WATCHING GOVERNMENT: Meantime, back in the states...

Nov. 20, 2006
North Dakota Gov. John Hoeven became chairman of the Interstate Oil & Gas Compact Commission at the group’s annual meeting in Austin in late October and immediately announced several objectives.

North Dakota Gov. John Hoeven became chairman of the Interstate Oil & Gas Compact Commission at the group’s annual meeting in Austin in late October and immediately announced several objectives. They include an initiative to continue emphasizing states’ roles in national energy policies and security, continued efforts to reduce energy manpower shortages, and support for Wyoming Gov. Dave Freudenthal’s oil price differentials task force.

“The United States is the major supplier of natural gas and oil to the United States. We often lose sight of the abundant natural resources existing in this country and their huge importance to our citizens,” Hoeven said.

Freudenthal’s task force is examining price anomalies in the Rocky Mountains and Northern Plains. “The price differential has resulted in creating unnecessary uncertainty for mineral owners and companies that are willing to explore and produce in our part of the country,” said Hoeven. The task force is expected to have a report prepared by the end of 2006.

Four resolutions

Four resolutions came out of the meeting of officials from 37 states. The first called for an energy policy that would provide access to federal lands, support and encourage research and development, enhance the oil and gas transportation infrastructure, and support each state’s right to oversee oil and gas regulation.

IOGCC noted that domestic gas demand is expected to increase 60% by 2020 and that currently inaccessible acreage contains more than 65% of the country’s undiscovered onshore oil resources and 40% of its undiscovered gas.

The group’s second resolution urged the US Department of Energy to support regulations that enable the development of safe carbon dioxide storage in underground geologic formations. It also urged the US Environmental Protection Agency to work with IOGCC in its carbon capture and storage efforts.

Under the third resolution, IOGCC said it plans to continue helping the oil and gas industry meet its labor needs, an effort that began with a task force Hoeven led.

Plugging orphan wells

The fourth resolution urges Congress to establish funding for the reclamation of orphan wellsites. Unplugged abandoned wells and associated facilities can cause pollution and other hazards, and states that already have established programs to plug them receive no federal help.

IOGCC also released its 2006 report on marginal wells, which it said accounted for nearly 17% of the oil and 9% of the gas produced onshore in the US during 2005. Marginal gas wells produced more than 1.76 tcf last year as average daily production reached a 10-year peak.

The report noted that research remains important to these wells’ continued productivity and that appropriations committees in the US House and Senate proposed eliminating oil and gas research in DOE’s Office of Fossil Energy.

“The small independent producers who operate marginal wells many times do not have the means to conduct their own research,” IOGCC Executive Director Christine Hansen said.