Extracting American oil and natural gas by way of horizontal drilling, or hydraulic fracturing, is creating hundreds of thousands of jobs across the nation.
“The industry is going into regions of the country that haven’t experienced energy development for decades,” Watford said. “Oil and gas development is no longer confined to Texas, Oklahoma and Alaska. Independent producers are now producing from shale plays in Pennsylvania, North Dakota, California and beyond.”
Watford, who serves as chairman, president and CEO of Ultra Petroleum Corp., has enjoyed a full range of industry experiences during his 37-year career for a number of energy companies, including Shell Oil, Superior Oil, Meridian Oil (Burlington Resources), Torch Energy and Nuevo Energy. As chairman of IPAA, a national upstream trade association representing thousands of oil and natural gas producers, Watford advocates members’ views before Congress, the administration and federal agencies.
“IPAA has represented independent oil and natural gas producers and service companies for over 80 years,” said Watford. “IPAA serves as an informed voice for the E&P segment of the industry.”
Recently, IPAA embraced new media, from social networking to storytelling via Web video.
“To present a true account of shale gas production in Pennsylvania, IPAA’s education and public outreach arm, ‘Energy In Depth,’ launched the movie ‘Truthland,’” said Watford. “It’s a first-of-its-kind project to interview those truly impacted by responsible natural gas development.
“We also launched microsites to help engage policymakers, media and the general public on our key issues, as well as www.EnergyTaxFacts.com and www.ESAWatch.org. These programs, respectively, look at the industry’s tax provisions and the challenges presented by the Endangered Species Act. Another addition is IPAA TV on our website, including IPAA member interviews, staff policy updates and events.”
A shift in perspective
According to Watford, the nation has undergone a perspective shift in the U.S.’ energy future.
“This is the American energy experience, and it’s encompassed in the spirit of the wildcatters,” he said. “No matter what challenges Washington throws our way, IPAA will continue fighting for the success of America’s independent producers.”
IPAA’s fight includes three priorities in regard to Congress.
“First, we need to tackle proposed federal regulations that could harm the industry and make E&P more costly and more complicated,” Watford said. “Second, IPAA will advocate for lifting the U.S. ban on crude oil exports. And third, we will promote job creation not only within our industry but also focus on the thousands of indirect jobs created with expanding production.”
With deep partisanship in Congress, Watford believes very little is going to get done in regard to energy policy.
“To fill this empty space, the administration has directed federal agencies to consider new regulations and rules it can implement without congressional consent,” he said. “Right now, there are about a dozen agencies looking at new rules just on hydraulic fracturing.
“For example, the Department of Interior’s Bureau of Land Management (BLM) is moving forward on a proposal to implement a one-size-fits-all set of regulations on hydraulic fracturing on federal lands. This blanket rule disregards the states’ programs that are already working and would result in lost jobs, reduced energy supply and decreased investment as independent producers abandon their plans to develop on federal lands. IPAA has filed numerous rounds of comments to BLM and has supported legislation in the House of Representatives to curb the proposed rule.”
Crude oil exports is also a high priority for the association.
“America’s expanding production of shale crude oil is a good news story, but it could be better,” Watford explained. “If federal policymakers make mistakes like continuing the ban on crude oil exports, its benefits could be lost. While media attention on crude oil exports has increased dramatically over the past six months, it’s an issue that requires a carefully constructed advocacy strategy.
“The laws that govern crude oil exports are outdated. They are built upon a world view from the mid-1970s. Changing these laws requires an Act of Congress and given the ongoing gridlock in Congress, laws are unlikely to be revised. Consequently, the power to determine the scope of crude oil exports will rest with the administration. The administration has limited options it can take, but some of them would significantly facilitate the ability to export crude oil. One of IPAA’s objectives is assuring decisions on crude oil exports are based on national policy interests, not political expediency.”
Independent producers create jobs
Onshore independent producers supported 2.1 million jobs in 2010, a figure that will rise by 500,000 new jobs to 2.6 million jobs by 2020, according to IHS Global Insight reports.
“These jobs created in the oil and natural gas industry tend to be high quality and high paying, given the technologically innovative nature of unconventional oil and gas activity,” Watford said. “The average upstream oil and natural gas job pays roughly seven times the federal minimum wage.”
In 2011, IPAA commissioned a study on the impact of independent E&P firms on the U.S. economy. The association found industry was responsible for 4 million direct, indirect and induced jobs in 2010, or 3 percent of total U.S. employment.
“Our industry plays a critical role in the U.S. economy, yet these economic figures alone understate the vital role of domestic energy production,” Watford said. “As the U.S. continues to increase energy production using efficient and sustainable methods, our industry literally fuels the U.S. economy, improving economic and national security by reducing our dependence on foreign producers.
“The story of independent producers continues to be one of navigating difficult and often unpredictable economic and regulatory hurdles. However, the industry has remained strong amidst sluggish economic growth, and there is reason for optimism looking forward.”
Investing in the future
IPAA’s Energy’s Emerging Leaders program, which was launched in 2012, offers exclusive memberships and career development opportunities for students and young professionals under the age of 35. The program has already enrolled more than 1,000 members and hosted events around the country.
“Thanks to the high school Petroleum Academies and our partnership with the Petroleum Equipment Suppliers Association, we now have more than 1,000 students in Texas taking classes in engineering, geo-sciences, cutting-edge technology and professional development. The program has provided well over $475,000 in scholarships.”
Through IPAA’s leadership, Watford hopes to expand the association’s education campaigns that promote the importance of independent oil and natural gas producers, as well as the need for a more balanced American energy policy.
“While some longer-standing legislative issues remain unresolved, there are opportunities ahead for forging balanced and optimal energy policy,” he said. “It is our responsibility to demonstrate the importance of American oil and natural gas production and, moreover, the importance of the independent producers in the American economy.”
For more information, visit www.ipaa.org or call (202) 857-4722.
