Date: 04/22/2015
Final
Presentation from the American Petroleum Institute on Oil and Gas Issues
HOUSE COMMITTEE ON TRANSPORTATION & ENERGY
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02:00 PM -- Presentation from the American Petroleum Institute on Oil and Gas Issues
Tracy Bentley and Dr. John Felmy of the American Petroleum Institute (API), and Jim Bennett of Ponderosa Advisors, came to the table to present to the committee on oil and gas issues. Dr. Felmy explained that the API is a trade association that was formed by the federal government in 1921 to address oil and natural gas industry issues and companies. He provided a history of oil production in the United States, and discussed: the changes in oil prices in the past 40 years; the shale oil resources that exist throughout the U.S.; how the U.S. is the largest producer of natural gas in the world; how world oil demand is still growing; the link between gasoline and crude oil prices; and other factors affecting the price of oil.
Dr. Felmy discussed oil and natural gas price, supply, and demand forecasts that are published by the Energy Information Administration (EIA) on a monthly basis. He said that Colorado competes with other states for oil and natural gas production, and that it is above the average for cost per foot for drilling. He spoke to lease production in the state, the impacts upon the economy of recent increases in natural gas production, the energy mix of the U.S. and which sectors demand the most energy, future U.S. and global energy demand, how renewable sources of energy will factor into the energy supply, and the potential for crude oil exports by the U.S.
02:32 PM
Mr. Bennett discussed U.S. natural gas and crude oil production in 2014, how oil and natural gas use have become more interconnected in the past five years, how lower natural gas prices slow crude production growth, how Rocky Mountain basins are predicted to lose market share in the crude market, how low crude oil prices will impact natural gas production, recent geographic changes in U.S. natural gas production, and the pipeline assets of the U.S.
02:47 PM
Mr. Bennett discussed the interplay between natural gas drilling and the price of crude oil, focusing on declining production rates in the Rockies region. He spoke to how supply and demand affect government revenue, how some counties in Colorado are dependent upon the property taxes paid by the oil and gas industry, and how recent reductions in natural gas production have affected industry employment. Mr. Bennett and Dr. Felmy responded to questions on whether there are incentives for the U.S. to export crude oil given market conditions and the Keystone XL pipeline.