Subpanel Republicans tout benefits of boom, Democrats warn of potential busts

E&E News
By Dylan Brown
June 19, 2014

When Louisiana Republican John Fleming first ran for Congress in 2007, a tour of Desoto Parish gave him pause.

"What am I getting myself into?" he recalled thinking at a House Natural Resources subcommittee hearing yesterday. "I could foresee in the future an endless line of people at my door begging for money."

The parish of 30,000 residents tucked away in the northwest corner of the state near the Texas border "was closed for business" at the time, he said. But Fleming brought Desoto Sheriff Rodney Arbuckle to Washington, D.C., yesterday to tell the story of what happened after the discovery of the Haynesville Shale in 2008.

Overnight, struggling farmers became millionaires, Arbuckle said.

"Thousands of Jed Clampetts, I like the sound of that," Fleming said.

Rep. Doug Lamborn (R-Colo.), chairman of the Subcommittee on Energy and Mineral Resources, likewise touted the energy security, job creation and economic development at the local level from the oil and natural gas boom. Yesterday's hearing was one in a series on "American Energy Jobs," with a look at the impacts discoveries like the Haynesville are having on communities nationwide.

"Along with increased federal revenue, energy production on federal, state and private land has allowed states and localities to increase their tax base," he said. "As a result, citizens in regions with robust energy development sectors benefit tremendously."

Lamborn touted the results of a new study from consulting firm IHS Global presented to the committee by senior consultant Philip Hopkins. The American Petroleum Institute retained IHS to expand an earlier study showing that more domestic energy production translated to the average U.S. household saving $1,200 in 2012 thanks to lower prices.

According to the report, state and local governments in the United States saved $467.2 million on electricity and $252.9 million on natural gas.

Lea County, N.M., now has 15,049 oil wells, and County Commissioner Ron Black testified that translates into almost 14,000 jobs and $3.6 million for federal, state and local coffers, directly from the oil and gas industry.

But it also comes at a price, he added. As in other boom areas, Black said the influx of workers and equipment takes its toll on roadways and strains existing resources like health care facilities.

"Our hotels have become residences," he said.

Black called on Congress to work on legislation to provide more affordable housing, while also allowing the boom to continue by removing burdensome regulations.

When asked by Lamborn about what the chairman labeled "obstructionist" federal policies, Black and Kevin Carter, director of Utah's School and Institutional Trust Lands Administration, both cited expanding endangered species protections as threats to economic growth in their regions.

Carter's administration manages mineral rights on state-owned trust land that have generated $518 million in taxes, primarily for schools. The interplay between trust lands and federal lands that could become wilderness, however, have hampered resource exploration, he argued.

"Certainly the federal government has the right to manage its lands to achieve its own goals," Carter said. "But it's tragic that nearly one-third of the lands granted to the state for the exclusive financial benefit of its schoolchildren are effectively sterilized by their federal actions."

Carter said he is a strong supporter of legislation put forward by Rep. Rob Bishop (R-Utah) and supported by Natural Resources Committee ranking member Peter DeFazio (D-Ore.) to allow the transfers of trust lands "captured" within federally protected areas for other parcels that could help Carter fulfill his administration's mission of generating more revenue.

Subcommittee ranking member Rush Holt (D-N.J.) said the benefits of the burgeoning energy sector were undeniable, but he offered up a counterpoint.

"Where there are booms there are also busts," he said. "We should be looking to oil and gas drilling where it is appropriate, but not as a savior of our local economies."

He pointed to other solutions to help local governments.

"Improvements in energy efficiency we see have supplied more energy than domestic coal and natural gas and oil combined, and this is likely to be a long-lasting and increasing trend," he said. "Even though in some places the oil and gas drilling is large, this can be even larger."

Kateri Callahan, the president of the "fuel-neutral" Alliance to Save Energy, testified that implementing energy efficiency strategies could not only save the localities money but create jobs.

"I think that we can all agree that even if energy is cheap, which it isn't in a lot of places, there's no good reason to waste it," she said. "Energy efficiency ... remains our nation's most abundant, affordable and readily available energy resource."

The alliance is pushing a "policy roadmap" that seeks to double the energy productivity in the United States by 2030. Callahan said that reduction in waste could save American families $1,000 a year on their energy bills, create 1.3 million jobs and reduce the cost of imports by $100 billion.