Throughout the last decade, domestic energy development has received significant attention. Political instability in energy rich countries, wars in Iraq and Afghanistan and continued economic prosperity in developing nations like China and Brazil have led to increases in commodities in the United States and abroad. As it stands today, the two main goods most affected in the United States have been food and fuel. However, based on our nation’s ability to produce excess food, the average American has noticed these progressions more in the prices of energy, something our nation does not produce in excess.
The state of energy development in the United States has been largely driven by political pressure on producers to lower prices and by producers to take advantage of higher prices of energy commodities. Though these are opposing goals by each organization, the net result has been focused on increasing the extraction of the energy necessities Americans consume the most, though we are still a net importer of both oil and natural gas. In my opinion, this will lead to a surge in development of these resources in the United States in an effort by both parties to achieve their goals. I do, however, believe the higher prices of energy commodities are here to stay because international markets determine the prices for oil and gas to a greater extent than the political will of Washington, D.C.
When one looks at the viability of any business or industry, there are a small number of basic factors that contribute to the decision to pursue a venture. This includes long-term supply and demand, operational costs and availability of substitute products or services. When examining these components in relation to the oil and gas industry, there appears to be no weaknesses. Supply of oil and gas is not infinite. Demand is growing rapidly from places like India and China, two countries that contain one-third of the world’s population. Operational costs can be controlled easily due to the current economic environment. Recessions provide opportunities for decreases in costs for both inputs and labor. There are also few widely available substitutes for heating the average home or powering the average car, truck or train.
These factors make the energy business a bright spot in our nation’s economy and I believe it will continue until those issues change. They are the fundamental building blocks of any viable industry and there is no significant industry in the United States with stronger fundamentals. One could make an argument for healthcare, but I would counter that even with our aging population, healthcare is not an international commodity. Until an alternative fuel source is developed, tested and implemented on a wide scale, Americans—and the rest of the world—will continue to use oil and gas to provide for heat, power, transportation, industry and comfort. It only makes sense that Americans support the expansion of oil and gas development in our nation’s energy rich regions.
The importation of oil and gas into the United States is a considerable domestic agenda problem. There are many groups, who oppose further development of our resources for various reasons, but these same groups are filled with individuals who must drive to work, cook with electricity from coal fired power plants and heat their homes with natural gas. Does it not make more sense to explore for and produce both oil and natural gas in regions like the Rocky Mountain West, plains of Texas or upper Midwest if it both creates American jobs and lessens the amount of wealth we transfer to possibly unfriendly regimes in the Middle East or Latin America? The fact that we still import a percentage of our natural gas usage in the United States astounds me, not only as an energy producer, but as an American.
It is my opinion that policy will shift towards a more exploration and development-friendly agenda. It is necessary for the continued growth and stability of our nation. We have the resources to produce, we rely heavily on those resources, and we have improved technology to a point that makes it economical to extract those resources. It also seems to me that a logical shift would be to engineer and construct a greater number of natural gas fired power plants to replace some of our aging coal fired power plant infrastructure. While coal may be cheap and abundant, I believe environmental concerns will trump cost and because natural gas is abundant and cleaner burning per Btu, it is a logical step towards a “greener” power grid.
My point in writing this is to simply say that our leaders should embrace the energy reality that we currently live in. Higher prices are here to stay and the best way to combat those elevated costs is to use them to our advantage, which means developing those resources, creating domestic jobs and at the same time, reducing our dependence on foreign energy imports. This is not to say that it does not also make sense to reduce the amount of natural resources we consume in the United States, but all rather that changes take time to implement so we might as well take the necessary steps to ensure our energy needs are met with friendly oil and gas production.
An established veteran in the oil and gas industries, Mark Hettinger has over 30 years of experience in oil and gas construction, fabrication and process equipment. Mark founded Hettinger Welding in 1980 to provide welding and fabrication services to energy companies in Wyoming. In October 2006, after 28 years as principal owner and CEO, he sold Hettinger Welding, but remained the CEO of the Hettinger companies through 2009. Mark’s vision grew Hettinger to over 1,400 employees and a 200 million plus dollar annual market share, solidifying Hettinger as one of the largest oil and gas construction firms in the western United States. In 2009, he retired as CEO of Hettinger to focus on oil and gas production and is an active, managing member of High Plains Gas, Inc.
Reference: http://www.oilgasmonitor.com/future-oil-gas-development-rocky-mountain-west/566/
