President Obama in his annual State of the Union speech for the first time issued a strong call for development of domestic natural gas and oil as part of “an all-out, all-of-the-above strategy that develops every available source of American energy.”

Devoting more time to favorable mention of fossil fuels than he ever has before, Obama proclaimed that “we have a supply of natural gas that can last America nearly 100 years. My administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. America will develop this resource without putting the health and safety of our citizens at risk.

“Nowhere is the promise of innovation greater than in American-made energy. Over the last three years, we’ve opened millions of new acres for oil and gas exploration…Right now, American oil production is the highest that it’s been in eight years. That’s right — eight years. Not only that — last year, we relied less on foreign oil than in any of the past sixteen years.

“But with only 2% of the world’s oil reserves, oil isn’t enough. This country needs an all-out, all-of-the-above strategy that develops every available source of American energy — a strategy that’s cleaner, cheaper and full of new jobs.”

To develop that American energy the president said he was “directing my administration to open more than 75% of our potential offshore oil and gas resources.” Some industry watchers noted that the pledge was the same as the long-term leasing program already announced by the Interior Department, but that didn’t dim natural gas industry elation at the unprecedented praise.

With Tuesday’s speech behind him and the election that could deliver him a second term just over 10 months away, Obama took his “Blueprint for an America Built to Last” on the road, promoting the “all-out, all-of-the-above” energy strategy to audiences in Arizona, Nevada and Colorado.

“We’ve got a supply of natural gas under our feet that can last America nearly 100 years,” Obama told workers at a UPS facility in Las Vegas, NV, Thursday. “Developing it could power our cars and our homes and our factories in a cleaner and cheaper way. The experts believe it could support more than 600,000 jobs by the end of the decade.

“We, it turns out, are the Saudi Arabia of natural gas.”

The United States could become a country where more vehicles are fueled by natural gas than by foreign oil, where energy companies lead the world in developing natural gas technologies and where manufacturers become more competitive through the use of natural gas, Obama said.

UPS and 13 other companies have put more than a million alternative fuel vehicles on the road since last April in response to an administration challenge. “That’s a lot of trucks — we should do more though,” Obama said. In an effort to get more natural gas vehicles (NGV) on the road, both federal and local government fleets should be converted to natural gas; tax incentives should be offered to help companies buy more NGVs; and more natural gas refueling stations should be built across the country, Obama said.

“We’re going to keep working with the private sector to develop up to five natural gas corridors along our highways,” he said.

Obama also called on Energy Secretary Steven Chu to launch a competition to encourage scientists, engineers and entrepreneurs to find breakthroughs for natural gas vehicles.

Some who were attempting to discern the muscle behind Obama’s message saw it as an indication the administration would not come down too hard on hydraulic fracturing (fracking) rules. Tudor, Pickering, Holt and Co. analysts said the president’s plug for developing domestic natural gas and oil “takes some of the target off the back of hydraulic fracturing…domestic production growth from either commodity isn’t happening without fracturing.”

While promoting natural gas, Obama in his State of the Union speech reiterated the administration’s position for requiring disclosure of chemicals used in fracking, saying “the development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy.”

But, there was no mention of any additional restrictions on drilling. Chemicals disclosure already is advancing with individual state rules and a website supported by the industry, fracfocus.org, where companies voluntarily disclose their chemical use.

The president’s new recognition of natural gas was part of his strategy to support all forms of domestic energy. He gave the federal government some credit for shale gas development and used it as a lead-in to a reiteration of his support for renewable energy incentives.

“It was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock — reminding us that government support is critical in helping businesses get new energy ideas off the ground.”

Even the repeat of his usual refrain calling for an end to oil and gas tax subsidies, thrown in toward the end of the speech almost as an after-thought, didn’t dim the industry’s (irrational?) exuberance.

Natural Gas Supply Association President Skip Horvath said the industry “stands ready to meet the challenge laid down by the president to help natural gas realize its potential as a key part of U.S. energy policy.” And, America’s Natural Gas Alliance pointed out “the president said — our nation does not have to choose between economic growth and environmental stewardship. That indeed is the promise of abundant, American natural gas.”

Among others, the American Gas Association (AGA), Interstate Natural Gas Association of America (INGAA), National Association of Manufacturers (NAM), American Chemistry Council (ACC), Alliance to Save Energy and Consumer Energy Alliance (CEA) all gave a thumb’s up to portions of the speech, but some praise carried the caveat that there needs to be more action behind the President’s words.

Calling natural gas “a fuel in the right place, at the right time,” AGA CEO Dave McCurdy praised Obama’s push for gas’s role in the nation’s energy future — both in the address to a joint session of Congress and in his recent jobs report. INGAA also commended the recognition for gas and the role it can play.

“We appreciate President Obama for recognizing the role of domestic natural gas as a pillar of U.S. energy policy, and we urge him to remember the critical role pipelines play in bringing this vital energy supply to market,” said INGAA CEO Don Santa.

While giving Obama kudos for focusing on jobs and energy security by boosting domestic energy production NAM CEO Jay Timmons said the administration’s decision earlier this month to deny a permit to the proposed Keystone XL oil pipeline from Canada to the Gulf of Mexico “killed the promise of nearly 20,000 manufacturing and construction jobs.” Timmons said the President has the opportunity to create jobs by eventually approving the controversial project.

“The Obama administration must take action to put an end to the rampant overregulation and overreach by the National Labor Relations Board and the Environmental Protection Agency,” Timmons said.

ACC CEO Cal Dooley said both energy and manufacturing are keys to “any blueprint for a stronger economy.” Dooley said NAM and the 780,000 manufacturing employees it represents are “part of the answer” for meeting the energy challenges the president referred to in his more than one-hour speech.

Officials with the coal industry said they felt ignored. Steve Miller, CEO of the American Coalition for Clean Coal Electricity, characterized Obama’s speech as being most notable for what it left out — “any mention of coal, America’s dominant source of electricity.” Miller said it seemed “inconceivable that any national goals of creating jobs, rebuilding U.S. manufacturing and keeping energy affordable for our families and businesses can be achieved without domestically produced coal playing a central role.”

The administration on Thursday said the Bureau of Ocean Energy Management (BOEM) will hold consolidated Central Gulf of Mexico Lease Sale 216/222 in New Orleans on June 20 (see related story). The proposed oil and gas lease sale will include all available unleased areas in the Central Planning Area offshore Louisiana, Mississippi and Alabama, and make nearly 38 million acres available, BOEM said.

But did the Environmental Protection Agency (EPA) not get the memo about the administration’s new all-out support for domestic oil and gas? Cabot Corp. suggested that might be the case, noting that the agency appears to be running counter to the message with its unexplained action recently to reopen the long-running Dimock, PA, water well saga (see related story).

The case had apparently been closed for all but a few homeowners who refused the state-approved settlement with Cabot, plus an environmental cadre. But in spite of extensive state tests and studies previously made available to the agency, EPA has decided to retest Dimock water. “EPA’s actions in Dimock appear to undercut the president’s stated commitment to this important resource..,” Cabot Chairman Dan O. Dinges said in a letter to EPA Administrator Lisa Jackson.

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