Draft DOE Study Indicates Illinois Basin Oil Production Methane Emissions Are Negligible

Preliminary results from a long-awaited U.S. Department of Energy marginal well methane emissions study have been released, and they confirm what even the Obama-era EPA acknowledged back in 2015: methane emissions from marginal production sites are “inherently low.”

The draft report – which was commissioned to fill a gaping data gap for wells that produce 15 barrels of less of oil per day or 90,000 cubic feet or less of natural gas per day – includes full results from first field campaign of the study, which included Illinois Basin marginal oil production sites. The Illinois Basin portion of the study is identified on the right side of the area labeled “5” on the following map featured in the draft report (view two-page summary here).

Among the most notable takeaways from that field campaign that included the Illinois Basin were:

  • 75 percent of the 87 oil sites evaluated had no detected emissions at all
  • 90 percent of observed emissions were less than 13 standard cubic feet per hour
  • 90 percent of emissions detected were from 12 percent of the sites
  • Two sites – an oil well that had a sucker rod packing issue on its pump jack (137 scfh) and a natural gas well with an open hole in the wellhead casing (156 scfh) – accounted for 40 percent of the overall emissions detected

It should be emphasized that the results are preliminary and the final report, which has been delayed by the COVID-19 pandemic, is slated to be released in September 2021. However, the Illinois Basin field study portion of the report is complete, with the data presented in the draft version of the report providing the most definitive methane emissions profile of the Illinois Basin to date. And that profile shows methane emissions from the Illinois Basin are negligible. The following graphic summarizes the oil production site findings from the field campaign that included the Illinois Basin.

With regard to the field campaign that included the Illinois Basin specifically, the report notes:

“Overall, emission rate measurements from Field Campaign 1 [which included the Illinois Basin] exhibit the long-tail behavior commonly observed in air emissions studies (see Figures 6 and 7 in Section 3.6). Approximately 90% of the observed emissions were less than 13 standard cubic feet per hour (scfh), and 95% of the observed emissions were less than 25 scfh. The top 10% of emission sources contributed 72% of the total emissions observed…”

Why It Matters

The Obama administration eliminated the marginal well exemption from its 2016 methane rule despite the Obama-era EPA acknowledging in 2015 that methane emissions at marginal wells are likely “inherently low.” In absence of significant marginal well emissions data, the Obama-era EPA in 2016 began extrapolating reported leakage rates from larger facilities onto smaller facilities, basing this methodology on the flawed notion that they have similar leakage rates. Put another way, the decision to eliminate the marginal well exemption was justified largely by assumed proportion of total production emitted from marginal wells rather than actual total emissions.

The Obama-era decision to eliminate the marginal well exemption from the methane rule was also made despite the fact that there was no significant research on marginal wells that was sufficient enough to justify the need for doing away with the exemption. That is the primary reason the DOE/GSI Environmental marginal well methane study was commissioned during the Trump administration. As the draft version of the DOE report notes:

“Seventeen peer-reviewed papers published between 2010 and 2019 include evaluations of site-level emission measurements or estimates from approximately 9,000 production sites including approximately 25,000 wells spread across 13 major basins. Of this population, approximately 3,500 of the sites may be considered marginal and predominantly represent natural gas production, with very little representation of oil production.”

The preliminary results of the study show that the environmental benefit of marginal wells being subject to the methane rule would likely outweigh the significant financial costs the elimination of the exemption would have posed on small operators.

As the Obama-era EPA acknowledged in 2015, “many [marginal] well sites are owned and operated by small businesses.” The latter is especially true in the Illinois Basin, where there isn’t a single major publicly traded company with production operations and more than 90 percent of the state’s oil wells are marginal producers, compared to 70 percent of wells nationwide. In fact, a vast majority of Illinois oil wells are actually “stripper wells,” which are wells producing 10 barrels or less per day.

The Independent Petroleum Association of America has estimated that costs associated with purchasing equipment and needed to comply with the Obama-era methane rule would result in a total average price tag  more than $78,000 per operator.

As the DOE report shows, such costs would not only prove incredibly burdensome for small producers already dealing with low commodity prices, the elimination of the marginal well exemption – which was recently re-instated by the Trump administration – would provide no climate benefit. Fortunately, the DOE report will better inform the marginal well methane emission debate moving forward.

UPDATE: U.S. Led World in CO2 Reductions For 10th Time This Century Last Year

UPDATE: Dec. 3, 2020

The U.S. Energy Information Administration (EIA) has projected U.S. energy-related carbon dioxide (CO2) emissions will decline 10 percent this year, putting the United States on pace to lead the world in annual CO2 reductions for the 11th time this century.

Though the unfortunate economic disruption brought on by the coronavirus pandemic is likely responsible for most of the reductions this year, the reductions achieved over the past 15 years have largely been attributable to fuel switching to natural gas in the power sector.

Not only has increased natural gas use been the primary reason the United States leads the world in CO2 reductions this century, a recent Bloomberg BNEF report notes that the U.S. is now on track to meet its Paris climate accord reduction pledges, as the following IPRB graphic illustrates.

Original Post: July 2, 2020

BP’s recently released Statistical Review of World Energy 2020 shows that in 2019 the United States led all nations in carbon dioxide (CO2) emissions reductions for the 10th time this century. U.S. CO2 emissions fell 152 million metric tons in 2019, three percent below 2018 levels, according to BP.

This continues a trend that has been observed more often than not since since the turn of the century. In fact, BP data show that the U.S. has reduced CO2 emissions a world-leading 755 million metric tons since 2000, outpacing the next four leading nations combined.

Experts agree that fuel-shifting to clean-burning natural gas from higher-emitting fuels in the power sector is the primary reason the U.S. has achieved these reductions over the past decade-plus. For example, the International Energy Agency (IEA) recently noted:

“The United States saw the largest decline in energy-related CO2 emissions in 2019 on a country basis – a fall of 140 Mt, or 2.9%, to 4.8 Gt. US emissions are now down almost 1 Gt from their peak in the year 2000, the largest absolute decline by any country over that period. A 15% reduction in the use of coal for power generation underpinned the decline in overall US emissions in 2019. Coal-fired power plants faced even stronger competition from natural gas-fired generation, with benchmark gas prices an average of 45% lower than 2018 levels. As a result, gas increased its share in electricity generation to a record high of 37%.”

U.S. Energy Information Administration (EIA) data show that from 2005 to 2018, a rapid shift to natural gas in the power sector reduced U.S. CO2 emissions 57 percent more than the emissions reductions realized through renewables, as the following Energy In Depth graphic shows.

However, despite the progress made by the United States and other nations that have achieved significant emissions reductions (four examples are listed in the graphic below) the BP report shows that overall global CO2 emissions increased 161 million metric tons in 2019.

This can be explained by another trend that has also been consistently observed in recent years. China’s CO2 emissions alone increased 319 million metric tons from 2018 to 2019, more than offsetting the United States’ declines.

