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Energy Tomorrow Blog

Encana’s Suttles: Keeping Sight of Energy’s Benefits

encana  analysis  shale energy  oil and natural gas development  unconventional oil  unconventional gas  canada  hydraulic fracturing  horizontal drilling  economic growth  investments  technology innovation 

Mark Green

Mark Green
Posted May 12, 2015

Encana President and CEO Doug Suttles participated in the U.S. Chamber of Commerce’s CEO Leadership Series last week with a luncheon address and a Q&A session with Linda Harbert of the Institute for 21st Century Energy. Highlights of the conversation below. Suttles joined Alberta-based Encana as president and CEO in June 2013. He has 30 years of oil and natural gas industry experience in various engineering and leadership roles. Before joining Encana, Suttles held a number of leadership posts with BP, including chief operating officer of BP Exploration & Production and BP Alaska president.  

Q: You opened your talk by saying I’m a North American energy company. … Can you shed a little light on the differences and similarities between operating in Canada and the U.S.?

Suttles: They’re not as big as many people would think. First of all, in the places we operate – Colorado, Wyoming, New Mexico, Texas, Louisiana and Mississippi, and then Alberta and British Columbia – these are all natural resource states, and they understand that and I think the people and political leaders understand the importance, too. Both countries have high environmental expectations.

Probably the biggest difference you’d really see between them is the remoteness of operations, which creates a unique challenge in Canada. Many of our operations are away from large towns and cities … But you have an environment where I think people understand the benefits of our industry. They promote the industry, they support it.

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Energy’s Benefits to Investors and Consumers

news  investments  pension plans  epa  gasoline prices  energy exports  oil and natural gas production 

Mark Green

Mark Green
Posted April 29, 2015

Rigzone: For every $1 that public pension funds allocated to oil and gas assets in 2005, investors saw a return of 130 percent in 2013, about double their returns on other investments, according to a new study from the American Petroleum Institute and Sonecon LLC.

“The lesson, frankly, from this analysis is that pension plans would be in better shape if they increased the share they invest in oil and gas,” said Robert Shapiro, a co-author of the report, said during a conference call with reporters. 

Shapiro found that the funds invested an average of 4 percent of their assets in oil and gas, which yielded 8 percent of the returns. The study reviewed the returns of the two largest funds — those owned by public school employees and state workers in every case — for each of 17 states, which included California, Florida, New Mexico and West Virginia for the eight-year period from 2005 to 2013.

“All of these pension plans have been under serious economic stress since 2008. Thirty-five states have enacted changes that will change benefits,” Shaipro said, adding that when the plans’ returns are higher, there is less pressure on them to reduce benefits.

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The Soundness of Investments in Oil and Natural Gas

analysis  oil and natural gas investments  stocks  pension plans  api  access  regulation 

Mark Green

Mark Green
Posted April 28, 2015

New analysis of the performance of oil and natural gas stocks in public pension funds shows the importance of a healthy energy sector to the futures of millions of Americans – as well as the misguided nature of efforts to force institutions to end investments in oil and natural gas.

The first strengthens our country’s economy and makes more secure the future for a broad swath of people – starting with retired teachers, police officers and firefighters, among others – while the second most likely would do harm to a lot of regular Americans. ...

“In short, returns on state pension funds from investments in oil and natural gas companies provide strong earnings for public pension retirees, including America’s teachers, firefighters and police officers, according to the study,” said Kyle Isakower, API vice president of regulatory and economic policy, who briefed reporters during a conference call.

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America’s Oil and Natural Gas Industry Benefits Americans

oil and natural gas industry earnings  economic benefits  stock ownership  pension funds  mutual funds  iras  401k  retirement funds  investments 

Mark Green

Mark Green
Posted October 21, 2014

Sonecon’s updated look at ownership of the U.S. oil and natural gas industry shows that the benefits of a successful, rigorous industry sector continue to accrue to a broad range of Americans – who are the industry’s true owners. Here’s what we mean by broad:

  • Public and private pension and retirements plans, including 401(k)s and IRAs, hold 46.8 percent of all shares of U.S. oil and natural gas companies in 2014.
  • Asset management companies, including mutual funds, hold 24.7 percent of oil and natural gas shares.
  • Individual investors hold 18.7 percent of all oil and natural gas company shares.

Combined, that’s 97 percent of all oil and natural gas company stock – held by millions of Americans across the country.

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Surging Energy = Surging Investment and Jobs

shale energy  marcellus natural gas  investments  income  hydraulic fracturing  horizontal drilling 

Mark Green

Mark Green
Posted October 15, 2014

Natural gas production in the Marcellus Shale continues to surge – and with it, industry spending on construction and maintenance, according to a new study.

The latest drilling productivity report from the U.S. Energy Information Administration (EIA) projects Marcellus natural gas output will hit 15,828 million cubic feet per day (mcf/d) or about 37.1 percent of production from the major U.S. shale plays. EIA expects Marcellus output will top 16,000 mcf/d in November.

