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2009 Resolutions
Resolution 09.101
Urging the U.S. Government to Recognize the Importance of Oil and Gas Research and to Adequately Fund Oil and Gas Research Initiatives
WHEREAS, oil and gas research is a key ingredient in any comprehensive and effective national energy policy; and,
WHEREAS, the major U.S. oil and gas companies no longer make their comprehensive oil and gas research generally available and independent oil and gas companies operating in the United States generally lack the capability and capacity to conduct their own oil and gas research, thereby impacting the nation’s ability to effectively and efficiently develop its domestic oil and gas resources; and,
WHEREAS, the new National Petroleum Council (NPC) report “Facing the Hard Truths about Energy” recommends expanded research and development opportunities as essential to the existence of domestic production; and,
WHEREAS, the U.S. Department of Energy, Office of Fossil Energy, Oil and Gas Supply Research and Development Program, through its various initiatives and facilities, such as the National Energy Technology Laboratory (NETL) and the Rocky Mountain Oilfield Testing Center (RMOTC), as well as through activities conducted under Title IX, Subsection J, Sections 999A through 999H of the Energy Policy Act of 2005 which authorized the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Research Program, has conducted and supported significant public domain oil and gas research and development activities that have assisted in the development of public policy options to ensure clean, reliable, and affordable supplies of oil and natural gas for the American consumers; and,
WHEREAS, the technology developed as a result of these research and development activities has been effectively transferred to the domestic U.S. oil and gas industry through various means, including the Department of Energy-supported Petroleum Technology Transfer Council (PTTC), to assist in the discovery, development, and effective and efficient recovery of our domestic oil and gas resources for the benefit of the nation; and,
WHEREAS, the oil and gas producing states that are members of the Interstate Oil and Gas Compact Commission support the continuation and, in fact, enhancement of these critical programs; and,
WHEREAS, the member states of the Interstate Oil and Gas Compact Commission have significant capability and capacity to support and/or conduct oil and gas research and development activities within state oil and gas regulatory agencies, state geological surveys, research universities, and other state-based entities, many of which have participated, or are participating, in Department of Energy-supported oil and gas research and development programs that provide significant benefit to the nation; and,
WHEREAS, the U.S. Department of Energy oil and gas research and development program has been subject to significant reductions in funding, has been targeted several times in recent years for possible elimination in the Federal budget, and the Administration has presented a legislative proposal to Congress that would repeal Subtitle J of Title IX of the Energy Policy Act of 2005, and
WHEREAS, policy decisions of this nature would contribute to a substantial reduction of the nation’s ability to conduct important public-domain oil and gas research and development directed at ensuring that American consumers have clean, reliable, and affordable supplies of oil and natural gas;
NOW, THEREFORE, BE IT RESOLVED, that the Interstate Oil and Gas Compact Commission (IOGCC) urges the Administration and the Congress of the United States of America to recognize the critical importance of public domain oil and gas research and development activities to the nation; to ensure that future Federal budgets adequately fund the U.S. Department of Energy’s Office of Fossil Energy oil and gas research and development programs; to not repeal Subtitle J of Title IX of the Energy Policy Act of 2005, and to encourage the development of cooperative and collaborative federal-state initiatives and partnerships that support and utilize the capability and capacity that exists within the oil and gas producing states of the nation to support and conduct oil and gas research activities.