So far this century, China’s emissions have increased by more than 6.4 billion metric tons, spiking at more than eight times the rate that U.S. emissions have declined over the same time-frame. Check out the following new IPRB infographic for perspective.

Considering China is already responsible for more than half of the world’s coal consumption and is ramping up coal consumption at the same time the U.S. and several other major countries are fuel-switching to clean-burning natural gas indicates these trends are unlikely to change any time soon. In fact, China has nearly as much new coal power generation in development as the United States had in operation last year, according to E&E News.

Due largely to the coronavirus pandemic – but also because of the continued trend of fuel-switching to natural gas and renewables – the EIA projects U.S. emissions will fall another 11 percent in 2020. The United States' world-leading CO2 reductions can largely be attributed to innovation in the oil and natural gas industry.

But climate change is a global issue, which is why it is important to understand the big picture when it comes to greenhouse gas emissions. Based on simply math, it is clear that even the most onerous climate policies imposed in the United States and throughout the world will be not enough to offset rapidly increasing emissions from China.

6 Things to Know About New Department of Energy Report on Importance of Oil and Natural Gas

Much has changed since the U.S. Department of Energy (DOE) released a 1999 report emphasizing the importance of oil and natural gas to the United States. But one thing has remained the same in the 21 years since: A general lack of knowledge about the prominent role of oil and natural gas in our country’s present and future prosperity remains.

It is with the latter reality in mind the DOE recently updated and re-released that report. Here are six things to know.

#1: The DOE Expects O&G’s Share of the US Energy Mix to Stay the Same Through 2040

The report notes that oil and natural gas’ share of the U.S. energy mix is currently near 70 percent, as the following graphic illustrates.

And despite all the hoopla about the “green” energy transition, the DOE expects oil and gas’ share of the energy mix to remain at nearly 70 percent through at least 2040.

As the report notes:

“Even after accounting for the steady growth of renewables, according to the EIA, oil, natural gas, and natural gas liquids are projected to account for the majority – nearly 70 percent – of domestic energy consumption two decades from now.”

This completely debunks the “peak oil demand” narrative currently being pushed by “Keep It In the Ground” groups. For example, the Sierra Club recently published a piece headlined, “The End of Oil Is Near: The Pandemic May Send the Petroleum Industry to the Grave.” There are many reasons for the divide between the reality highlighted in the DOE report and the rhetoric pushed by the Sierra Club.

The next fact pulled from the DOE report is a prime example.

#2: Oil and Gas Are More Than Just Fuel

The DOE report emphasizes the fact that oil and natural gas are used for much more than combustible fuel for transportation, power generation and heating. Many Americans remain unaware that oil and natural gas liquids are essential feedstocks for countless products that make our high standard of living possible. From the report:

“Hydrocarbons like ethane are the core ingredient in plastics, and are essential to modern healthcare, agriculture, the automotive industry, construction products, consumer products, and even renewable energy. Ethane is a liquid hydrocarbon removed from natural gas during post-production processing. While a relatively small portion of liquid hydrocarbons (about seven percent) are used to produce non-energy products, these products’ omnipresence in our daily lives bears highlighting. We cannot live our 21st century lives without them.”

More than 6,000 everyday products are petroleum-based and 31 percent of U.S. petroleum use occurs outside of the transportation sector.

#3: Renewables Need Oil and Gas

Among the list of thousands of petroleum-based producers are components of renewable energy infrastructure. Petrochemicals are required to manufacture  solar panels, wind turbines, batteries, thermal insulation and electric vehicles.

With those facts in mind, the DOE report notes that we would still need significant quantities of oil and natural gas to accomplish the titanic transition to 100 percent renewable electricity generation that so many “Keep It In the Ground” groups advocate for. As the report notes:

“Even efforts to reduce our reliance on fossil fuels still require that we use hydrocarbons – derived from oil and natural gas – to create and maintain the products and technologies that make these alternative energy sources reliable and economically possible.”

“Lightweight, durable plastics produced with oil and natural gas are used by most wind turbine and solar panel manufacturers.”

The report also emphasizes that because wind and solar are intermittent energy sources. backup natural gas power generation will remain necessary for the foreseeable future. From the report:

“While the share of power produced by renewable energy sources like solar and wind is expected to grow, these sources are ‘intermittent’ – wind energy fluctuates with the wind intensity and solar energy fluctuates with cloud cover and nighttime darkness – so there has to be a reliable, secure means to provide continuous electricity to consumers. The larger the contribution of renewables to the electric power grid, the bigger this challenge can be.”

“An effective solution is installation of fast-ramp-up natural gas power plants, which can be switched into the power generation system quickly whenever renewable generation slips. Such plants are capable of reaching full power outputs of hundreds of megawatts in less than 30 minutes and can be scaled back quickly when the wind picks up or the sun comes out. This role for natural gas will continue until low-cost, environmentally sustainable, large-scale power grid batteries capable of storing solar or wind-generated energy and discharging it instantaneously are available.”

#4: Oil and Gas Are Essential to Modern Healthcare and Agriculture

Some might argue that many of the petroleum products and modern advances made possible by oil and natural gas emphasized above might be viewed as superficial luxury items that we can live without if need be. But the report highlights two examples of absolutely essential industries that have been greatly enhanced by oil and natural gas: healthcare and agriculture.

The report notes that oil and natural gas have revolutionized modern agriculture, helping feed an exploding global population. In addition to fueling modern agricultural machinery, the report notes:

“Natural gas is also a key ingredient for chemical fertilizers, helping increase crop production and yield per acre planted, and powering many important operations on the farm like crop drying.”

The report notes that the ongoing pandemic has placed emphasis on the importance of fundamental healthcare and the role of oil and natural gas in it.

“The global economic disruption associated with the 2020 COVID-19 pandemic has highlighted the complicated relationship between our energy supply, society’s economic strength, and humanity’s physical health. Supplies of oil and natural gas are critical to all of the sectors of society involved in fighting the virus – fueling first responder ambulances, powering hospitals, and providing raw materials for lifesaving drugs and the personal protective equipment needed by caregivers.”

It is largely because of advances in healthcare and agriculture – both made possible by oil and natural gas – that extreme poverty recently dropped below 10 percent for the first time in recorded history. Access to food, healthcare and modern energy have made life easier, and they are all made possible by oil and natural gas.

#5: Increased Oil and Gas Production Has Made the United States Energy Independent

The report notes that the United States has reversed its position from that of energy dependence to energy independence thanks to increased oil and natural gas production over the past decade-plus.

“Dramatic increases in domestic oil and natural gas production enabled the United States to move from being an energy importer to being a net energy exporter. This shift means we are no longer dependent on other countries to meet our domestic energy needs. As a growing supplier of natural gas to global markets, the United States is now in a position to help its allies worldwide power their economies.”

The United States was the world’s largest oil importer in 2008. As oil and natural gas liquids production increased 148 percent from 2007 to 2019, net petroleum imports decreased 95 percent. Just 13 years removed from being the world’s biggest energy importer, America is now on a trajectory to completely wipe out an energy trade deficit that peaked at $321 billion in 2011. Much to the chagrin of the hostile nations we once relied heavily on to meet our energy needs, what was once a glaring national weakness is now a strength, and our geopolitical position is as strong as its been in decades as a result.

