Illinois Oil Reserves Generated $4.3M in Property Tax Revenue in 2018

Recently posted Illinois Department of Revenue (IDOR) data show that Illinois oil and natural gas reserves generated more than $4.3 million in property tax (ad valorem) revenue in 2018. Of that total, more than $3.9 million was generated in Illinois’ top-15 oil producing counties, where 90 percent of the state’s oil production occurs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All of this revenue stayed at the local level and more than half went to fund K-12 public schools in the counties in which oil and natural gas reserves are located. That fact considered, IPRB conservatively estimates that at least $2.15 million of this revenue went to fund K-12 education in producing counties, including $1.95 million in the top-15 producing counties.

The rest of the $4.3 million in revenues went to fund county governments, road and bridge projects, local townships, local community college districts, public libraries, local hospitals, fire departments and park districts in producing counties.

Notably, oil and natural gas reserve property tax revenue collected in 2018 is based on 2017 assessments of active leases using 2016 production totals and average price of oil over a two-year period prior to the assessment date. The assessments are also based on estimated reserves that remain in the ground, not production. There are also assessment reductions for leased oil and natural gas reserves based on age, secondary recovery and methods of production.

A previous IPRB report released in the summer of 2019 finds Illinois oil and natural gas reserves generated more than $89 million in revenue from 2007-2017. Find out more about that report here.

2019 oil and natural gas reserve property tax revenues are not yet available on the IDOR website.

 

 

 

 

 

 


More Than Two Dozen Studies Find Fracking Poses No Significant Threat to Groundwater

“Keep It In the Ground” activists have claimed for years that hydraulic fracturing (“fracking”) poses an inherent threat to groundwater while deriding those who challenge the claim as “science deniers.” But there is actually no denying the fact that an overwhelming and growing body of scientific evidence shows fracking poses no significant threat to groundwater. No fewer than 29 scientific studies have reached that conclusion.

The current body of research – which includes 15 peer-reviewed papers and eight reports commissioned by regulatory agencies – has examined more than 14,500 water wells across the United States and found no evidence of systemic water contamination issues. Many of the studies examined groundwater pollution and specifically ruled out fracking as the cause. Two of the more than two dozen studies that find no evidence of groundwater impacts from fracking were even partially funded by anti-fracking groups.

Perhaps most notably, a 2016 U.S. Environmental Protection Agency study concluded that, “[H]ydraulic fracturing operations are unlikely to generate sufficient pressure to drive fluids into shallow drinking water zones.” The Obama administration’s EPA reached this conclusion even after expanding the definition of fracking to include virtually every oilfield activity imaginable, thus demonstrating the safety of the entire development process.

As Daniel Raimi, a senior research associate from environmental think tank Resources for the Future, noted in his 2017 book “The Fracking Debate”:

“To date, there is no research that indicates that the health of people living near oil and gas wells has been — or is likely to be — harmed by exposure to the chemicals mixed in with fracking fluid.”

The science is settled – fracking poses no significant threat to groundwater. Here is a review of the scientific research on the subject to date.

