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.

Conclusion

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.


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

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.


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.


Three Reasons Illinois Gasoline Prices Didn’t Crash Along With Oil Prices

UPDATE: May 13, 2020, 3:25 p.m. CDT

Data released this week by the U.S. Energy Information Administration show that 64 percent of the retail price of a gallon of gasoline across the country in March could be attributed to taxes and marketing and transportation costs. As the following IPRB graphic shows, pump prices attributable to taxes and marketing and transportation costs has increased significantly over the past 12 years, while the share attributable to oil prices and refining costs have declined. The trend is even more pronounced in Illinois, where 77 percent of the price at the pump on May 12 could be attributed to taxes and marketing and transportation costs.

Editors Note: Original blog published on May 7, 2020, was updated on May 13, 2020, with new supplementary information from the Energy Information Administration

In the wake of the recent oil price crash that resulted due to the demand shock created by the coronavirus pandemic, many Illinois consumers may be wondering why gasoline prices haven’t declined as sharply as the price of oil did.

Though the average Illinois retail gasoline price sat at $1.79 per gallon on April 29 – the lowest average Illinois pump price in recent memory – it was still well above the average cost in many neighboring states.

Here are three reasons Illinois pump prices haven’t necessarily reflected extremely low domestic oil prices over the past few weeks.

Reason #1: High State Taxes

State, federal and local gasoline taxes in Illinois total 72 cents per gallon combined (and even higher near Chicago), meaning that roughly 40 percent of Illinois pump prices in late April were attributable to taxes.

Illinois’ state gasoline tax doubled last summer from 19 to 38 cents per gallon and is now the third highest state gasoline tax in the country. That total piles onto the 18.4-cent per gallon federal excise tax and 15-to-17-cent per gallon of local taxes paid by Illinois drivers. So no matter how low the price of oil goes – and it went as low as it could go on April 21 – retail gasoline prices in Illinois could fall no lower than 72 cents per gallon.

Reason #2: Global Crude Standard Drives Pump Prices

Another reason Illinois gasoline prices didn’t completely crash when the domestic oil price standard – the West Texas Intermediate (WTI) – went below $0 on April 21 is because refined products such as gasoline are traded on the world market and are determined by global market prices, namely, the global Brent crude index.

As the following Oilprice.com chart shows, though the Brent price dropped dramatically on April 21, it came nowhere close to the freefall the WTI experienced.

Brent prices have also remained higher than the WTI standard throughout the COVID-19 pandemic, continuing a trend that has generally been observed in recent years.

Notably, U.S. crude exports have kept Brent prices – and, by extension, pump prices – lower than they otherwise would have been by adding supply to the global market and thwarting OPEC’s once tried-and-true efforts to keep prices artificially inflated.

Prior to the U.S. oil production renaissance that has been ongoing for the few years, Brent oil prices averaged nearly $100 in 2008 and remained near that level through 2014. Not coincidentally, gasoline prices were routinely over $3 a gallon during that time, and went over $4 a gallon in 2011.

But after the crude export ban was lifted in 2015, Brent oil prices declined dramatically, driving down the overall cost of gasoline and the share of retail gasoline costs attributable to oil prices, as the following Energy Information Administration graphics illustrate.

 

As the latest EIA graphic shows, global oil prices represented just 35 percent of the total cost of gasoline across the nation in March, compared to an average of 61 percent from 2008 to 2017.

Reason #3: Refining, Transportation and Marketing Costs Part of Equation

The third factor that explains why pump prices didn’t bottom out completely along with domestic oil prices last month are the necessary refining, distribution and marketing costs that are included. Marketing and transportation costs have ranged between 25-42 percent of pump costs from 2008 to the present.

Notably, local refining can reduce the cost of transporting gasoline to the market, reducing prices at the pump as well. The latest EIA data show that refining costs have declined dramatically since 2017 along with crude oil prices, while taxes and marketing and distribution costs have grown sharply.

Conclusion

The fact that the United States has emerged as the world’s top crude oil producer and a major exporter explains why the average American household has paid $500 a year less for gasoline each year since 2014. As USA Today recently reported “$3-a-gallon gasoline is becoming a distant memory” and “the main reason is the nation’s oil boom.” But the fact that gasoline taxes have generally increased – especially in Illinois – is the primary reason pump prices haven’t dropped even more. Essentially, increased taxes and marketing and transportation costs are the primary reasons why $1-a-gallon gasoline - even when the price of oil hits rock bottom - are a distant memory as well.


*UPDATE* Illinoisans Express Strong Support for State’s Oil Industry

UPDATE: May 1, 2020

A total of 18 Illinois oil-producing counties have passed resolutions of support for the state’s oil production industry over the past calendar year. Collectively, the oil production industry in these 18 counties are responsible for 7.7 million barrels of annual production – 93 percent of the state’s overall production – 2,500-plus direct oil production industry jobs and more than $1.1 billion in annual gross regional product. Check out IPRB’s new infographic for more details.

