NGI The Weekly Gas Market Report
Coming at a time when a national plan is gathering more supportas energy prices have escalated at the pump and in homes andbusinesses, the governors of the 30 U.S. oil and gas producingstates have begun their push for an official national energypolicy, offering their own four-pronged strategy.
The Oklahoma City-based Interstate Oil and Gas CompactCommission (IOGCC), which represents the governors of the 30states, said it wants to call attention to the potentially tightnatural gas market expected this coming winter as well as the highcosts put on the nation from imported oil, and said that an energypolicy is the best way to ensure problems are contained ahead oftime.
The four recommendations include the following: methods toassess the costs of imported oil; increased research to ensure thatdomestic oil and natural gas resources are developed to their fullpotential without sacrificing environmental protection; taxincentives to encourage more domestic exploration and production,modeled after successful state programs like Alaska’s; and”encouraging” the public to use energy efficient technologies toconserve the limited supply of fossil fuels in the United States.
Oklahoma Gov. Frank Keating and North Dakota Gov. Ed Schafer ledthe group’s call for a policy last week, and they also underscoredthe need for a “full” discussion about the nation’s energy future.
“The time for a national discussion is at hand and we invitecitizens and leaders at all levels of government to join us,”Keating and Schafer said in a statement.
Two things high on IOGCC’s agenda to be included in the nationalenergy policy are repealing net receipts sharing, and giving statesmore environmental protection authority.
IOGCC Vice Chairman Lawrence E. Bengal in June advocated therepeal of net receipts sharing, calling it an “ill conceived,costly and burdensome program from its inception.” Bengal thenurged members of Congress to enact HR 4340, which would replace netreceipts sharing by giving half of the royalties to the states andhalf to the federal government without first deducting federaladministrative charges.
Net receipts sharing requires states to share the federal costof managing onshore mineral royalties. It was mandated by the 1993Omnibus Budget Reconciliation Act, and before it was enacted,royalties were split equally between the states and the federalgovernment. In 1999, the IOGCC passed a resolution supporting therepeal of net receipts sharing.
In May, IOGCC’s Alaska Gov. Tony Knowles led the call to supportNew Hampshire U.S. Sen. Bob Smith’s plan to give the states moreregulatory power when it comes to environmental protection.
“State regulators have successfully shown they can identifytheir own environmental issues and have developed creativesolutions to tackle those issues,” Knowles said. “In Alaska, forexample, we are proving you can develop the nation’s largest oilfields while maintaining the nation’s most pristine environment.”
Carolyn Davis, Houston
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