Peer-Reviewed Studies

  • California Council on Science & Technology (2015): This peer-reviewed independent study by the nonpartisan, not-for-profit CCST and Lawrence Berkeley National Laboratory concluded: “We found no documented instance of hydraulic fracturing or acid stimulations directly causing groundwater contamination in California." (study link)
  • Duke University (2017): Duke researchers evaluated water samples from 112 drinking water wells in West Virginia’s portion of the Marcellus Shale using state-of-the-art isotopic tracers to determine whether or not detected salinity, trace metals and hydrocarbons such as methane were from the fracking process. The researchers concluded, “Based on consistent evidence from comprehensive testing, we found no indication of groundwater contamination over the three-year course of our study.” The study was partially funded by the anti-fracking Natural Resources Defense Council (NRDC). (study link)
  • Duke University/United States Geological Survey (2013): Duke and USGS researchers examined the water quality of 127 shallow domestic wells in the Fayetteville Shale and found no evidence of contamination, concluding: “This new study is important in terms of finding no significant effects on groundwater quality from shale gas development within the area of sampling. … Although preproduction water-quality data were lacking for the wells sampled for this study, geochemical data presented a well-defined pattern of geochemical evolution based on natural rock-water and microbially mediated processes, strongly suggesting that the resulting water quality is derived from these natural processes with no effects from gas-production activities.” (study link)
  • Gradient (2013): Researchers from environmental risk research firm Gradient released two peer-reviewed studies finding no impacts from shale development. One report states, “Overall, there is no scientific basis for significant upward migration of HF fluid or brine from formations in sedimentary basins. Even if upward migration from a target formation to potable aquifer were hypothetically possible, the rate of migration would be extremely slow and the resulting dilution of the fluids would be very large…Given the overall implausibility and very high dilution factor, this exposure pathway does not pose a threat to drinking water resources.” (study link)
  • National Energy Technology Laboratory (2014): In what the Associated Press called a “landmark study,” NETL researchers injected tracers into the hydraulic fracturing fluid in a well in Greene County, Pa., to track for any signs of possible migration. After 12 months of monitoring, the researchers found no signs of this happening. The report concluded: “Current findings are: 1) no evidence of gas migration from the Marcellus Shale; and 2) no evidence of brine migration from the Marcellus Shale.” (study link/alternate link)
  • National Groundwater Association (2013): NGA researchers tested 1,701 water wells in northeastern Pennsylvania and found that “methane is ubiquitous in groundwater indicating that, on a regional scale, methane concentrations are not correlated to shale-gas extraction.” (study link)
  • Penn State University (2018): PSU researchers analyzed 11,000 groundwater samples collected near 1,385 unconventional natural gas wells in Pennsylvania’s most heavily drilled Marcellus Shale county. The report states that the researchers found “no statistically significant deleterious impact on ten analytes related to the aggressive increase in development of unconventional shale-gas since 2008” and “an overall trend of improving water quality” in Bradford County “despite heavy Marcellus Shale development.” (study link)
  • Stanford University (2015): According the report’s press release, “Using innovative techniques such as isotopic ‘tracer’ compounds that distinguish the source of chemicals in well water, [Lead researcher Rob] Jackson has not found evidence that frack water contaminants seep upward to drinking-water aquifers from deep underground.” (study link)
  • Syracuse University (2015): SU researchers evaluated 11,309 randomly selected drinking water wells throughout northeastern Pennsylvania and concluded: “There is no significant correlation between dissolved methane concentrations in groundwater and proximity to nearby oil/gas wells.” (study link) 
  • University of Cincinnati (2018): UC researchers collected 180 groundwater samples before, during and after drilling was conducted in the most heavily drilled counties in Ohio’s Utica Shale over a four-year period. The researchers concluded, “We found no relationship between CH4 concentration or source in groundwater and proximity to active gas well sites” and noted “… our data do not indicate any intrusion of high conductivity fracking fluids as the number of fracking wells increased in the region.” Notably, the study was partially funded by the anti-fracking David & Sara Weston Foundation and the Deer Creek Foundation. (study link)
  • United States Geological Survey (2017): USGS researchers randomly sampled 116 water wells across the Eagle Ford, Fayetteville and Haynesville shale plays and used chemical, isotopic, gas and groundwater-age tracers to thoroughly evaluate those samples. The researchers concluded that low concentrations of methane and benzene detected were likely naturally occurring and not attributable to shale development, and that “UOG [unconventional oil and gas] operations did not contribute substantial amounts of methane or benzene to the sample drinking-water wells.” (study link)
  • University of Texas-Austin (2018): UTA researchers evaluated hundreds of water samples from 450 water wells across a 12-county study area located in Texas’s Barnett Shale. They concluded: “[H]ydraulic fracturing [fracking] has not affected shallow groundwater drinking sources in [the Barnett Shale] area.” (study link)
  • University of Texas-Austin (2016): UTA researchers evaluated samples from 784 freshwater wells in the Barnett, Haynesville, Eagle Ford and Delaware Basin shale plays in Texas. They found that the presence of high dissolved methane concentrations in the wells “are likely natural” and not related to fracking. (study link)
  • Yale University (2018): Yale researchers analyzed eight monitoring wells located in the Marcellus Shale in Susquehanna County, Pa., over a two-year period before, during and after seven shale gas wells were drilled, hydraulically fractured and brought into production. The researchers concluded, “Collectively, our observations suggest that [shale gas development] was an unlikely source of methane in our valley water wells.” (study link)
  • Yale University (2015): Yale researchers found no indication of contamination from the fracking process itself in a study area located in the Marcellus Shale in northeastern Pennsylvania. As the researchers explain, “We found no evidence for direct communication with shallow drinking water wells due to upward migration from shale horizons.” (study link)