UPDATE: March 25, 2020

Gallatin County recently passed a resolution of support for the Illinois oil production industry. A total of 18 oil-producing counties have passed resolutions of support for the Illinois oil production industry over the past calendar year. Collectively, these counties accounted for 93 percent of Illinois oil production in 2019.

ORIGINAL POST: Jan. 30, 2020

Though it hasn’t gotten much attention, Illinois residents have demonstrated strong support for the Illinois oil industry in recent months.

Most recently, a survey of 700 Illinois residents commissioned by the Grow America’s Infrastructure Now (GAIN) coalition showed that a vast majority of Illinoisans recognize the importance of the industry to the state’s economy and endorse the United States’ continued march toward energy independence. As the Williston Daily Herald (North Dakota) reported:

“The poll found that Illinois residents not only support [expansion of the] Dakota Access [Pipeline], but the energy industry in general. Ninety-percent said they believe it’s important for the United States to be energy independent, while 85 percent agreed that the oil and gas industry is important to the economy in Illinois.”

Additionally, 17 Illinois oil-producing counties over the past several months have passed Resolutions of Support for the Illinois Oil Production Industry. Collectively, these 17 counties account for 90 percent of the state’s more than 8 million barrels of annual oil production.

These non-binding resolutions formally express that the respective county boards support and encourage the presence and further growth of the oil production industry in their county. The resolutions recognize the thousands of jobs the industry creates and supports in these counties, and the millions of dollars in sales and property tax revenues the industry generates.

The passage of these resolutions directly counter the common misconception that oil and natural gas development is widely unpopular.

“Every year the industry is attacked by outside groups who seek legislation that would effectively put a vital economic engine out of business,” Illinois Oil and Gas Association (IOGA) President Bryan Hood said. “These resolutions demonstrate that folks from the region of the state where production actually occurs are not in favor of policies that would adversely impact the industry.”

As IPRB has highlighted before, the Illinois oil production industry is responsible for more than 4,000 direct jobs – supporting more than 14,000 Illinois jobs overall – generating $770 million in annual personal and business income. The industry also generates $330 million in annual state tax revenue and $3 billion in overall economic impact in the Land of Lincoln. A vast majority of Illinois’ direct oil production industry jobs are based in the counties that have passed the above resolutions, while more than $82 million in local property tax revenues were generated from 2007-2018 in those 17 counties.

“The passage of these resolutions in counties collectively responsible for 90 percent of Illinois oil production clearly illustrates the strong support for the oil production industry in the area of the state where a vast majority of production occurs,” Illinois Petroleum Resources Board (IPRB) Executive Director Seth Whitehead said. “For more than a century, the industry has provided employment opportunities, tax revenue and school funding in a region of the state that is in dire need of all three. IPRB applauds the leadership of these counties for recognizing the importance of the industry to their communities.”

Signed copies of the resolutions that have passed in each of the 17 counties can be downloaded at the following links.


Guest Column: Oil and Gas Indeed ‘Essential’ to Combating Coronavirus

Editor's Note: The following guest column was recently published in the Robinson Daily News, Lawrence County Daily Record and Villagers Voice.

Some Illinoisans may be surprised to learn that Gov. J.B. Pritzker’s shelter-in-place executive order aimed at slowing the spread of the coronavirus designates the oil and natural gas industry under the “essential” business and services category. “Keep It In the Ground” groups no doubt object. But the governor’s recognition of the vital importance of the oil and gas industry is actually spot-on, underscoring how big of a threat that movement’s stated goal of destroying this essential industry is to public health and our nation’s economic security.

As daunting as the coronavirus pandemic has been, the prospect of tackling this crisis without the products and services the petroleum industry provides would be almost unconscionable. Most notably, health care professionals use a myriad of petroleum-based products every day to treat patients afflicted with COVID-19 and literally save lives.

IV bags, ventilator machines, hospital gowns, gloves and the 3.5 billion face masks used by medical professionals a year are comprised of or include components of single-use plastics. Doctor’s scrubs, sterilization trays and monitors are also made of plastic or include petroleum products. Even hand sanitizers, soaps and some medicines are derived from petroleum, while critical procedures such as X-rays and MRIs would not be possible without oil and gas.

Single-use plastic bags are also key to fighting the spread of COVID-19. This explains why New York, Maine and the City of Boston are all pumping the brakes on single-use plastic bag bans, while Gov. Pritzker has advised Illinois grocery stores to prohibit shoppers from using reusable bags until the crisis subsides.

To be clear, plastic waste is unnecessary and harmful to the environment. However, plastic and petroleum products are clearly vital components of our healthcare system and overall efforts to fight this pandemic, illustrating why we can’t simply keep oil and gas in the ground.

It would also be difficult to imagine where we would be if our diesel-powered over-the-road truckers were unable to deliver the products Americans need to weather this storm. Medicines, food and critical supplies would simply not be available if transportation fuels were not abundant and affordable. There’s an old saying that if it’s on your table, thank a trucker. But if the food on your table came from a grocery store, you should also thank an oil and gas worker, too.