History: Originally approved September 2005 as resolution 05.092
Reauthorized September 2007 as resolution 07.091
Reauthorized October 2009 as resolution 09.101
RESOLUTION 09.102
Supporting Hydrocarbon Exploration and Development in the Coastal Plain of ANWR as part of the National Energy Policy
WHEREAS, the oil and natural gas industry is a vital part of the United States society and economy; and
WHEREAS, IOGCC supports conservation and use of alternative fuels, but recognizes that for the foreseeable future increased domestic oil production is needed to fuel the nation’s transportation system; and
WHEREAS, increasing domestic energy production and reducing dependence on foreign supplies are in the best interest of our nation’s strategic and economic well being; and
WHEREAS, the U.S. currently imports 60% of the nation’s needed oil. These oil imports cost more than $400 billion a year (this figure does not include the military costs of protecting that imported supply); and
WHEREAS, high energy prices are a major concern for the consuming public; and
WHEREAS, the Coastal Plain of ANWR (Federal 1002 Area) is one of America’s best possibilities for the discovery of several new oil and gas accumulations. U.S. Department of Interior estimates that the Area contains between 5.6 and 16 billion barrels of technically recoverable oil, of which 100% could be economically produced at market prices above $55 per barrel; and
WHEREAS, advanced technology has greatly reduced the “footprint” needed for Arctic oil development. If Prudhoe Bay were developed today, the footprint would be, 64% smaller (less than the size of an average airport); and
WHEREAS, only the 1.5 million acre Coastal Plain, 8% of ANWR is being considered for development. The remaining 17.5 million acres or 92% of ANWR will remain permanently closed to any kind of development as federally designated “wilderness”. If oil is discovered, less than 2000 acres of the over 1.5 million acres of the Coastal Plain will be allowed to be affected by surface development activities; and
WHEREAS, revenues to the state and federal treasury will be enhanced by billions of dollars from bonus bids, lease rentals, royalties and taxes attributed to development within the Coastal Plain of ANWR. Estimates in 2008 for bonus bids alone were $4 billion; and
WHEREAS, hundreds of thousands of good paying jobs will be created by development within the Coastal Plain of ANWR; and
WHEREAS, to date, North Slope oil field development expenditures for production activity have contributed well over $50 billion to the nation’s economy, directly impacting each state in the union; and
WHEREAS, the North Slope oil fields currently provide the U.S. with approximately 15% of its domestic production. Since 1988 this production has been on the decline. Peak production reached nearly 2 million barrels a day, but has declined to a current level of around 725,000 barrels a day; and
WHEREAS, the Trans-Alaska Oil Pipeline currently operates each day at much less than half of its design capacity; and
WHEREAS, government studies suggest that new production from the Coastal Plain of ANWR could produce a 10-year sustained rate of 1 million barrels per day, supplying nearly 30% of the nation’s domestic output, with production likely to continue for more than 25 years; and
WHEREAS, incremental production from the Coastal Plain of ANWR should help reduce price volatility in the U.S. market and reduce the nation’s outflow of funds for the purchase of oil; and
WHEREAS, oil and gas development and wildlife are successfully coexisting in Alaska’s Arctic. For example, the Central Arctic Caribou Herd at Prudhoe Bay has grown from 5,000 to over 32,000 animals during the last 30 years of operations; and
WHEREAS, more than 75% of Alaskans, including a majority of the residents of Kaktovik, the only Inupiat village on ANWR, favor exploration and production in ANWR. The Inupiat Eskimos who live in and near ANWR support onshore oil development on the Coastal Plain of ANWR.
NOW, THEREFORE, BE IT RESOLVED, that the Interstate Oil and Gas Compact Commission urges the President and Congress, in the national interest, to open the Coastal Plain of ANWR to hydrocarbon exploration and development.
History: Originally approved October 2003 as resolution 03.107
Reauthorized September 2005 as resolution 05.093
Reauthorized September 2007 as resolution 07.092
Reauthorized October 2009 as resolution 09.102
RESOLUTION 09.103
Encouraging the Increase of Students in Petroleum Specific Degree Programs and Research Projects
WHEREAS, the Interstate Oil and Gas Compact Commission continues to identify petroleum manpower and research needs; and
WHEREAS, the organization has developed recommendations for state, federal and industry actions published in reports such as Petroleum Pros and North Dakota’s Employment Growth: Oil Industry Focus; and
WHEREAS, a stable, adequate, and well-trained domestic petroleum workforce of both professional and blue collar workers is critical to continued environmentally sound development of natural gas and oil resources in the United States; and
WHEREAS, IOGCC will continue to address manpower needs, including encouraging and supporting efforts by the federal government and institutions of higher education; and
WHEREAS, research projects at the university level can result in valuable support and training of petroleum professionals as well as major advances in technology for exploration and production of natural gas and crude oil;
NOW, THEREFORE, BE IT RESOLVED, that the IOGCC, in accordance with the findings of the Petroleum Professionals Blue Ribbon Task Force, expresses its support of actions to increase the number of students in petroleum specific degree programs; and
BE IT FURTHER RESOLVED, that the IOGCC and its member states urges Congress to take action that will encourage institutions of higher learning to increase both the number of programs for students and of scholarships available for petroleum-specific degrees.