Government Agency Reports/Evaluations

  • Groundwater Protection Council (2011): Based on an evaluation of Texas state data from 1993 to 2008 and Ohio state data from 1983 to 2007, the GWPC report concludes, “Neither state [Ohio and Texas] has documented a single occurrence of groundwater pollution during the site preparation or well stimulation phase of operations.” (report link)
  • New York State Department of Environmental Conservation (2011): This NYDEC report states, “A supporting study for this dSGEIS concludes that it is highly unlikely that groundwater contamination would occur by fluids escaping from the wellbore for hydraulic fracturing. The 2009 dSGEIS further observes that regulatory officials from 15 states recently testified that groundwater contamination as a result of the hydraulic fracturing process in the tight formation itself has not occurred.” (report link)
  • Susquehanna River Basin Commission (2016): The SRBC analyzed data from July 2008 until December 2013, a period of time when the Marcellus Shale industry was most active in Pennsylvania, and determined, “To date, the Commission’s monitoring programs have not detected discernible impacts on the quality of the Basin’s water resources as a result of natural gas development, but continued vigilance is warranted.” (report link)
  • United States Department of Energy (2009): This DOE study, conducted in cooperation with the National Energy Technology Laboratory (NETL) and Groundwater Protection Council (GWPC) concludes, “[B]ased on over sixty years of practical application and a lack of evidence to the contrary, there is nothing to indicate that when coupled with appropriate well construction; the practice of hydraulic fracturing in deep formations endangers ground water. There is also a lack of demonstrated evidence that hydraulic fracturing conducted in many shallower formations presents a substantial risk of endangerment to ground water.” (report link)
  • U.S. Environmental Protection Agency (2016): EPA’s six-year study found nothing to suggest that fracking is a serious risk to groundwater. While the agency made some wording changes to its previous topline finding that fracking has not caused “widespread, systemic” impacts to groundwater, the data in the report did not change from the draft version. The report states, “[H]ydraulic fracturing operations are unlikely to generate sufficient pressure to drive fluids into shallow drinking water zones.” (report link)
  • United States Geological Survey (2014): The USGS and West Virginia Department of Environmental Protection’s Division of Water and Waste Management compared samples with historical water quality data in an area where drilling and hydraulic fracturing was occurring in the Monogahela River Basin during 2011-12. Researchers found that water quality in the area compared to historical data was not impacted by energy development: “The comparison of groundwater data from this study with historical data found no significant difference for any of the constituents examined and therefore warrant no further discussion.” (report link)
  • United States Government Accountability Office (2012): The U.S. GAO consulted regulatory officials in eight states who explained, based on their own state investigations, that “the hydraulic fracturing process has not been identified as a cause of groundwater contamination within their states.” (report link)
  • Wyoming Department of Environmental Quality (2019): A six-year-long WDEQ investigation determined that groundwater contamination near Pavillion, Wyo., is not connected to nearby hydraulic fracturing operations, debunking long-held claims to the contrary by anti-fracking groups. The report states: “Evidence does not indicate that hydraulic fracturing fluids have risen to shallow depths utilized by water-supply wells. Also, based on an evaluation of hydraulic fracturing history, and methods used in the Pavillion Gas Field, it is unlikely that hydraulic fracturing has caused any impacts to the water-supply wells." (report link)