The production gains are reflected in industry spending on workers in construction and maintenance from 2008 to 2014 – the subject of the new study by the Oil and Natural Gas Industry Labor-Management Committee. The study showed spending grew more than 60 percent between 2012 and 2013, reaching $5 billion, resulting in a 40 percent increase in jobs in eight trades (union and non-union members included). Another $6.5 billion already is committed for 2014, the study reports.

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Crude Oil Exports and Consumers

crude oil  energy exports  economic benefits  gasoline prices  job creation  manufacturing  investments  refineries 

Mark Green

Mark Green
Posted October 14, 2014

A new study by the Aspen Institute joins a series of analyses concluding that one benefit from exporting U.S. crude oil would be lower gasoline prices here at home. Aspen’s projected reduction of between 3 and 9 cents per gallon parallels findings in previous major studies by ICF International (3.8 cents per gallon), IHS (8 cents) and Brookings/NERA (7 to 12 cents) that exports would lower pump prices.

Aspen and the other studies project other benefits from exporting crude oil, including broad job creation, economic growth and increased domestic energy production. Yet the solidifying consensus that consumers also would benefit is critically important as the public policy debate on oil exports continues.

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You Didn’t Build That, Mr. President

oil and natural gas development  access  energy investments  job creation  energy exports 

Mark Green

Mark Green
Posted October 3, 2014

Here’s the president, lauding the lift America’s domestic energy revolution has provided the nation’s economy in a speech this week in Illinois:

“The first cornerstone is new investments in the energy and technologies that make America a magnet for good, middle-class jobs. So right off the bat, as soon as I came into office, we upped our investments in American energy to reduce our dependence on foreign oil and strengthen our own energy security.  And today, the number-one oil and gas producer in the world is no longer Russia or Saudi Arabia.  It’s America. For the first time in nearly two decades, we now produce more oil than we buy from other countries.  We’re advancing so fast in this area that two years ago I set a goal to cut our oil imports by half by – in half by 2020, and we’ve actually – we will meet that goal this year, six years ahead of schedule.” 

It’s good to hear the president talking about the benefits to America of resurgent oil and natural gas production here at home. He’s right: The United States is the world’s No. 1 producer of natural gas and is poised to be No. 1 in oil production. He’s also right that this domestic output has cut imports significantly, putting America on a path to zero net imports in the foreseeable future – a good bench mark for something everyone wants: genuine U.S. energy security.

Now let’s talk plainly.

These energy developments and their benefits have occurred without much help from this White House. They’ve happened even as the president’s actions and those of his administration have fallen well short of his “all-of-the-above” rhetoric on energy.

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Investing in America

oil and natural gas investments  infrastructure  job creation  economic growth  access 

Mark Green

Mark Green
Posted September 15, 2014

It’s one thing to talk about energizing the U.S. economy, it’s another to walk the talk. America’s oil and natural gas industry is doing that, with four companies ranked in the top 10 of the Progressive Policy Institute’s list of leaders in U.S. capital spending in 2013.

ExxonMobil ($11.07 billion), Chevron ($10.56 billion), ConocoPhillips ($6.35 billion) and Occidental Petroleum ($5.5 billion) ranked in the top 10 in U.S. capital spending – expenditures for plants, property and equipment. Also significant: The same four are in the top 10 of cumulative U.S. capital spending over the three years (2011-2013) PPI has compiled its “investment heroes” list.

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Activists vs. Reality: Economic Growth, Human Progress Won't Be Stranded

oil and natural gas development  oil and natural gas investments  energy reserves  economic growth 

Mark Green

Mark Green
Posted July 22, 2014

Interesting question: Might climate change laws and regulations negatively impact the value of oil reserves held by energy companies, to the point of “stranding” them, ultimately affecting shareholders? Two companies, ExxonMobil and Shell, essentially have told their shareholders, no – because projected increases in global energy demand will continue to require all viable energy sources, including oil and natural gas, into the foreseeable future. From ExxonMobil’s report to shareholders:

For several years, our Outlook for Energy has explicitly accounted for the prospect of policies regulating greenhouse gas emissions (GHG). This factor, among many others, has informed investments decisions that have led ExxonMobil to become the leading producer of cleaner-burning natural gas in the United States, for example. Based on this analysis, we are confident that none of our hydrocarbon reserves are now or will become “stranded.” We believe producing these assets is essential to meeting growing energy demand worldwide, and in preventing consumers – especially those in the least developed and most vulnerable economies – from themselves becoming stranded in the global pursuit of higher living standards and greater economic opportunity.

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LIFO Repeal Could Have Devastating Effect on Jobs

lifo  tax increases  oil and natural gas production  investments  manufacturing 

Mark Green

Mark Green
Posted June 4, 2014

If you run a business that sells things produced from raw materials – manufacturers, retailers, wholesale distributors and car and equipment dealers and other industries – chances are good you’re familiar with “LIFO” accounting. The IRS first approved the “last-in, first-out” method for use by taxpayers with inventories in the 1930s. Repealing LIFO, as some in Congress are proposing, could impact the more than 30 percent of U.S. companies, large and small, that use it, as well as the larger economy.

That’s the message a bipartisan group of 113 U.S. House members conveyed in a recent letter to Ways & Means Committee Chairman Dave Camp, who has proposed LIFO repeal as part of his larger tax reform package.

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