History: Originally approved September 2005 as resolution 05.095
Reauthorized September 2007 as resolution 07.093
Reauthorized October 2009 as resolution 09.103
RESOLUTION 09.104
IOGCC Resolution on Long-Term Natural Gas Contracting
WHEREAS, over the past 25 years, long-term commodity gas and gas transportation and storage transactions have declined; and
WHEREAS, the United States must continue to expand its natural gas infrastructure, to accommodate gas supplies from new sources, to meet growing demand and to provide storage accommodating higher peak demands; and
WHEREAS, without long-term shipping and storage commitments, financing of critical pipeline and storage infrastructure will be both difficult and expensive, resulting in a detrimental effect on future natural gas market conditions; and
WHEREAS, long-term contracting facilitates preferred, long-term financing for large projects and leads to more reasonable transportation prices ultimately borne by consumers; and
WHEREAS, a gas supply portfolio may prudently encompass long-term contracts for pipeline and storage capacity supporting new gas production sources and LNG terminals; and
WHEREAS, recent market conditions indicate long-term transactions may help assure that sufficient, reliable, affordable pipeline and storage capacity will be available to accommodate new gas supply sources from Alaska, offshore LNG sources and other areas; and
WHEREAS, a joint Interstate Oil and Gas Compact Commission/National Association of Regulatory Utility Commissioners task force in 2005 undertook research on this subject and has recommended a portfolio approach that includes both short and long-term gas supply and transportation transactions; and
WHEREAS, the National Association of Regulatory Utility Commissioners has adopted a similar policy statement and resolution;
NOW, THEREFORE BE IT RESOLVED, that the Interstate Oil and Gas Compact Commission urges state regulators to:
• Recognize the need for long-term transportation and storage contracts which attract long-term, preferred financing of additional gas transportation and storage infrastructure to accommodate future gas demand, while moderating natural gas prices; and
• Consider long-term contracting as a potentially appropriate ingredient in a gas utility’s portfolio strategy; and
• Encourage gas utilities to develop long-term strategies for capacity and supply contracts to access new and expanded natural gas and LNG supply sources; and
• Not discourage long-term transportation and storage contracts where the record merits their encouragement; and
• Consider pre-approval of long-term contracts.
History: Approved September 2007
Reauthorized October 2009 as resolution 09.104
RESOLUTION 09.105
Encouraging Construction of An Alaska Natural Gas Pipeline
WHEREAS, North America is dependent on reliable, reasonably priced energy supplies to support a healthy economy and ensure national security; and,
WHEREAS, demand for inexpensive natural gas is growing faster than demand for any other major energy source; and,
WHEREAS, U.S. natural gas consumption is currently more than 22 trillion cubic feet per year and may grow to exceed 29 trillion cubic feet per year by 2030; and,
WHEREAS, in response to relatively moderate natural gas prices, natural gas use in the electric generation sector may almost double by 2030; and,
WHEREAS, the largest discovered but undeveloped reserve of conventional natural gas in North America is the 35 trillion cubic feet on Alaska’s North Slope; and,
WHEREAS, the resource development infrastructure currently in place on Alaska’s North Slope has been responsibly established over more than thirty years thereby minimizing the incremental footprint required to commercialize known natural gas reserves; and,
WHEREAS, the likely reserves on the North Slope exceed 100 trillion cubic feet; and,
WHEREAS, Alaska is one of the most likely sources of future inexpensive and secure domestic supplies of natural gas; and,
WHEREAS, the massive, Alaska on- and off-shore energy resources provide the best opportunity for a rejuvenated domestic energy supply to support a national economic recovery during these challenging times; and
WHEREAS, the State of Alaska has taken the initiative through the Alaska Gasline Inducement Act (AGIA) to promote an Alaska gasline project that will assure access to all current oil and gas developers and future oil and gas explorers, at reasonable transportation costs, and has committed $500 million to assure a successful project;
NOW, THEREFORE, BE IT RESOLVED, the Interstate Oil and Gas Compact Commission (IOGCC) encourages the development of Alaska’s on- and off-shore energy resources and the Alaska Gasline to provide a clean, reliable energy source for North American markets.