#6: The Oil and Gas Industry Provides Hundreds of Thousands of Well-Paying Jobs and Boosts the Economy

The DOE report notes that the U.S. oil and natural gas industry provides quantity and quality when it comes to jobs. From the report:

“The domestic oil and natural gas extraction industry supports 896,000 jobs (as of the end of 2019), including both direct and indirect jobs. This consists of 158,000 direct jobs and an estimated 738,000 indirect jobs, such as service and supply jobs, as well as induced jobs. The Economic Policy Institute reports that the oil and natural gas extraction industry has one of the highest indirect job employment multipliers, where one direct job leads to an additional 5.43 indirect jobs.

“Last year, the average direct job in the oil and natural gas extraction industry had an annual average wage of $112,000, more than double the annual average wage of $51,000 for the private sector. … Non-supervisory direct jobs average annual wage of $88,000, about 70 percent higher than the average private sector wage.”

The loss of these jobs as a result of “Keep It In the Ground” policies would prove devastating to our economy and would only lead to increased imports from oftentimes hostile nations to meet our energy needs.

The report also notes that strong U.S. oil and natural gas production in recent years has saved Americans billions by keeping energy costs affordable. From the report:

“The lower oil and natural gas prices resulting from increased domestic oil and natural gas production provided $203 billion annual savings to U.S. consumers – equal to $2,500 per year for a family of four.”


As the DOE report notes, “… A seamless transition to a lower carbon future will depend on a steady supply of hydrocarbons to minimize economic disruption.” This is a fact that too few Americans are aware of. As the report clearly illustrates, it remains essential for the United States to produce as much as the oil and natural gas here as possible moving forward.

5 Positive US Oil and Natural Gas Facts Everyone Should Know

The U.S. oil and natural gas industry almost always finds itself on the defensive, responding to relentless attacks from the “Keep It In the Ground” movement. Largely under-emphasized or taken for granted – even by oil and natural gas industry proponents – are the myriad of undeniable positives that oil and natural gas bring to society.

With calls to “Keep It In The Ground” gaining more and more mainstream traction, it is more important than ever to remind folks that oil and natural gas are essential to modern life, with benefits that far outweigh its negatives. Here are five examples that every oil and natural gas industry proponent should know and proudly share.

#1: Oil and Gas Has Improved Both Quality and Length of Life

Access to affordable, reliable energy correlates directly improved living standards and longer life expectancy. That explains why the average life expectancy has doubled at the same time oil and natural as consumption has skyrocketed over the past century-plus. And as more and more of the world has gained access to reliable energy, the percentage of the global population living in extreme poverty has plummeted from more than 80 percent to below 10 percent for the first time in human history.


Those throughout the world who are currently living in extreme poverty have one thing in common – they lack access to the modern energy the rest of the world enjoys and takes for granted. Put another way, energy poverty is extreme poverty. Fossil fuels supply more than 80 percent of the world’s energy and have greatly improve quality of life by providing heating and cooling to reduce the impacts of extreme weather, fuel and fertilizer for modern agriculture to nourish an exploding population, electricity and transportation to revolutionize efficiency and productivity, and tools that make the miracle of modern healthcare possible (more on that below).

#2: Oil and Gas Are Essential to Quality, Modern Healthcare

A 2011 peer-reviewed study published in the American Journal of Public Health notes, “Petroleum is used widely in health care – primarily as a transport fuel and feedstock for pharmaceuticals, plastics and medical supplies – and few substitutes for it are available.”

Indeed, oil and natural gas are absolutely essential to modern healthcare, literally helping our medical professionals save lives. It is estimated the average emergency room has 90 products derived from petroleum and natural gas. It is also estimated that 80 to 90 percent of pharmaceuticals are made of petroleum.

A wide range of medical devices – ranging from pacemakers, heart valves, monitors, respirators and 3.5 billion face masks used by medical professionals – are petroleum-based or include critical components that are derived from petroleum.


#3: Strong US Oil and Gas Production Makes Us More Secure

Almost 70 percent of U.S. energy comes from oil and natural gas and a vast majority of Americans agree that producing oil and gas here in the United States is far more ideal than importing it from oftentimes hostile nations.

Fortunately, the United States is closer to long-sought energy independence than was ever dreamed possible. Department of Energy data show that since 2007, net crude oil and petroleum product imports have declined 95 percent at the same time domestic crude oil and liquids production have increased 148 percent. Despite the ongoing pandemic, the United States is on pace to be an net petroleum exporter on an annual basis in 2020 for the first time since 1949.

Just 13 years removed from being the world’s biggest energy importer, America is now on a trajectory to completely wipe out an energy trade deficit that peaked at $321 billion in 2011. Much to the chagrin of the hostile nations we once relied heavily on to meet our energy needs, what was once a glaring national weakness is now a strength, and our geopolitical position is as strong as its been in decades as a result.

Considering carbon dioxide emissions have declined 15 percent during this timespan, the energy security benefits of strong U.S. oil and natural gas production are an undeniable net positive for our country.


#4: Strong US Oil and Gas Production Bolsters Our Economy

Rising US oil and natural gas production has historically correlated directly with economic growth in the country – with the past decade-plus being a prime example.

As oil and natural gas production skyrocketed in the United States over the past decade-plus, the U.S. enjoyed an unprecedented 11 consecutive years of gross domestic product (GDP) growth prior to the COVID-19 pandemic. The oil and natural gas boom has been credited for 10 percent of GDP growth since the Great Recession.

This economic prosperity can largely be explained by the fact that strong domestic oil and natural gas production dramatically reduces foreign imports, keeping billions of dollars here in our own economy rather than exporting them oversees. Our newfound energy bounty has also proven the equivalent of a massive tax cut, lowering energy costs dramatically. In fact, the Department of Energy reported in 2018 that average U.S. energy costs fell 34 percent from 2008 to 2016, dropping from record-high levels to a “record-low energy expenditure share” in less than a decade.

The U.S. oil and natural gas industry also continues to support more than 10 million jobs across the United States, with direct oil and natural gas industry jobs paying an average salary double the private sector average ($112,712 per year).

Energy is the one thing that all Americans use. And with that fundamental reality in mind, we have literally been able to drill our way to lower energy prices and economic prosperity over the past decade-plus, all while reducing greenhouse gas emissions.


#5: The US Lead the World In CO2 Reductions Thanks Largely to Natural Gas

The United States has reduced carbon dioxide emissions more than any other country this century. And although it may surprise casual observers, experts agree that the primary reason for these emission declines is fuel-switching to clean-burning natural gas, which has been made possible by industry innovation. That’s right: the same technologies that have allowed us to emerge as the leading oil and natural gas producer in the world are also largely responsible for our status as the world leader in greenhouse gas emission reductions. The decoupling trend is unprecedented and shows that we don’t have to choose between the economy and environment.