Other Reports

  • The Academy of Medicine, Engineering and Science of Texas (2017): This two-year study by TAMEST – which is comprised of academics from a wide range of universities, industry experts and state regulators – analyzed the overall impacts oil and gas development has had on Texas, including water quality, and concluded, “The depth separation between oil-bearing zones and drinking water-bearing zones in Texas makes direct fracturing into drinking water zones unlikely, and it has not been observed in Texas.” (report link)
  • Cardno Entrix (2012): This study, focusing on water wells in the Inglewood, Calif., oil field concluded, “Before-and-after monitoring of groundwater quality in monitor wells did not show impacts from high-volume hydraulic fracturing and high-rate gravel packing.” (study link)
  • The Center for Rural Pennsylvania (2011): CRP researchers evaluated water sampled from 233 water wells in proximity to Marcellus gas wells in rural regions of Pennsylvania in 2010 and 2011. Among these were treatment sites (water wells sampled before and after gas well drilling nearby) and control sites (water wells sampled though no well drilling occurred nearby). The report concludes, “In this study, statistical analyses of post-drilling versus pre-drilling water chemistry did not suggest major influences from gas well drilling or hydrofracturing (fracking) on nearby water wells, when considering changes in potential pollutants that are most prominent in drilling waste fluids.” (report link)
  • German Federal Institute for Geosciences and Natural Resources (2016): In this study, German geologists used computer simulations to study what would happen to frack fluids when injected into the bedrock of the North German basin and found “… that the injected fluids did not move upwards into layers carrying drinking-water.” (study link)
  • University of Michigan (2013): This report states that: “The often-postulated percolation upward of fracking water used in deep, long lateral well extensions to contaminate drinking water aquifers near the surface through the intervening impermeable rock formations is highly unlikely and has never reliably been shown to have occurred.” (study link)
  •  University of Michigan (2013): Based on meetings between the report’s authors and officials from Arkansas, Colorado, Louisiana, North Dakota, Ohio, Oklahoma, Pennsylvania and Texas, the report states there has been “… no report of groundwater contamination in these states was associated with hydraulic fracturing.” (report link)

 

 


Four GHG Reduction Options the ‘Keep It In the Ground’ Movement Opposes or Dismisses

Reducing carbon dioxide (CO2) emissions is priority No. 1 in the global effort to mitigate global warming. So it remains a bit mystifying that a vast majority of climate activists oppose or dismiss several proven CO2 reduction options in favor of a narrow set of deeply flawed policies that would rely almost exclusively on intermittent wind and solar energy to reduce emissions.

The most recent example of the folly of this philosophy is an independent fiscal watchdog report that slams New York state-level version of the Green New Deal, a plan that was heavily lobbied for by “Keep It In the Ground” groups.

Not only did the Citizens Budget Commission (CBC) report criticize New York’s win-and-solar focused plan as being unnecessarily costly for consumers, it noted the plan would be “counterproductive” to emission reduction targets. Why? Because of the state’s focus on renewables over nuclear, natural gas and the kind of “all-of-the-above” approach necessary to not only actually reduce emissions, but do so in a way that won’t devastate the economy.

The report underscores the fact that the “Keep It In the Ground” movement’s push to implement its preferred wind-and-solar-only solutions seem more driven by its war on fossil fuels than a desire to reduce CO2 emissions as much as possible. And amidst all the climate alarm sweeping the country, there remains a fundamental lack of understanding regarding the limitations of wind and solar energy – as well as a general lack of awareness of other energy sources and mitigation options that can be used alongside renewables to more effectively reduce emissions.

IPRB would like to take a few moments to take a closer look at four CO2 emission reduction measures that climate activists either wrongly overlook or outright oppose.

Natural Gas

Increased natural gas use is the No. 1 reason the United States leads the world in CO2 reductions this century. The fuel emits roughly have the carbon dioxide as coal when combusted and has become the top electricity generation fuel in the United States over the past decade.

In fact, the U.S. Energy Information Administration (EIA) has credited fuel switching to natural gas for electricity generation for 60 percent of U.S. power sector CO2 emission savings since 2005. Fuel switching to natural gas is also responsible for 57 percent more CO2 savings in the power sector than renewables during that time, as the following Energy In Depth graphic illustrates.

Overall United States energy-related CO2 emissions have declined 13 percent since 2005. Some “Keep It In the Ground” activists have claimed methane leaks from the natural gas supply chain wipe out natural gas’ climate benefits. But Breakthrough Institute climate scientist Zeke Hausfather has thoroughly debunked this narrative, noting that U.S. CO2 reductions remain in the 10 to 11 percent range since 2005 when the effects of methane leakage are taken into account.

Fuel switching to natural gas is a proven option to reduce CO2 emissions, period, and also serves as a necessary backup to intermittent wind and solar power generation, which cannot be currently stored at the level (and cost effectiveness) necessary to provide baseload power and meet peak demand. Nonetheless, “Keep It In the Ground” activists favor banning hydraulic fracturing – the technology that has made natural gas more abundant and affordable than any time in history.

Natural gas holds even more potential to reduce CO2 emissions when coupled with another technology that “Keep It In the Ground” activists suspiciously oppose.