History: Originally adopted as Resolution 01.123
Reauthorized as 03.103, October, 2003
Reauthorized as 07.096, September 2007
Reauthorized October 2009 as resolution 09.105
RESOLUTION 09.106
Supporting Continued Environmentally Responsible Development of
Shale Gas in the United States
WHEREAS, the United States relies on natural gas for 23 percent of its energy supply, and demand for natural gas as a clean-burning energy source is expected to increase in the upcoming decades; and
WHEREAS, natural gas, in addition to being a significant component of our energy supply, is a critical raw material used in many commercial, industrial, residential and agricultural applications, including chemicals, plastics, fertilizers, pharmaceuticals and others; and
WHEREAS, domestic production of natural gas is expected to increase as a share of U.S. supply from 84 percent in 2007 to 97 percent in 2030; and
WHEREAS, gas from shale formations is expected to be the fastest growing source of domestic natural gas supplies during the same timeframe; and
WHEREAS, concerns have been expressed over potential impacts of shale gas development associated with hydraulic fracturing, infrastructure, development in urban areas, and related issues; and
WHEREAS, the member states of the Interstate Oil and Gas Compact Commission (IOGCC) have effective regulatory systems that protect water, air, soils and other resources as well as public health and safety; and
WHEREAS, it is crucial for U.S. citizens, policy-makers, and lawmakers to understand the importance of shale gas to our economy and energy security, as well as the safeguards in place to minimize impacts from shale gas exploration and production; and
WHEREAS, the IOGCC has recently formed the Shale Gas Directors Task Force to address emerging issues associated with development of shale gas;
NOW, THEREFORE, BE IT RESOLVED, by the IOGCC, that shale gas development should be encouraged under conditions that protect the environment and public health and safety; and
BE IT FURTHER RESOLVED, that the IOGCC, while believing no further study is necessary, urges the EPA to provide for the states to participate as a partner should any new studies be undertaken on the impacts of hydraulic fracturing related to shale gas development; and
BE IT FURTHER RESOLVED, that the IOGCC urges the U.S. Department of Energy to continue to provide financial and technical support for the IOGCC to maintain and enhance initiatives supporting the safe and environmentally sound development of shale gas.
History: Submitted by James Welsh, Official Representative, Louisiana, October 1, 2009
Approved October 2009 as Resolution 09.106
RESOLUTION 09.107
Supporting State Regulation of All Forms of CO2 Geological Storage
WHEREAS, the Interstate Oil and Gas Compact Commission (IOGCC) in December 2002 established a Geological Sequestration Task Force and in October 2004 created the IOGCC Carbon Capture and Storage Task Force to examine the technical, policy, and regulatory issues related to safe and effective CO2 storage in the subsurface, whether for enhanced hydrocarbon recovery or for storage, and to prepare model regulatory guidelines concerning geologic storage to assist member states in regulating the injection and underground storage of CO2; and
WHEREAS, the IOGCC Carbon Capture and Storage Task Force will continue to develop safe and environmentally sound regulatory frameworks for all forms of geologic storage of CO2; and
WHEREAS, the Interstate Oil and Gas Compact Commission (IOGCC) has published recommended regulatory and statutory guidelines on geologic storage of carbon dioxide; and
WHEREAS, the U.S. Environmental Protection Agency (EPA), in consultation with IOGCC, the Ground Water Protection Council, and others, has proposed draft rules for geologic storage of carbon under the Underground Injection Control (UIC) program; and
WHEREAS, IOGCC member states are actively engaged in legislative and rule making activities that would recognize the concurrent storage of CO2 that occurs during the conduct of enhanced recovery projects utilizing CO2, with ultimate conversion to permanent geologic storage, and
WHEREAS, many potentially forthcoming federal regulatory frameworks addressing transportation, operation and long term liability of geologic storage of carbon dioxide, will in many cases, involve state-federal partnerships; and
WHEREAS, the private sector needs State assistance and support to develop Carbon Capture and Geologic Storage (CCGS) projects and having a framework for regulating all forms of geologic storage of CO2 is necessary for project development and financing; and
WHEREAS, given the regulatory and site specific geologic complexities of underground storage of carbon dioxide, associated property rights issues and the economic benefit to the states, regulation of the underground storage of CO2 will be most efficient at the state or multi-state level;