The emissions reductions have been driven by fuel-switching in the electricity generation sector, with the Energy Information Administration estimating that natural gas is actually responsible for 58 percent more power sector CO2 emissions reductions than renewables and other non-carbon electricity generation sources.



Illinois Gov. JB Pritzker recently designated the oil and natural gas industry as “essential,” echoing the sentiment of governors throughout the country. As the above five examples illustrate, Pritzker’s designation was certainly justified. Oil and natural gas provide clear positive net benefits to society, improving quality and length of life by enhancing modern healthcare and fueling economic prosperity. Strong U.S. oil and natural gas production also greatly reducing our reliance on hostile foreign nations for our energy needs and has played a large roll in allowing us to reduce greenhouse gas emissions.

These are just a few examples of why the “Keep It In the Ground” movement’s stated goal of destroying this essential industry is a threat to our nation’s public health, economy and overall security.

Policies Aimed at Reducing U.S. Oil Production Will Only Increase Imports

Policies designed to deliberately decrease U.S. oil production have gained mainstream traction in recent years. The justification for such policies is the theory that curtailing domestic production will also drive down U.S. oil consumption and, subsequently, lower greenhouse gas emissions.

But a review of recent historical energy data shows that this widely held “Keep It In the Ground” belief has little basis in reality.

As the following IPRB chart shows, recent periods of decreased domestic petroleum production have coincided directly with sharp spikes in petroleum imports and CO2 emissions, while the recent spike in domestic petroleum production has coincided with plummeting imports and CO2 emissions.

This data show that “Keep It In the Ground” policies would only increase petroleum imports, strengthening our foreign competitors geopolitical standing while weakening our energy security and economy – all while possibly lead to a rise in emissions to boot.

Case Study: 1986-2008 – Declining Production, Soaring Imports & Emissions

The longest period of sustained oil production decline in U.S. history – 1986 to 2008 – provides a perfect example of the fact that declining production does not lead to a reduction in domestic oil demand – it only leads into increased imports from oftentimes hostile foreign sources in order to meet demand. Oil consumption, petroleum imports and carbon dioxide emissions (CO2) all soared to record levels during this 22-year time period despite a dramatic decline oil production in the U.S.

Data from the U.S. Energy Information Administration (EIA) show that from 1986 to 2008, U.S. oil production declined 44 percent and overall petroleum production – including crude oil and natural gas plant liquids production – was down 36 percent. Based on the logic used to justify policies aimed at deliberately decreasing U.S. production, one might assume that U.S. oil consumption and carbon dioxide emissions declined as during this time as well. But the opposite was actually true.

CO2 emissions increased 27 percent during that time-span and despite free-falling domestic oil production, U.S. oil consumption increased 24 percent from 1986 to 2008. To meet oil demand, foreign imports of oil and petroleum products ballooned, and our net petroleum imports grew by a whopping 159 percent. In fact, the United States was the world’s largest oil importer in 2008.

As the following graphics show, U.S. energy and emissions trends during this period of time were troubling, to say the least.

Anybody who is old enough to legally have a beer probably remembers that the mid-to-late 2000s were a time of considerable angst on the domestic energy front. U.S. oil production dropped to just 5 million barrels per day in 2008 and “peak oil” fears became rampant. U.S. net petroleum imports peaked at 12.5 million barrels per day in 2005 and our carbon dioxide emissions reached all-time highs in 2007.

U.S. oil demand has continued to grow consistently since 2008. But fortunately, our domestic production and natural gas production has skyrocketed, allowing the United States to reverse the above trends and put us closer to our long-coveted goal of energy independence than anyone could have imagined just a decade ago.

But now, with oil demand artificially depressed by the COVID-19 pandemic, it is easy to forget that global oil consumption will likely rebound sharply once the pandemic is behind us. After all, global oil consumption reached an all-time high of nearly 100 million barrels per day in 2019, with the United States accounting for more than 20 percent of that consumption. The latter fact noted, the United States will no doubt return to the days of being the world’s leading oil importer if policies aimed at intentionally reducing domestic production are implemented.

That would be great news for major oil producing nations such as Saudi Arabia and Russia, who would no doubt regain the market share and geopolitical leverage they lost when the United States emerged as the world’s top oil producer this past decade.

And though it might seem counter-intuitive, a decrease in domestic oil and natural gas production would likely spike our CO2 emissions as well.

A dramatic increase in U.S. oil production over the past decade-plus has been coupled with a world-leading decline in CO2 emissions (nearly 800 million metric tons).

This can largely be explained by the fact that record U.S. production clean-burning natural gas – large quantities of which are co-produced with oil in places such as the Permian Basin in Texas and New Mexico – have allowed the United States to reduce emissions considerably.

Policies aimed at curtailing U.S. drilling will make natural gas more expensive and less plentiful and likely increase coal use, considering intermittent renewable energy is nowhere near reliable enough to power a developed society with a modern economy. Increased coal use would lead to a reversal in downward emission trends seen since about 2005.


 It wasn’t that long ago that “peak oil” fears and the assumption that the United States would be under the thumb of the OPEC cartel for decades to come were prevalent. But thanks to the ingenuity of U.S. producers, we are now the world’s undisputed leader in oil and natural gas production, a net oil and natural gas exporter and have led the world in CO2 emission reductions this century.

Fortunately, many Americans recognize these facts and see the folly in policies that would reverse these trends. Recent polls show strong support domestic oil and natural gas production throughout the United States, including Illinois:

  • A recent survey of 700 Illinois residents commissioned by the Grow America’s Infrastructure Now (GAIN) coalition finds 90 percent of respondents believe it’s important for the United States to be energy independent, while 85 percent agree that the oil and gas industry is important to the Illinois economy.
  • A recent Morning Consult poll of respondents in 12 energy-rich states found that 64 percent of respondents are likely to vote for a candidate who “supports policies that ensure consumers continue to have access to natural gas and oil produced in the U.S.”
  • A recent survey of 3,631 voters and likely voters across Iowa, Michigan, Minnesota, Ohio, Pennsylvania and Wisconsin conducted by the The Epoch Times found that 42 percent support “fracking [hydraulic fracturing] as a means of increasing oil and natural gas production in the U.S,” compared to 32 percent that oppose it.

As energy expert Daniel Yergin recently noted, “The world still runs on oil and oil will be a very major part of the energy mix for quite a long time… If you ban fracking [hydraulic fracturing] it’s an import-more-oil-policy.” Hopefully, policymakers will take note.



UPDATE: 5 Examples That Show ‘Keep It In the Ground’ Movement Isn’t Serious About Reducing Emissions


Aug. 20, 2020, 4:15 p.m.

As IPRB noted last week, “Keep It In the Ground” activists groups oppose the mineral mining needed to facilitate the massive renewable energy infrastructure build-out they claim is necessary to reduce greenhouse gas emissions and mitigate climate change.