Petroleum-based technology such as computers and cell phones also allow an unprecedented number of people to work from their homes and adhere to the social distancing safety precautions issued by the governor. Along with home heating and reliable electricity, these are all products and services made possible by fossil fuels such as oil and natural gas that many Americans take for granted.

So imagine a world in which the “Keep It In the Ground” movement’s stated goals were achieved and we were forced to make due without all these essential products and services. Affordable, reliable energy and thousands of products made from petroleum are absolute necessities. Gov. Pritzker has dubbed the oil and natural gas industry essential for good reason.

That said, Illinoisans can continue to rely on the 14,000-plus Illinois oil and natural gas industry workers to deliver the energy and products they need even as many of them face potential layoffs in the wake of the oil price crash and the economic uncertainty all Americans will feel as a result of this crisis. Times are tough. But much like the oil and gas industry itself, perseverance is essential.

Seth Whitehead

Executive Director

Illinois Petroleum Resources Board

The Illinois Petroleum Resources Board (IPRB) is a non-profit organization that provides public awareness and education programs regarding the Illinois oil and natural gas production industry. IPRB also works to clean up and restore abandoned oilfield sites throughout the state. IPRB programs are funded entirely by voluntary contributions of oil and natural gas producers and royalty owners in Illinois.


Chicago Tribune Letter to the Editor: Column on Production Cut Deal Misleading

Editor's Note: The following letter to the editor was submitted by IPRB to the Chicago Tribune on April 21 but has not been published by the paper.

A recent Chicago Tribune column headlined “Trump’s push for higher gas prices is misguided” hasn’t aged well for a number of reasons.

First of all, gasoline prices have actually declined significantly since the announcement of the deal to cut global oil production that the president helped broker. Pump prices could even drop below $1 a gallon, as oil prices continue to be extremely low due to the unprecedented demand shock attributable to the coronavirus pandemic.

Any policy aimed at deliberately raising gasoline prices would be insane to say the least – especially in an election year – and to suggest it was the president’s intent to do so is disingenuous. That is just one reason the columnist’s argument that the president’s actions were “overtly placing the needs of one industry above the interests of the average person” is also misleading.

It is important to remember why gasoline prices have been affordable for Americans for so long in the first place. U.S. oil and natural gas industry innovation over the past decade has allowed the United States to emerge as the world’s leading producer, become a net petroleum exporter, slash OPEC imports by 75 percent and make $3 gasoline a distant memory. And not only has the U.S. oil and natural gas industry kept pump prices low for American consumers, it is responsible for far more jobs than the columnist indicates.

The columnist’s states there are “only about 145,000” oil and gas extraction jobs in the U.S. But the upstream industry is actually directly responsible for more than three times that number of jobs, according to a recent Texas Independent Producers and Royalty Owners report. That report shows that the U.S. oil and natural gas industry directly employs more than 880,000 Americans overall, including 14,000-plus Illinoisans. Most of these jobs are high-skill, high-demand occupations, which explains why the average oil and natural gas industry wage is more than twice the private sector average. These jobs don’t exist in a vacuum, either. They bolster other industries, which is why the American Petroleum Institute estimates the industry supports 10.3 million U.S. jobs.

All this considered, a real gift to Russia and Saudi Arabia would be allowing the U.S. oil and natural gas industry to collapse and enabling hostile – and far less environmentally conscious – nations to reclaim the global market share they lost when the United States emerged as the world’s top producer.


IPRB Letter to Gov. Pritzker: Oil and Natural Gas Industry Indeed 'Essential'

April 2, 2020

The Honorable Governor JB Pritzker

207 State House

Springfield, IL 62702

Dear Governor Pritzker,

I wanted to take a moment to thank you for designating the Illinois oil and natural gas industry as an “essential” industry in your recent shelter-in-place executive order. This has allowed our industry’s 14,000 workers carry out necessary day-to-day operations to help the state combat the COVID-19 crisis.

As your executive order correctly acknowledges, it is indeed essential for oil and natural gas workers to be able to execute their daily responsibilities in order to produce and transport the products and services Illinoisans need during these trying times. In addition to providing fuels and manufacturing feedstock necessary to transport and produce essential products and services, oil and natural gas are also critical to providing our healthcare industry the tools it needs to fight this pandemic.

IV bags, ventilator machines, hospital gowns, latex gloves and the 3.5 billion face masks used by medical professionals each year are comprised of or include components of single-use plastics. Doctor’s scrubs, sterilization trays and monitors are also made of plastic or include petroleum products. Even hand sanitizers, soaps and some medicines are derived from petroleum, while critical procedures such as X-rays and MRIs would not be possible without oil and gas. Petroleum-based technology such as computers and cell phones also allow an unprecedented number of people to work from their homes and adhere to the social distancing safety precautions you have mandated.

I encourage your staff to reach out at any time for more information on the essential nature of the Illinois oil and natural gas industry and petroleum in general.

Sincerely,

Seth Whitehead

Executive Director, Illinois Petroleum Resources Board

View PDF of letter