in adjacent communities.

According to the U.S. Energy Information Administration (EIA), Texas was the leading crude oil-producing state in 2013, exceeding production levels even from the federal offshore areas. This is why the Lone Star State ranks as the ninth largest oil-producing region in the world – greater than Middle Eastern Goliaths like United Arab Emirates and Kuwait.

We can thank the Eagle Ford Shale for this Texas-sized accomplishment. The onshore oil reserve, according to Forbes, is the largest oil and gas development worldwide in terms of total capital expenditures. The Eagle Ford already produces more than 352,000 barrels a day. However, Thomas Tunstall, research director for the University of Texas at San Antonio’s Institute for Economic Development believes that “it’s likely to [reach] the million-barrel-per-day mark this year.”

The benefits that the Eagle Ford Shale has brought to Refugio County and its surrounding communities are endless. In less than half a decade, it has radically remade the economic fortunes of a region, attracting new jobs, tax revenues, and residents. All this from a county that neighbors the Eagle Ford.

The good news is that this trend isn’t limited to Refugio County. The entire state of Texas is also seeing economic benefit. The U.S. Bureau of Labor Statistics recently released a report showing that Texas added 22 percent of all jobs nationwide in April. And Texas’ 5.2 percent unemployment rate is the lowest since September 2008 and more than a full percentage point below the national average.

Unfortunately, some special interest groups like the Sierra Club and Food and Water Watch are intent on stopping energy development – and the lower energy costs and prosperity that come with it. By advancing shale energy, we can bring forth new jobs and new tax revenues to fund schools and local initiatives.

Instead of misleading American consumers, safe and responsible energy production should be promoted. Texas is proof of this. That is why it is vital that the oil and gas industry continue to engage with Texans – and all Americans – about the many opportunities that shale energy offers. Today’s energy renaissance is the latest chapter in our pursuit of the American dream.

Shale shines bright light on La.’s future generations

As U.S. crude production climbed to a 28-year high recently, the shale renaissance moved us one step closer to North American energy self-sufficiency. Substantial investment in the development of oil and natural gas has buoyed the economy, helping to support millions of jobs, generate billions of dollars in government revenue, and, most significantly, supply millions of consumers with affordable energy.

In this new shale revolution, energy is now one of the fastest-growing industries in the nation and an engine for economic growth. According to the consulting and forecasting firm IHS Global Insight, shale development has supported more than 2 million American jobs and generated $75 billion in federal and state tax revenues. By 2020, IHS estimates, total jobs linked to shale will grow to 3.3 million, with a total impact on U.S. gross domestic product of nearly half a trillion dollars.

American Petroleum Institute data show that 10 million jobs have been created in the energy sector alone. accompanied by tremendous economic development outside the industry. For example, fertilizer manufacturers such as Consumer Energy Alliance member company, CF Industries, has expanded its U.S. operations by opening three new plants. According to the American Chemistry Council, approximately $10 billion in capital investments have been made to expand fertilizer manufacturing in the U.S. through 2020.

These statistics point us toward the need for Louisianians to focus on workforce development, which will affect their role in the energy boom.

To take advantage of the opportunities created by the shale industry, students must be ready to compete in science, technology, engineering, and math (STEM) career-focused education. Excelling in these fields will help students become the geoscientists, engineers and mathematicians needed to support shale energy development in the state’s Haynesville and Tuscaloosa Marine shale regions and to support the expanding manufacturing and refining industries in the state.

STEM jobs will increase by 17 percent in the next five years

Experts estimate Louisiana alone will have 69,000 STEM job vacancies by 2018. But how can Louisiana prepare to fill these positions? There are many schools in the Gulf Coast whose engineering programs feed students into the oil and gas field, including Louisiana State University. And, some oil and gas companies are even involved in programs to foster interest in science and engineering. Chevron recruits from over 90 schools in the U.S. — including LSU — through its University Partnership Program, which furnishes universities with scholarships, grants, laboratory upgrades and other funding and gifts.

Nucor Steel just opened their 28th steel plant here, creating 500 jobs during peak construction. It also will employ about 150 permanent workers who will earn a median salary of $75,000.

I can’t think of a more iconic image of the U.S. than the old “Rosie the Riveter” and steel. We lost the steel industry a decade ago. Now, the steel industry is back with a vengeance, competing with other countries around the world, because of hydraulic fracturing, shale development, and low-cost natural gas, which is in abundant supply.

Due in part to this energy revolution, today we are using our nation’s resources to bring manufacturing jobs back from China. Development of resources such as shale is reigniting industries once lost to the high cost of energy.

For our future generations, life is changing for the better. Just these few examples show that the moment is now for Louisiana’s future generations to take advantage of the energy revolution.

— David Holt, is the president of Consumer Energy Alliance.

Hundreds attend fracking hearing in Raleigh

The Associated Press reports on a public hearing in Raleigh, North Carolina focused on proposed hydraulic fracturing regulations in the state, with organizations such as CEA’s Michael Whatley taking to the podium to address state’s Mining and Energy Commission.

Nearly 400 people filled an auditorium at North Carolina State University for the first of four meetings during a comment period that lasts until the end of September. The state Mining and Energy Commission will analyze comments and consider revisions to the rules, which then must undergo a fiscal review before legislators have the final say.

Michael Whatley, executive vice president of the Consumer Energy Alliance, said North Carolina manufacturers have been able to add jobs and expand operations because of affordable, domestic, natural gas.

“The CEA strongly supports development of U.S. shale resources and applauds the efforts of the state to move forward with a sensible regulatory regime to oversee production of its energy resources,” Whatley said.

Federal Gov’t Must Move Forward with Arctic Exploration: New Environmental Analysis Shows It Can Be Done Safely

 

Last week, the federal Bureau of Ocean Energy Management issued a Draft Supplemental Environmental Statement (SEIS) for Chukchi Offshore Oil & Gas Lease Sale 193, north of Alaska. The new draft, which will be open for public comment through December 22, 2014, re-evaluates the potential environmental impact of oil & gas development in the resource-abundant waters north of Alaska.

Since 2008, the lease sale has gone through multiple rounds of time-consuming litigation, with anti-energy groups utilizing every procedural tactic in the book to delay energy development and curtail America’s ability to become energy self-sufficient and more secure. However, time and again the Obama Administration has reaffirmed the safety of Arctic exploration.

Commenting on the release, Consumer Energy Alliance (CEA) President David Holt said:

“Now is the time to move forward with Arctic exploration programs. We’ve done the due diligence to study the possible impacts of exploration, and the federal government has maintained that through smart application of technology and science, we can develop our Arctic resources safely. Doing so will boost our long-term energy security, ensure American consumers have a stable source of energy well into the future, and help create much-needed jobs throughout the U.S. in manufacturing, processing, agriculture and every sector of the economy.”

“In order to move forward with exploration programs, the Obama Administration must – once again – affirm the safety of drilling by expeditiously approving this environmental review. After more than six years of study, leaseholders must be afforded the opportunity to explore for these prodigious American resources.”

CEA has long-supported sensible Arctic offshore resource development through multiple membership calls to action, and will soon re-engage its network to support responsible Arctic development as part of this public comment period. Visit Consumer Energy Alliance’s action portal in the coming days to view and submit a comment in support of Arctic energy.

For more information about why CEA believes Alaskan energy is vital to U.S. consumers, view CEA’s recent blog on the matter here.

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