A prime example of this contradictory stance can be found at the local level, as Southern Illinoisans Against Fracturing Our Environment (SAFE) has actively opposed proposed rare earth mineral mining at Hicks Dome in Hardin County and, more recently, potential rare earth mineral mining near Marion.

The Shawnee Trails chapter of the Sierra Club also expressed concerns about potential rare earth mining in a 2016 newsletter:

“Geological prospecting was proposed for Hick’s Dome in Hardin County in 2012, and the Forest Service received public comments during April and May 2015. Potential waste containment and health issues are of concern, whether during core drilling of radioactive rare earth elements (REEs), including thorium, or later possible mining. Moreover, IDNR just approved an oil drilling permit in Hicks Dome, which prompts similar concerns. REEs are used in electronics, hybrid vehicles, wind turbines, and cell phones. China supplies most REEs presently. Read the Project Documents and about REEs and environmental issues.”

Any serious transition to renewable energy is going to require some increase in mineral mining in the United States, including in Illinois. Opposition to such projects can effectively be viewed as indirect opposition to renewable energy or an endorsement of “not in my backyard” outsourcing of mining to other countries. IPRB will monitor these group’s stances on such issues in the months ahead.

Original Post: Aug. 13, 2020

“Keep It In the Ground” (KIITG) activists claim a rapid transition to 100 percent renewable energy is absolutely necessary in order to dramatically reduce greenhouse gas emissions and mitigate climate change. But such a transition would require a lot of mining, lots of natural gas to back up intermittent wind and solar, and dramatic reform of federal permitting protocols to facilitate a rapid renewable infrastructure build-out.

Leaders of the KIITG movement are diametrically opposed to all three of these things.

KIITG movement leaders also show a relative lack of concern about skyrocketing carbon dioxide (CO2) emissions in China, while one of the movement’s most prominent communities continues to focus on suing energy companies more than actually reducing its own sky-high emissions. Add it all up, and it’s clear most KIITG activists care more about ending all U.S. energy production and making the United States completely dependent on foreign energy sources than reducing emissions and addressing climate change.

Here’s a closer look at the five examples of why the movement deserves far more scrutiny than it gets.

Example #1: KIITG Groups Oppose Reforms That Would Expedite Renewable Energy Projects

It has been estimated that 25 to 50 percent of overall U.S. land mass would be required to facilitate the wind and solar energy infrastructure build-out necessary to achieve the KIITG movement’s renewable energy goals by 2030.

That massive acreage considered, such a build-out is simply not going to happen without major reform of the restrictive National Environmental Policy Act (NEPA). NEPA currently requires extensive environmental reviews to be conducted prior to major infrastructure projects beginning. These reviews currently take an average of more than 4 1/2 years to complete and can delay projects as many as 10 years, as such reviews are routinely challenged by environmental groups. These delays have been a major roadblock for both fossil fuel andrenewable infrastructure projects for years.

That is why President Trump recently signed an executive order to reform NEPA and expedite major infrastructure projects. The wind industry applauded Trump’s overhaul for the reasons noted above. But KIITG groups such as the Natural Resources Defense Council (NRDC) vehemently oppose Trump’s NEPA reforms, claiming they will undermine environmental protections. Former Obama-era U.S. Environmental Protection Agency (EPA) chief and current NRDC President Gina McCarthy recently said in a statement:

“These reviews are required by law to protect people from industries that can harm our health and our communities. Getting rid of them will hit those who live closest to polluting facilities and highways the hardest – in many of the same communities already suffering the most from the national emergencies at hand.”

KIITG opposition to NEPA reform is a textbook example of the disconnect between the movement’s pie-in-the-sky idealism and the real-world compromises needed to make its 100 percent renewable energy rhetoric a reality. It is just one reason that the rhetoric has no basis in reality.

Example #2: KIITG Groups Oppose Mining Needed For Renewable Infrastructure

The 100 percent renewable energy transition KIITG groups insist must happen this decade is also going to require massive increase in mineral mining to produce renewable energy infrastructure and components such as batteries and solar panels. But prominent KIITG groups are diametrically opposed to mining – especially mining in the United States.

The Sierra Club’s mining policy states:

“Mining by its very nature is a dirty business and highly disruptive of the natural and human environment… Because of these negative impacts, additional or new mining must be kept to a minimum to meet essential human needs and alternatives to mining undisturbed ore bodies should be encouraged and pursued.”

Earthworks has a similar stance, characterizing mining as “inherently destructive” while stating that mining “devastates communities, clean water and the environment.”

It is because of well-funded campaigns by KIITG groups such as the Sierra Club and Earthworks that United States mineral mining is currently being “kept to a minimum” and far below the levels needed to domestically source the type of renewable energy revolution KIITG activists insist is needed.

Key minerals for the renewable energy transition include cobalt, lithium, natural graphite, nickel and rare earth metals, all of which are essential to manufacture batteries and components for electric cars.

According to a recent report from researchers at the Institute for Sustainable Futures at the University of Technology Sydney in Australia, a 100 percent renewable energy transition would increase global lithium demand 280 percent and nickel demand 136 percent. The report finds that even assuming a high rate of recycling, demand for the two metals would exceed existing reserves by 86 and 43 percent, respectively, necessitating a massive increase in new mining.

Cambridge University Emeritus Professor of Technology Michael Kelly has estimated that replacement of the United Kingdom  internal combustion engine vehicles alone with electric vehicles would require more than half the world’s annual copper production, twice of its current cobalt production, 75 percent of its annual lithium carbonate production and nearly the world’s entire current production of neodymium.

The United States produces just 12.4 percent of the world’s rare earth metals, just 1.2 percent of the world’s lithium and virtually no cobalt and natural graphite.

In contrast, China controls 90 percent of global rare earth production, 90 percent of cobalt refining and 60 percent of global natural graphite production. Sixty-four percent of cobalt mining takes place in the Democratic Republic of the Congo and is largely controlled by Chinese companies.

Manhattan Institute senior fellow Mark P. Mills has also noted that:

“America imports some 80 percent of the electrical components (i.e., the key stuff other than the concrete, steel, and fiberglass) used in wind turbines. About 90 percent of our solar panels are imported. And even if solar cells were fabricated here, the U.S. produces only 10 percent of the world’s essential underlying silicon material. China produces half.”

Suffice it to say, the United States would be heavily dependent on China should the 100 percent renewable energy transition KIITG groups are pushing for commence any time soon. Such a situation would likely result in the renewable energy equivalent of the United States being under the OPEC oil cartel’s thumb, as it was for many decades prior to America’s recent oil and natural gas renaissance. As Ashley Feng, a research associate for China studies at the Council on Foreign Relations, recently wrote in Scientific American:

“In the clean energy economy of the future, critical minerals will be just as essential – and geopolitical – as oil is today. To avoid making the same mistake twice, the U.S. should preemptively [declare] its own clean energy independence.”

But that would require powerful KIITG groups to suddenly shift policy in support of  domestic mineral mining expansion in places such as Round Top in Texas, which is believed to hold a 130-year supply of rare earth minerals. But don’t hold your breath on that KIITG policy shift announcement.

