Thu August 4, 2011

Oil and Gas Officials Pitch Weary Public

Oil and gas industry leaders say support for cleaner-burning natural gas is on the rise among policymakers in western states.  But officials attending the Colorado Oil and Gas Association’s annual meeting say support for actually extracting the natural gas on western lands is another story.

As the former CEO of Shell Oil and now head of a group called “Citizens for Affordable Energy”, John Hofmeister considers this puzzling dilemma every day.  It seems like everyone is jumping on the natural gas bandwagon right now, so why then is the actual extraction of it still so controversial? 

Hofmeister blames his own industry.

"The starting point of the energy business, is, has been and will be, public acceptance, public tolerance, public understanding," Hofmeister said as part of a panel discussion Wednesday.

He went on to say that the industry’s business model is skewed; companies should be putting engagement with the public and policymakers before shareholders.  He said that will go a long way to winning development support in gas-rich states like Colorado. 

The number of oil and gas permits issued has declined precipitously after being at an all time high during the Bush Administration, even as Colorado has pushed an ambitious plan to retire coal-fired power plants and replace them with natural gas. 

This fact was not lost on other panelists like former Governor Bill Owens (R-Colorado), who said the problem isn’t industry, it’s the government. 

"This administration simply doesn’t understand or appreciate the role of the private sector in our economic system all too often," Owens said.

Owens, who also served as head of various petroleum groups and boards before becoming governor, said the Obama Administration seems to only be focused on regulating and taxing the industry.

But supporters of the administration said the very role of the federal government is to regulate the industry and ensure that a balance is struck between development and the environment. 

Jim Martin, the former Colorado Department of Natural Resources director who now heads EPA’s Region 8 in Denver, said that is a constant mission in his office. 

"We are spending a tremendous amount of time and a lot of our resources in Region 8 trying to find ways in which we can promote responsible development of natural gas in a number of different basins here in Region 8," Martin said.

The annual conference wraps up later today.