Energy companies are constrained in various ways on every level— exploration and development, generation and transmission,refineries and pipelines — and these barriers all point to theneed for the United States to shape an effective national energypolicy, said several speakers at the recent annual conference ofthe International Society of Energy Advocates.

Meeting in Oklahoma City, many of the panelists focused onOklahoma’s oil and gas industry, including expanding transmissioncapacity, tax incentives for energy production and issues facingsmall producers in the state.

While focusing on Oklahoma’s concerns, speakers also zeroed inon the lack of state or national energy policies, citing how thephysical constraints within exploration and production, lack ofpipelines, too few refineries and a need to expand electricitygeneration and transmission were hurting the nation’s economy,spelling signs of even more problems in the future.

Denise Bode, vice chair of the Oklahoma Corporation Commission,told participants that the infrastructure in the United States is”shot,” adding that the country has to turn its attention to aneffective policy now. “We can no longer bide our time,” she said.

Robert L. Parker, chairman of Tulsa-based Parker Drilling Co.,said the biggest problem facing the country was its inability tomeet the growing demand for generation while misrepresentingrenewable energy “as a solution.” And now, he said, the energyindustry’s credibility is an issue because it is becoming moredifficult to deliver adequate gas supplies.

“We told them we had lots of gas,” but he said that the countrydoesn’t and because of production constraints, some power companiesare announcing plans to build coal-fired generation plants to makeup for a lack in natural gas supplies.

Mark Monroe, president of Louis Dreyfus Natural Gas Co., saidthat “only an energy crisis” would result in a significant policy. Even though he didn’t think a policy was a near-termpossibility, he called on Congress to enact a plan that wouldprioritize energy supplies and provide more land for exploration.He also said it was time for a natural gas pipeline from Alaska tothe Lower 48 to become a reality, and said Congress needed toremove drilling restrictions and provide tax incentives toencourage producers.

Two major issues face small producers in Oklahoma, according toLiz Fajen, executive director of the Marginal Well Commission inthe state. Tax relief is the top issue, she said, but they alsoface the problem of dealing with the spread of land development inareas that were once the sole domain of producers. She said thatthe encroachment issue is escalating as people move out of thecities, and in some cases, operators have been blocked from welllocations.

Oklahoma’s future generation also may be a problem, according toTed Banasiewicz, executive vice president of Smith Cogeneration inOklahoma. He said that the state has to improve its transmissioncapacity, and urged the state’s Legislature to enact laws toencourage investment in electricity transmission.

“Under current conditions, there is very little motivation forutilities that own the transmission systems to invest in upgrades,”Banasiewicz said. And without the transmission, independent powerproducers will not be able to service customers. “If you can’t getyour product to the consumer, no perfect legislation is going tohelp.”

Carolyn Davis, Houston

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