Example #3: KIITG Groups Oppose Natural Gas and Nuclear Energy

Increased use of natural gas – which emits roughly half the CO2 of other traditional fuels when burned – is the No. 1 reason the United States leads the world in CO2 reductions this century.

Nuclear energy is the only zero-emission power source that has been deployed at scale. An overwhelming majority of the CO2 emissions reductions achieved by the United States and Europe this century simply would not have happened without natural gas and nuclear energy.But KIITG groups oppose both.

A fact sheet that was released as part of the Green New Deal (GND) rollout calls for nuclear phase-out (although unproven “advanced” nuclear has since been tepidly endorsed by more moderate GND advocates). However, the Sierra Club, Food & Water Watch, Earthworks, NRDC and many other major KIITG groups outright oppose nuclear energy, as does teen climate activist Greta Thunberg. KIITG groups and activists also overwhelmingly favor banning hydraulic fracturing – the technology that has made natural gas more abundant and affordable than any time in history.

This opposition is baffling, as any serious effort to dramatically reduce emissions would almost certainly need to an all-of-the-above approach including natural gas, renewables, nuclear and some form of carbon capture and storage.

Example #4: KIITG Groups Praise China Despite Its Soaring Emissions

Not only would the United States likely be heavily reliant on China for the minerals needed to facilitate a 100 percent renewable energy build-out, the emission reductions that might result from such a build-out would be far offset by China’s exploding emissions.

As the above IPRB graphic illustrates, CO2 emissions increases in China have outpaced emissions reductions in the top-five leading countries this century by 472 percent.

Simply put, the world has no hope of collectively significantly reducing GHG emissions if China’s current emissions trajectory continues. And chances are, that trajectory is going to continue.

China is building hundreds of high-emitting coal power plants while watching its CO2 emissions skyrocket, the exact opposite of what is happening in the U.S., where natural gas plants have replaced more than 100 coal plants since 2011.


E&E News recently reported that:

“Today, [China] has almost as much new coal generation in planning or construction (206 gigawatts) as the United States has in operation (235 GW at the end of 2019).”

Christine Shearer, who runs the coal program at Global Energy Monitor, a research group that tracks fossil fuel infrastructure, told E&E News in an email:

“China’s coal plant build-out could single-handedly undermine the reductions in coal power use that the IPCC [Intergovernmental Panel on Climate Change] has said are necessary to keep warming below 2C, even if the rest of the world phased out coal power by 2030.”

Despite these facts, KIITG groups and the mainstream media routinely applaud China’s efforts to address climate change. As Bloomberg reported in 2017:

“The nation that spews the most pollution and is building dozens of coal-fired power plants is also winning accolades from the likes of Greenpeace and WWF for its efforts to fight global warming and steer an environmental path away from fossil fuels.”

Clearly, any serious campaign to reduce global CO2 emissions and mitigate climate change should be focused on China. Instead, KIITG groups either laud China or choose to ignore its skyrocketing emissions while pushing to ban domestic production of fossil fuels that are responsible for 80 percent of our energy mix.

Example #5: KIITG Groups Focus on Suing Energy Companies Rather Than Reducing Emissions

KIITG groups have pushed numerous climate liability lawsuits throughout the United States in recent years, a tactic aimed at forcing energy companies to pay for the impacts of climate change and adaptation measures, with a long-term goal of putting targeted companies out of business.

One of the most infamous climate lawsuits has been filed by the city of Boulder, Colo., which is known for touting its green credentials and being the epicenter of Colorado’s KIITG movement. But it turns out Boulder’s “green” credentials aren’t exactly much to brag about.

The Associated Press (AP) recently reported that a Boulder County zip code has the highest per-capita carbon dioxide (CO2) emissions in the country. That’s right – the average resident of this “green” KIITG hot-spot uses far morefossil fuels than the typical American. As the AP reported:

“The zip code that produced the most greenhouse gas per person was in the mountains of western Boulder County, where the 23,811 pounds per person is 18 times higher than in the San Francisco zip code.”

Boulder County’s gluttonous fossil fuel consumption even as the city of Boulder sues energy companies is more than just hypocritical. It shows that even if the KIITG the strategy of suing U.S. energy companies out of existence were to prove successful, it is highly unlikely that affluent, energy-hungry communities such as Boulder where the KIITG movement tends to be most prominent will simply continue using energy sourced from foreign sources.


With the KIITG agenda going mainstream in this year’s presidential election, that agenda certainly warrants increased scrutiny. And as the five examples above illustrate, it is clear that the KIITG agenda has much more to do with putting U.S. traditional energy companies out of business and making the United States completely reliable on foreign energy sources than it does with reducing CO2 emissions and mitigating climate change.

Thanks largely to the United States’ oil and natural gas renaissance, America’s energy security is as strong as it’s ever been and once unimaginable energy independence is within reach. The KIITG agenda simply seeks to destroy that energy security by making the United States dependent on foreign sources for oil and natural gas andminerals needed for a massive renewable energy build-out.



Illinois Oil Production Bounces Back to Normal Levels After Rough Spring

NOTE: This blog was updated on Aug. 7, 2020, with revised June production data.

Illinois crude oil production in the first half of 2020 was 8.3 percent below levels seen in the first half of 2019, totaling 3,663,050 barrels. However, Illinois oil output returned to more typical pre-COVID-19 pandemic production levels in June.

COVID-19 restrictions drove down oil demand and prices at an unprecedented pace throughout the world in the spring. So not surprisingly, Illinois oil production was down 27 percent in the second quarter compared to first-quarter production totals, and overall United States oil production experienced a similar decline, falling by 22 percent (2.8 million barrels per day).

But Illinois production in June increased 93 percent from May’s production level of just 11,987 barrels per day (bpd), settling at a more typical 23,025 bpd.

Though oil prices and production are trending in the right direction, there is no getting around the fact that it was a tough second quarter.

April production was down 30 percent from typical Illinois production of 23,000 bpd, as Illinois Basin oil prices averaged just $12.68 in the wake of the global demand crash brought on by the COVID-19 pandemic.

Prices improved considerably in May and were up 147 percent from their April lows in June. But although prices have remained steady throughout July, they are still well below levels seen early in 2020.

Despite the oil price crash, White County is still on pace to surpass two million barrels of annual production for the second consecutive year, pumping 1,076,144 in the first half of 2020. That total represents 29 percent of the state’s total production so far this year.

Many experts are cautiously projecting a steady rebound in oil demand throughout the rest of 2020, providing hope that the worst of the COVID-19 price collapse has passed.

Click here to view IPRB’s full production report for the first half of 2020, including county-level totals. Production data is compiled by IPRB from monthly reports submitted by Illinois Basin first purchasers.

Fact Checking the Indianapolis Star’s Misleading Story on PPP Loans to Fossil Fuel Companies

A recent Indianapolis Star article claims Indiana fossil fuel companies “may have gobbled up more than their share” of Paycheck Protection Program (PPP) loans designed to help businesses through the COVID-19 pandemic and that “clean energy was left behind.”

