A U.S. Chamber of Commerce official warned an Arkansas audience that overregulation of fracking practices in the oil and gas industry could cost jobs, tax revenue, and the overall economy.
Karen Harbert, the president and CEO of the U.S. Chamber Institute for 21st Century Energy, was a featured speaker at an Arkansas State Chamber of Commerce/AIA luncheon held at Heifer International’s world headquarters.
Harbert touted a litany of energy statistics that highlighted that in the next 35 years the world’s electricity demand will increase by 140%. Harbert also noted:
• The oil and gas industry created 9% of all American jobs in 2011;
• Oil imports are expected to decrease 60% by 2020;
• Oil and gas production has led to an American manufacturing renaissance as well as a return of chemical, fertilizer, and steel industries.
She said that the natural gas “fracking revolution” has helped feed the nation’s energy demand. Harbert said that Arkansas is now the No. 4 natural gas producing state in the U.S., according to recently released 2013 data from the U.S. Energy Information Administration (EIA). According to a “marketed production” report from the EIA, Arkansas ranked 8th in 2012 in natural gas production.
During the past decade, shale gas production has risen from two percent of the nation’s energy mix to 30% today. That number is expected to rise to 50% by 2035. But Harbert said regulatory intervention by the Environmental Protection Agency (EPA) could undermine that trend.
“What if the 13 federal agencies looking to regulate fracking are successful?” she said. “We have to keep it attractive.”
Harbert said a Colorado ballot initiative to allow local governments to supersede state fracking laws could also be detrimental if other states follow suit.
According to Harbert, Arkansas’ natural gas industry is expected to create 52,000 new jobs and produce nearly $900 million in tax revenue by 2020.
A relatively higher price and the continued production of natural gas from existing wells resulted in a record of $62.685 million in Arkansas’ gross natural gas severance tax revenue during 2013. The tally was up more than 53% compared to 2012 collections and up more than 6.4% over the previous high set in 2011. In 2009, the first year of the severance tax hike, Arkansas joined the list of the nation’s top marketed natural gas producers when sales of Arkansas natural gas spiked 57.5% to 690 billion cubic feet (Bcf). Arkansas natural gas sales rose another 36.1% to 939 Bcf of annual production in 2010, according to figures from the Arkansas Department of Finance and Administration and the federal Energy Information Administration.
Harbert also touted that coal, gas, oil and nuclear power must remain a crucial component of the nation’s energy policy. She said that there is no quick or easy way to remove U.S. dependence on low-cost coal as a fuel for generating electricity despite efforts to replace it with alternative fuels.
“The dinner party is still going to be the same,” she said. “”We’re going to need it all.”
Harbert is a former assistant secretary for policy and international affairs at the U.S. Department of Energy (DOE). She was the primary policy advisor to the DOE Secretary and to the department on domestic and international energy issues, including climate change, fossil, nuclear, and renewable energy and energy efficiency.
Scott Hamilton, director of the Arkansas Energy Office at the Arkansas Economic Development Commission, said Harbert’s message is a welcome discussion in the state.
“The points she made are very valid,” he said. “We have to have an energy focus in the U.S., and Arkansas has to continue to find ways to educate [this need] at the local level.”
The U.S. Chamber has developed a nine-point action plan for U.S. energy policy.