BE IT RESOLVED, that enhanced oil recovery with associated storage, geologic storage with incidental hydrocarbon production and geologic storage in non-hydrocarbon productive reservoirs, all constitute forms of geologic storage of carbon dioxide; and
BE IT FURTHER RESOLVED, that to provide industry and financial markets with a roadmap and facilitate project development in the States, the IOGCC encourages States, in conjunction with federal initiatives, to develop and adopt safe and environmentally sound regulatory frameworks for all forms of geologic storage of CO2 as a catalyst for industry to move forward with associated infrastructure and project development; and
BE IT FURTHER RESOLVED, that to ensure the States have the necessary flexibility in the implementation of future federal regulations, that those regulatory frameworks provide a mechanism for states to apply separately for primacy, allowing States discretion in determining which State agencies are most appropriate to administer any federal storage regulations.
History: Submitted by Lynn Helms, North Dakota, and Victor Carrillo, Texas, October 2, 2009
Approved October 2009 as Resolution 09.107
RESOLUTION 09.051
To Urge The Repeal Of Section 526 Of The Energy Independence And Security Act Of 2007 (Section 526) And To Oppose Prohibition Of Oil Sands-Derived Petroleum Products From Canada
WHEREAS, section 526 attempts to prohibit agencies of the government of the United States from purchasing liquid transportation fuels that are derived from the oil sands resources of Canada; and
WHEREAS, such a prohibition will reduce the supply of liquid fuels readily accessible to the United States at a time when America’s domestic sources of petroleum are in decline and when America’s imports from unreliable foreign sources have increased; and
WHEREAS, oil derived from Canadian oil sands now comprises more than 10% of all oil imported by the United States and projected increases in production from this source would greatly enhance North America’s energy security; and
WHEREAS, the U.S. military, now engaged in two wars, is the largest single purchaser of transportation fuels in the country; and
WHEREAS, oil from Canada’s oil sands is blended, without segregation, with other feedstocks at many refineries in the United States and such segregation is not feasible given current operations of refineries and blending by common carriers; and
WHEREAS, the U.S. military and agencies of the government lack the means for determining the content of the fuels they purchase, rendering compliance with the prohibition of oil sands-derived fuels impracticable; and
WHEREAS, no standards exist establishing benchmark values for the environmental characteristics of so-called “conventional” fuels against which section 526 would assess the characteristics of oil sands-derived fuels; and
WHEREAS, there are suggestions that the greenhouse gases associated with the production of so-called conventional fuels are rising as world petroleum supplies become steadily more viscous and sulphurous, while the greenhouse gases associated with production from oil sands are declining such that production from Canadian oil sands is predicted to generate comparatively lower levels of greenhouse gases in the foreseeable future; and
WHEREAS, Canada is the largest foreign supplier of energy to the United States, including 20% of U.S. oil imports; and
WHEREAS, Canada has not entered into large-scale contracts with Asian powers to supply oil derived from its oil sands despite repeated overtures from those powers to do so; and
WHEREAS, more that $16 billion has been invested by private enterprise in expanded production capacity for development of Canada’s oil sands and $15 billion per annum has been planned for expansion of pipelines and refinery capacity in this sector through 2018; and
WHEREAS, the North American Free Trade Act prohibits discrimination against the products of Canada by the United States; and
WHEREAS, section 526 contradicts and conflicts with section 369 of the Energy Policy Act of 2005, a more comprehensive law which identifies oil sands as important strategic resources, mandates their development in an environmentally responsible manner in collaboration with the governments of Canada and Alberta, and directs the U.S. Department of Defense to support such a development program with long-term purchase contracts; and
WHEREAS, numerous national oil producer, consumer, and academic organizations have asked Congress to repeal this section 526 law,
NOW, THEREFORE, BE IT RESOLVED, by the Interstate Oil and Gas Compact Commission, that section 526 of the “Energy Independence and Security Act of 2007” should be repealed and that the prohibition on the use of oil sands-derived petroleum products by agencies of the United States government should be rescinded.