As the story’s headline suggests, the article strongly implies renewable energy companies were flat-out denied PPP loans by the Trump administration while fossil fuel companies received inordinate levels of relief.

However, there is simply no evidence presented in the article to back up those assertions. Here are the most egregious claims made in the article, followed by the facts.

CLAIM: “Indiana coal, gas and oil companies may have gobbled up more than their share of the government loans meant to help companies deal with the pandemic.”

FACT: The article doesn’t include a single example of an Indiana fossil fuel company receiving a loan larger than it was eligible to receive or a loan that it should not have received at all.

The article emphasizes that Indiana fossil fuel companies received between $42-$100 million in PPP loans, but doesn’t indicate that total exceeded any specific threshold that would raise a red flag. Instead, the reporter relies on vague speculation from “environmental advocates” to reach the subjective conclusion that the loans were excessive. As the following excerpt from the story shows, the speculation from "environmental advocates" has more to do with anti-fossil fuel advocacy than the alleged misappropriation of funds the reporter suggests occurred.

“For many environmental advocates, the Paycheck Protection Program data calls into question the number and size of relief funds allocated to an industry that was on the decline before the pandemic.”

CLAIM: “[C]lean energy was left behind.”

FACT: The story actually notes Indiana “clean” energy companies received millions in loans and doesn’t quote a single “clean” energy company representative claiming their PPP loan application was either denied or that loan they received was inadequate.

Oddly, the story’s two primary sources were not renewable energy company representatives. Instead, the reporter quoted representatives from the Indiana Renewable Energy Association (IREA) and the Sierra Club. The latter actively advocates for “Moving Beyond Dirty and Dangerous Fossil Fuels.”

One would think that a piece centered on the notion that clean energy companies were “left behind” would reach out to a representative from one of those companies to provide testimonial to support that claim.

Instead, IREA head Laura Arnold suggests the PPP monies should have been used to “set up to transition fossil fuel workers into other industries,” suggesting that the monies should have been “better used for a more viable industry.” Again, this is an example of anti-fossil fuel advocacy rather than an accusation of misappropriation of government monies.

And speaking of monies, the reporter’s conclusion than “clean” Indiana energy companies received “less than $5 million” is somewhat misleading as well. As the story notes:

“Only a handful, however, of Indiana companies in renewable energy received loans, according to the data. …

“Morton Solar & Wind and Midwest Wind & Solar each received between $150,000 to $350,000. One other, Inovateus Solar, got between $350,000 and $1 million. Other renewable or clean energy companies in Indiana may have received money, but it was not immediately apparent in IndyStar’s analysis of the data.”

Because PPP loans of $150,000 or less were not disclosed in data released from the White House and loans of more than $150,000 were presented in broad ranges, exact PPP loan figures for both the fossil fuel and “clean” energy were impossible to calculate. But that didn’t keep the reporter from deliberately presenting high-end estimates for fossil fuel loan recipients and more conservative estimates for “clean” energy companies.

CLAIM: The fossil fuel industry “was on the decline before the pandemic.”

FACT: Far from being in decline, fossil fuels supply 94 percent of Indiana’s energy.

As the following U.S. Energy Information Administration (EIA) graphic illusrates, Indiana relies heavily on fossil fuels to meet its energy needs.

To suggest an industry that supplies 6.7 million Indiana residents with an overwhelming majority of the energy they rely on to power their lives is “in decline” is spurious at best.

The above graphic illustrates why Indiana governor Eric Holcomb – like many governors from both sides of the political aisle across the United States, including Illinois Gov. JB Pritzker – designated the oil and natural gas industry as “essential” when COVID-19 pandemic restrictions began.

CLAIM: “Clean energy has been a booming industry in recent years and those jobs outnumber fossil fuel workers 3-to-1….”

FACT: The definition of “clean” energy jobs is very broad, inflating the total number of jobs in the industry.

The above claim is based Clean Jobs America report that identifies more than 3.2 million “clean” energy jobs. But a close look at the report reveals that more than 2.3 million (72 percent) of those jobs are “energy efficiency jobs,” which includes traditional HVAC positions and “high efficiency” HVAC positions. Wind and solar energy jobs make up just 14 percent of the 3.2 million “clean” energy jobs identified.

Similarly, a recent Clean Jobs Midwest report claims there were 86,800 “clean” energy jobs in Indiana before COVID-19, “five times as many” as in the fossil fuel industry in the state, according to one media report.

But a close look at that report reveals that 64 percent those 86,800 “clean” energy jobs are energy efficiency occupations, including 14,000-plus traditional HVAC positions and another 24,456 high efficiency HVAC positions. In fact, 863 natural gas "advanced transportation" jobs are listed among the “clean” energy jobs even though they should clearly be classified as fossil fuel jobs. Of the 86,800 total “clean” energy jobs identified in the report, 10,975 are in renewable energy. The latter figure is similar to the number of fossil fuel industry jobs in the state, 7,391 of which are in the oil and natural gas industry, according to Texas Independent Producers and Royalty Owners 2020 State of Energy Report. The American Petroleum Institute estimates the oil and natural gas industry supports 10.3 million U.S. jobs overall.


To be clear, the COVID-19 crisis has been devastating to the entire energy industry, resulting in hundreds of thousands of jobs losses combined across all sectors. Fortunately, the PPP loan program has alleviated some of the pain. That said, it is disappointing to see a media report that suggests it was borderline criminal to provide loans to fossil fuel companies that meet 94 percent of Indiana's energy needs. Providing a platform for groups that feel PPP monies would have been better used to “set up to transition fossil fuel workers into other industries” that currently supply just three percent of Indiana’s energy seems more than a little tone deaf as well.

Now more than ever, Americans need access to affordable, reliable energy. What it doesn’t need is advocacy journalism aimed at misleading the public about a fossil fuel industry that can largely be credited for both of those things.

Report Shows Oil Consumption Reached All-Time High in 2019

It has become quite fashionable to claim that the age of oil is all but over and that fossil fuel industries are in a rapid state of decline. But the facts simply do not support that rhetoric, with data from the recently released BP Statistical Review of World Energy 2020 being just the latest example.

The highly regarded report finds that global oil consumption reached an all-time high in 2019 and was the top source of energy in the world – a title it has held since the early 1960s. Oil’s resilience along with the continued ascension of natural gas use can explain why fossil fuels collectively supplied a whopping 84 percent of the world’s energy last year despite the continued decline of coal use.

In fact, as the following IPRB chart shows, oil and natural gas’ share of the overall global energy mix has remained remarkably consistent over the past decade-plus, ranging between 56 and 57 percent each year, while the overall fossil fuel share of the global energy mix has remained between 84 and 87 percent.

For perspective on how little the energy mix has actually changed despite all the hoopla about renewable energy growth, fossil fuels had the exact same 84 percent share of the overall global energy mix way back in 1973.

