American Oil and Gas Reporter - January 2015 - 227

"Crude oil price volatility notwithstanding, there have been many positive
developments with HVHF rules and IDNR
changes, as well as in the governor's office," Richards points out. "We want to

emphasize these positives. Last year,
more than 1,000 people attended our annual meeting, which is pretty remarkable,
given the size of our industry. We only
do one big event each year, but we do it

right."
For information or to register, contact
IOGA, P.O. Box 788, Mt. Vernon, Il.
62864; phone 618-242-2857; or visit
www.ioga.com.
Ì

PIOGA Prepares For Its Winter Meeting
WEXFORD, PA.-Even though the
particulars of the two-day agenda are
still in the works, the winter meeting of
the Pennsylvania Independent Oil & Gas
Association will be a great venue for
hearing the latest news on several topics,
PIOGA President and Executive Director
Lou D'Amico promises.
The gathering is set for Feb. 24-25 at
the Seven Springs Mountain Resort in
Champion, Pa.
"There will be quite a few highlights,"
D'Amico says. "For example, we will
discuss the expected impact of newly

elected Governor Tom Wolf's policies
on our industry. We also will address the
oversupply of natural gas in our state
and nationwide, and our association's efforts to create and increase natural gas
demand.
"These issues and others are important
to all our members because they are important to the overall profitability and viability of the oil and gas industry in
Pennsylvania," he continues. "The focus
at this winter meeting and all other association events is the long-term vitality of
the industry in our state."

The agenda includes a sporting clay
shoot on Monday, Feb. 23, and a dinner
and Monte Carlo Night on Tuesday, Feb.
24. "These will be fun activities, and we
have some great prizes for Tuesday night,"
D'Amico says. "We encourage our members to join us for the business and leisure
portions of this winter meeting."
For more information or to register,
contact PIOGA at 115 VIP Drive, Suite
210, Northridge Office Plaza II, Wexford,
Pa. 15090; phone 724-933-7306 ext. 22;
or visit www.pioga.org.
Ì

CBO Touts Benefits Of Crude Exports
WASHINGTON-Technical advances
in hydraulic fracturing and horizontal
drilling are opening large deposits of
shale resources, and the Congressional
Budget Office predicts removing export
barriers for the increasing flood of crude
coming from U.S. shale plays could incentivize higher domestic production,
grow the economy, increase federal revenues, and exert downward pressure on
gasoline prices.
Virtually nonexistent a decade ago,
tight oil and shale gas formations now
produce almost 3.5 million barrels of
light oil a day and 9.5 trillion cubic feet
of shale gas each year, CBO says in its
study, The Economic and Budgetary Effects of Producing Oil and Natural Gas
from Shale. Those amounts equal 30 percent of U.S. liquid fuels production and
40 percent of domestic gas production,
the CBO calculates.
Production of tight oil and shale gas
will continue to grow over the next 10
years, the U.S. Energy Information Administration projects. Oil production from
shale formations will be 1.4 MMbbl/d
higher in 2020 than in 2013, but only
200,000 bbl/d more in 2040 than in 2013,
while shale gas output will rise from 9.5
Tcf in 2013 to 20.0 Tcf by 2040. Another
EIA estimate shows the amount of tight
oil and shale gas in the United States that
could be extracted with current technology
would satisfy domestic oil consumption
at today's rates for eight years, and satisfy
U.S. gas needs for 25.

Shale gas has affected U.S. energy
prices more strongly than tight oil has,
CBO says, adding it predicts it will continue to do so. CBO projects that if shale
gas did not exist, by 2040 natural gas
prices would be 70 percent higher, whereas
if tight oil did not exist, oil prices would
be only about 5 percent higher. It says
one reason for the difference is that shale
gas is more plentiful than tight oil, relative
to the size of their domestic markets; another is that the North American gas
market is relatively insulated from conditions elsewhere by high transportation
costs while oil is traded in a global market.
Exporting Oil And Gas
Several U.S. legislators are proposing
changes to policies governing exports of
crude oil and liquefied natural gas. CBO
predicts allowing exports likely would
increase domestic production, but would
have only a small effect on U.S. gas
prices and a negligible impact on domestic
oil prices.
In 2013, federal law blocked exports
of domestically produced crude oil except
for 120,000 barrels a day delivered to
Canada. CBO points out there are no restrictions on U.S. exports of refined petroleum products, natural gas plant liquids,
biofuels or other nonpetroleum liquids.
Exports of those fuels totaled 3.6 million
barrels a day in 2013, with about half of
that volume consisting of gasoline and
diesel fuel.

According to the report, because U.S.
crude oil supplies have grown so much,
some policymakers are advocating repealing the export ban. The CBO report's
release came in the same week that Representative Joe Barton, R-Tx., introduced
HR 5814, which would repeal federal
prohibitions on oil exports, and the House
Committee on Energy and Commerce
held hearings on the 1975 law that bars
crude exports.
CBO says an alternative is changing
policy to allow exports to countries other
than Canada-such as Mexico, nations in
Central America or all countries with
which the United States has free-trade
agreements. Another option, it says, is
allowing exports of particular grades of
crude oil.
If the United States opted to totally
repeal its export ban, CBO projects the
move would slightly lower world prices
of oil and liquid fuels, noting that the increase in total supply probably would be
much smaller than the increase in the
volume of U.S. crude exports. CBPO
cites one study that estimates that if the
ban was repealed, U.S. crude exports
would increase by as much as 1.5 MMbbl/d, but world supply would increase by
no more than 200,000 bbl/d, less than
0.025 percent of the current total. CBO
points to two factors to explain the difference:
* What contributes to the total global
oil supply is not U.S. exports but U.S.
production, which would rise much less
JANUARY 2015 227

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American Oil and Gas Reporter - January 2015

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