Carbon Capture and Storage (CCS)

Carbon capture and storage (CCS) – the direct capture of carbon dioxide from power plants, industrial facilities, mobile emission sources and the atmosphere – is a rapidly developing technology that has been identified by the United Nations Intergovernmental Panel on Climate Change (IPCC) as being pivotal to reducing emissions and avoiding the worst impacts of climate change. However, the technology isn’t popular at all among many “Keep It In the Ground” purists, due to the fact that it would prolong fossil fuel use indefinitely.

Interestingly, the primary reasons carbon CCS isn’t already widely used – cost-effectiveness – mirrors one of the key obstacles keeping wind and solar from being implementable on a large-scale basis. But a key breakthrough was made just last month that could go a long way toward solving the CCS affordability issue.

Researchers from the Massachusetts Institute of Technology (MIT) recently published a study detailing how a battery-like device can suck CO2 directly from the atmosphere and store it at a relatively low price ($50-$100 per ton of CO2).

Electro-swing adsorption for high efficiency carbon capture from Sahag Voskian on Vimeo.

Just as importantly, this potential large-scale CCS technology could be applied to automobiles and planes, and could also possibly be used for enhanced oil recovery (EOR), proving not only to be a key tool in addressing climate change but producing the oil the world will need for decades to come.

Even the Natural Resources Defense Council (NRDC) has called CO2-EOR a win-win-win for our environment, energy, and economy. CO2-EOR is currently responsible for 450,00 barrels of oil production per day in the United States and holds the potential to revive mature oil fields such as those that dominate the Illinois Basin.

A pilot CCS natural gas-fired power plant in Texas has also recently been labeled a “great success,” and developers are currently evaluating sites for a commercial version of the plant. Bloomberg also recently reported that a leading CCS company is planning to build a plant in Texas designed to remove one million tons of CO2 from the air annually (equivalent of 250,000 cars) at a cost of $100-$200 per ton removed. If the plant is successful, the company will build hundreds and eventually thousands of similar plants throughout the world. A recent Global CCS Institute report indicates nearly 2,000 such facilities will need to be built by 2040 in order to meet climate change mitigation targets.

Fortunately, a new peer-reviewed study finds there is enough potential underground CO2 storage to meet Paris climate agreement targets. So if costs continue to fall, CCS should be a viable tool to reduce CO2 emissions in the decades ahead.

Nuclear

Nuclear power generation emits no CO2 and currently represents 20 percent of the U.S. power generation mix. Though it doesn’t get nearly as much attention as wind and solar, nuclear energy has far outpaced those technologies in significantly reducing CO2 emissions from the power sector. In fact, as Forbes columnist Michael Shellenberger noted earlier this year that “the only green new deals that have ever worked were done with nuclear, not renewables.”

Shellenberger identifies France and Sweden as the only major nations that have decarbonized their power sectors. France gets 88 percent of its electricity from non-carbon sources, with 72 percent coming from nuclear, another 10 percent from hydro and just six percent from wind and solar. Similarly, Sweden gets 95 percent of its power from non-carbon sources, but 42 percent comes from nuclear, 41 percent from hydro and just 17 percent from wind, solar and other renewables.

Though nuclear energy isn’t perfect (no energy source is) it would certainly seem to be a viable option for a movement that characterizes global warming is an existential threat. However, a fact sheet that was released as part of the Green New Deal rollout calls for nuclear phase-out.

Reforestation

A recent peer-reviewed study shows that increasing the earth’s forests by an area the size of the United States would cut global CO2 by 25 percent. The study’s senior author boasted that his study “shows clearly that forest restoration is the best climate change solution available today” and would return CO2 levels to what they were 100 years ago.

Planting trees is also the most cost-effective CO2 emission mitigation option, with costs of just $15 to $50 per ton of carbon dioxide removed, according to a recent study by the National Academies of Sciences.

However, reforestation has not been prioritized Green New Deal advocates or the “Keep It In the Ground” movement. This could be traced to estimates that a 100 percent conversion to wind and solar energy could require as much as one-third of United States land space to be covered by solar panels and wind turbines. A massive increase in land use for rare earth mineral mining would also be required. Such an undertaking would obviously infringe upon any significant reforestation effort.

Conclusion

To be clear, wind and solar energy will no doubt be a major contributor to any and all efforts to reduce greenhouse gas emissions in the decades to come. However, they are not the panacea that many climate activists and proponents of the Green New Deal and the “Keep It In the Ground” movement make them out to be.