How can this be considering renewable energy accounted 41 percent of the total share of increased energy use in 2019? Simply put, overall global energy consumption growth has outpaced renewable energy growth. And despite the aforementioned narrative that oil demand is in decline, oil consumption has increased each of the past 11 years as well, as the following IPRB chart shows.

To put it bluntly, the oil and natural gas industry is not dying – far from it. And world's seemingly unquenchable thirst for energy is the primary reason why the outlook for the industry is strong.

Though oil and natural gas’ share of the overall energy mix may decrease in the coming years, raw consumption of both fuels will likely increase as more and more people gain access to the modern energy that we in the United States take for granted.

It has been conservatively estimated that 74 percent of the world’s population lives in underdeveloped nations with limited access to reliable energy, while more than a billion people live in energy poverty, meaning they have no access at all to modern energy, most notably electricity. However, the International Energy Agency (IEA) expects that to change in the decades ahead, which is why the IEA forecasts that global oil demand will continue to increase through at least 2040 as more and more poor countries develop modern economies. It also expects the United States to meet 70 to 80 percent of the roughly 10 million barrels a day of added oil demand through 2030.

And although consumption from all energy sources is set to see a big decline in 2020 due to the coronavirus pandemic and dramatic slowdown in economic activity, the IEA expects it to be more a blip than long-term trend. The IEA expects oil demand returning “where it was, and beyond” as the world gradually lifts COVID-19 restrictions that have slowed global economic growth.

And even assuming 100 percent Paris Climate Agreement compliance, 48 percent of global energy will come from oil and natural gas by 2040. That explains why a recent New York Times analysis concludes that even if aggressive greenhouse gas emission reduction policies are implemented throughout the world, “the petroleum industry will have to find about 4.5 million, instead of seven million barrels a day of new production every year.”

The U.S. Department of Energy (DOE) has also released a report that shows fossil fuels – primarily oil and natural gas – will likely meet 79 percent of our energy needs in 2050. That represents just a one percent decline from fossil fuels’ U.S. energy consumption share last year.

The data and expert analysis doesn’t lie: The world is going to need a lot of oil and natural gas for many years to come. And it makes sense to produce as much of it as possible in Illinois and throughout the rest of the United States than to rely on more environmentally lax and potentially hostile nations for the energy the world needs.

*UPDATE* Strong U.S. Oil and Gas Production Keeps Energy Costs Affordable

UPDATE: June 3, 2020

A new Consumer Energy Alliance (CEA) report finds record U.S. natural gas production saved Illinois consumers $24 billion from 2007 to 2017, an average savings of $876 for every resident in the state. The report also finds that residential natural gas prices in Illinois were 25 percent lower in 2017 than they were 10 years prior, due largely to a dramatic increase in domestic production over that time-frame.

According to the report, roughly 1.6 million Illinoisans who are living below the poverty line spend about a quarter of their income on energy costs, placing added significance to the savings that have been made possible by cheap and abundant natural gas. The CEA finds that 80 percent of Illinois households use natural gas to heat their homes during the winter and that natural gas is also essential to the agricultural, manufacturing and utility sectors.

Check out a fact sheet on the report here.

Original Post: April 15, 2020

The cost of living in the United States has increased across the board over the past decade, with one notable exception. At the same time healthcare, education and food costs have exploded (see graphic below), the most recent government data show household energy costs – including utilities and expenditures on transportation fuels – were down just under seven percent from 2008 levels in 2018, the latest year in which data is available.

Considering 68 percent of America’s energy needs are met by oil and natural gas, the decline in overall energy costs can be traced to the fact that domestic oil and natural gas production increased 76 percent during that time-span.

As a result, the typical American family of four has saved $2,500 per year, according to the White House Council of Economic Advisers. Those savings make a huge difference for low-income households, which have historically spent a disproportionate amount of their incomes on energy, making energy price spikes disproportionately impactful as well (more on that in a bit).

Access to affordable and abundant energy is a fundamental need – and the U.S. oil and natural gas industry has met that need in a big way, reversing a troubling trend in the process.

Back in 2008, talk of “peak oil” and “peak gas” was commonplace. Domestic production was perceived to be in irreversible decline and imports were surging to all-time highs. Not coincidently, U.S. energy costs “reached their highest point on record in 2008, when they averaged $24.13 per million Btu,” according to a 2018 U.S. Energy Information Administration (EIA) report.

But thanks largely to industry innovation, the United States is now the world’s largest oil and natural gas producer, and energy costs have plummeted as a result. The EIA reported that in 2016, U.S. energy costs fell to a “record-low energy expenditure share,” adding:

“The U.S. average energy price was $15.92 per million British thermal units (Btu) in 2016, down 9% from 2015, and the lowest since 2003, when adjusted for inflation.”

U.S. households today spend less than four percent of their total budgets on energy costs, down from 5.1 percent a decade ago. Gasoline prices are currently about half of the record-high costs seen in 2008 and have averaged below $3 a gallon for six straight years, while retail natural gas prices declined 24 percent from 2008 to 2018.

However, oil and natural gas bans and restrictions being proposed by mainstream political factions pose a real threat to energy access and affordability moving forward. Such policies would negatively impact a large portion of the population if implemented.

A 2018 Energy Information Administration (EIA) report reveals that one of three U.S. households struggle with household energy insecurity, meaning that although they have adequate access to energy, they oftentimes can’t afford it. In fact, 25 million Americans report they’ve had to choose between energy and food or medicine in 2018, while 14 percent of those surveyed reported they had recently received a disconnection notice.

It is with those facts in mind that several civil rights leaders have advocated for access to natural gas for low-income minority communities, in addition to declining to endorse bans on hydraulic fracturing. As Axios recently reported:

“Revs. Al Sharpton and Jesse Jackson and National Urban League President Marc Morial said energy costs are hitting people of color unfairly hard. These concerns, expressed before the coronavirus pandemic, are poised to expand as paychecks shrink across America.”

As Energy In Depth recently highlighted, Rev. Jackson has worked with local officials in the Pembroke Township community of Hopkins Park – one of Chicago’s poorest suburbs – to bring a natural gas line to the community. The median income in this Chicago suburb is just $16,000 per year and residents have relied primarily on propane and wood stoves for home heating during the region’s often brutal winters.

As Energy In Depth noted, “Why natural gas? Households that use natural gas saved more than $4,000 over a 10-year period, according to a recent study by Shale Crescent USA and the Ohio Oil & Gas Energy Education Program. Low income households, which spend a disproportionate amount on energy, realized savings equal to 2.7 percent of their annual income.”

Hopkins Park Mayor Mark Hodge said in a recent TV interview that:

“This community has been overlooked for the past 48 years for natural gas, so we’re in need of industry and we’re in need of jobs, and our school is in need of natural gas.”

In the real world, access to affordable, reliable energy is a far bigger priority than idealistically driven renewable energy campaigns that deliver neither. Fortunately, America’s oil and natural gas industry is meeting those fundamental needs.