RESOLUTION 09.011
Urging Congress Not To Remove Exemption Of Hydraulic Fracturing From Provisions Of The Safe Drinking Water Act
WHEREAS, the United States Congress passed the Safe Drinking Water Act ( 42 U.S.C. § 300h) (SDWA) to assure the protection of the nation’s drinking water sources; and,
WHEREAS, since the enactment of the SDWA, the EPA had never interpreted hydraulic fracturing as constituting “underground injection” within the SDWA; and,
WHEREAS, the United States 11th Circuit Court of Appeals ruled that hydraulic fracturing constituted “underground injection” under the SDWA (Legal Environmental Assistance Foundation v. United States Environmental Protection Agency (EPA), 118 F3d 1467 (11th Cir. 1997)); and,
WHEREAS, in 2004, EPA published a final report summarizing a study to evaluate the potential threat to underground sources of drinking water (USDWs) from hydraulic fracturing of coalbed methane (CBM) production wells and EPA concluded that “additional or further study is not warranted at this time . . .” and “that the injection of hydraulic fracturing fluids into CBM wells poses minimal threat to USDWs.”; and,
WHEREAS, the United States Congress, in the Energy Policy Act of 2005, explicitly exempted hydraulic fracturing from the provisions of the SDWA; and,
WHEREAS, the IOGCC conducted a survey of oil and gas producing states which found that there were no known cases of ground water contamination associated with hydraulic fracturing; and,
WHEREAS, hydraulic fracturing is currently, and has been for decades, a common operation used in exploration and production by the oil and gas industry in all the member states of the Interstate Oil and Gas Compact Commission (IOGCC) without groundwater damage; and,
WHEREAS, approximately 35,000 wells are hydraulically fractured annually in the United States and close to one million wells have been hydraulically fractured in the United States since the technique’s inception, with no known harm to groundwater; and,
WHEREAS, the regulation of oil and gas exploration and production activities, including hydraulic fracturing, has traditionally been the province of the states; and,
WHEREAS, the SDWA was never intended to grant to the federal government authority to regulate oil and gas drilling and production operations, such as “hydraulic fracturing,” under the Underground Injection Control program; and,
WHEREAS, the member states of the IOGCC have adopted comprehensive laws and regulations to provide for safe operations and to protect the nation’s drinking water sources, and have trained personnel to effectively regulate oil and gas exploration and production; and,
WHEREAS, production of coal seam natural gas, natural gas from shale formations and natural gas from tight conventional reservoirs is increasingly important to domestic natural gas supply and will be even more in important in the future; and,
WHEREAS, hydraulic fracturing plays a major role in the development of virtually all unconventional oil and gas resources and, thus, should not be limited in the absence of any evidence that such fracturing has damaged the environment; and,
WHEREAS, regulation of hydraulic fracturing as underground injection under the SDWA would impose significant administrative costs on the state and substantially increase the cost of drilling oil and gas wells with no resulting environmental benefits; and,
WHEREAS, regulation of hydraulic fracturing as underground injection under the SDWA would increase energy costs to the consumer,
NOW, THEREFORE, BE IT RESOLVED, the IOGCC hereby declares its support for maintaining the exemption of hydraulic fracturing from the provisions of the SDWA and urges the Congress of the United States to not pass legislation that removes the exemption for hydraulic fracturing.