At the same time, a recent New York Times analysis concludes that even assuming 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.” Even assuming 100 percent compliance with Paris climate agreement targets, 48 percent of global energy will come from oil and natural gas in the decades to come. Put plainly – the world is still going to need a lot of oil and natural gas for a long, long time.

That is why an all-of-the-above approach including natural gas, rapidly improving CCS technologies, nuclear and reforestation is the best path forward. The “Keep It In the Ground” agenda and dogmatic focus on 100 percent wind and solar energy is not.


Depth Deception: How Activists Mislead Students and Educators on Well and Hydraulic Fracturing Depths

The following cartoon-like depiction of the hydraulic fracturing (“fracking”) process is currently being distributed to West Virginia schools by a retired educator-turned-“Keep It In the Ground”-activist.

The depiction shows the “fracking zone” – the area where hydraulic fracturing treatments occur in a horizontal wellbore – as being just below the water table, with fractures nearly extending into the above drinking water aquifer.

This depiction could not be more misleading and is intended to perpetuate the myth that fracking – both of the high volume horizontal variety that occurs in places like Texas, Pennsylvania and North Dakota, and the vertical well application that has been widely used in Illinois since the 1950s – is an inherent threat to groundwater. A similarly inaccurate depiction was also circulated to schools in a 2017 issue of the publication Junior Scholastic.

The reality of typical hydraulic fracturing and oil and gas well depths is reflected in the following Illinois State Geological Survey (ISGS) graphic (click image to enlarge).

The ISGS graphic accurately shows that the depth in which hydraulic fracturing occurs on conventional horizontal wells in Illinois far exceeds the height of the 110-story Willis Tower in Chicago.

It also shows the depth in which high volume hydraulic fracturing of horizontal wells in Illinois’ New Albany Shale – a practice has yet to take place in the Land of Lincoln – would occur at even greater depths than conventional vertical wells.

Not only is hydraulic fracturing conducted at tremendous depths below freshwater aquifers, thousands of feet of impenetrable rock separate the production zones being fractured from the freshwater aquifers above. It is simply physically impossible to generate enough energy to create fractures that extend thousands of feet vertically into freshwater aquifers.

Even the U.S. Environmental Protection Agency’s landmark 2016 hydraulic fracturing study concluded that,

“[H]ydraulic fracturing operations are unlikely to generate sufficient pressure to drive fluids into shallow drinking water zones.”

A 2012 peer-reviewed paper by research firm Gradient concluded,

“[T]here is no scientific basis for significant upward migration of HF fluid or brine from tight target formations in sedimentary basins.”

A second peer-reviewed paper from Gradient, featured in the journal Geophysical Research Letters, echoed these findings. The study concluded:

It is not physically plausible for induced fractures to create a hydraulic connection between deep black shale and other tight formations to overlying potable aquifers…”

That EPA study also notes that the median hydraulic fracturing treatment in the United States occurs 8,000 feet below the surface.

So, suffice it to say, the average K-12 student would never get the impression that fracking typically takes place thousands of feet below aquifers based on the graphic this particular activist chose to use.

The reality depicted in the ISGS graphic illustrates why no fewer than 31 scientific studies – including 17 peer-reviewed studies and nine reports commissioned by regulatory agencies – have concluded fracking is not a major threat to groundwater.

 

Oil & Gas Careers: High Paying and In Demand

Oilprice.com recently published a rather ominous article headlined “Oil Industry Faces Imminent Talent Crisis.” That headline was prompted by a survey by an energy recruitment company that found nearly half of the exploration and production firms that responded were “either quite worried or very worried about an impending talent crisis.”

The concern can be traced to a harsh reality with regard to millennials and their general attitudes toward the oil and gas industry: Young people believe we are quickly transitioning away from fossil fuels and that the future of the industry is bleak. As a result, fewer young people are pursuing oil and gas industry careers. But the facts simply do not support the impetus for this trend.

Oil and natural gas consumption is projected to increase by more than 20 percent over the next 30 years, which explains why oil and natural gas careers are not only in high demand – but pay twice the private sector average salary.

Here are some facts that young people entering the workforce should consider:

  • The average oil and natural gas industry salary was $112,712 in 2018.
  • Three of the top six highest paying majors are directly tied to the oil and gas industry.
  • The top 10 highest starting salaries are in occupations directly or indirectly tied to oil and gas.
  • The oil and gas extraction industry was the fastest growing sector in 2018.
  • The U.S. oil and gas industry supports more than 10 million American jobs.
  • There are more than 75 different careers in the oil and gas industry.

Contrary to popular public perception, the future of oil and natural gas careers is very bright. Check out IPRB’s new Oil and Natural Gas Careers “By the Numbers” infographic for more facts on oil and natural gas careers.

 


Data Show Oil and Gas Have Greatly Benefited Humanity

Opponents of the oil and natural gas industry have stepped up their hyperbolic rhetoric of late. One prominent “Keep It In the Ground” media figure has gone so far as to claim the industry will “fatally injure the whole freaking planet,” while the Natural Resources Defense Council has claimed fossil fuels have “exacted an enormous toll on humanity.”

The latest real-world data tell a far different tale, showing that global extreme poverty has declined dramatically and life expectancy has more than doubled as use of oil and natural gas have skyrocketed over the past 100-plus years.

As the above IPRB charts show, the latest World Bank data show that the percentage of people living in extreme poverty has declined from more than 80 percent in the late 1800s to less than 10 percent in 2015 – the lowest percentage on record. At the same time, oil and natural gas consumption has gone from almost nothing to being the primary energy source in the world (increasing 11,472 percent, to be specific). Not coincidentally, the average global life expectancy has more than doubled since 1900.

It is not difficult to surmise why extreme poverty has declined and life expectancy has increased at the same time that oil and natural gas use has skyrocketed.

Extreme poverty can be traced to lack of access to modern energy – most notably electricity – which most of us take for granted. Fossil fuels not only provide electricity, they provide critical home heating and cooling, clean water, food production and transportation. These modern conveniences have improved the quality of life in the United States and other fortunate developed countries, leading directly to increased economic opportunity, a better quality of life and longer lives, in general.

Perhaps most importantly, countless modern healthcare technologies and devices – and access to quality medical care – would not be possible without oil and natural gas.

These are just a few facts we should keep in mind when key political figures claim, “I guarantee you we’re gonna end fossil fuel.”


Fact Sheet: Hydraulic Fracturing No. 1 Reason U.S. Leads World in CO2 Reductions

Southern Illinoisans Against Fracturing Our Environment (SAFE) hosted a “Get Off Fossil Fuels Festival” in Carbondale on Sunday as part of nationwide “Climate Week” activities aimed at addressing global warming.

So what is SAFE’s proposed climate change solution? Ironically, based on this WSIL-TV interview, it’s pushing for the elimination the very technology that has enabled the United States to lead the world in carbon dioxide (CO2) reductions this century. The Carbondale event served as a petition drive to ban hydraulic fracturing ("fracking) in Illinois, an action that would do nothing to reduce CO2 emissions. From the interview:

“The groups want Illinois to become the fifth state to ban fracking, something they say Governor JB Pritzker alluded to in his campaign. Organizer, Rich Whitney, says thousands have already signed their petition.”

Whitney told WSIL:

“’We're partnering with groups like Food and Water Watch and other groups that are helping in this effort. So, we’re confident that over the next couple of months we should be able to turn in thousands and thousands of signatures to Governor Pritzker to send this message: ‘Hey, let’s take care; let’s get off fossil fuels in Illinois.’”

Not only would a hydraulic fracturing ban – both at the state and/or federal level – prove to be an economic disaster, it would likely lead to an increase in CO2 emissions. And you don’t have to take our word for it.

As the following new IPRB fact sheet illustrates, numerous experts, including the Intergovernmental Panel on Climate Change (IPCC), International Energy Agency (IEA) and U.S. Energy Information Administration (EIA), credit increased natural gas use in the United States – made possible by fracking – for most of our country’s world-leading CO2 reductions over the past 15-plus years.

Even the Environmental Defense Fund – hardly an industry cheerleader – recently largely credited increased natural gas use for dramatic declines in CO2 emissions from electricity generation in recent years.

“Our analysis, published in Environmental Research Letters used an approach called index decomposition analysis and found that natural gas substituting for coal and petroleum coupled with large increases in renewable energy generation —primarily wind — were responsible for 60% and 30%, respectively, of the decline in CO2 emissions from the U.S. power sector between 2005 and 2015.”

Hydraulic fracturing has been safely used to complete vertical wells in the Illinois Basin for decades. More recently, it’s been applied to horizontal wells in places like the Permian, Williston and Appalachian basins to help the United States re-emerge as the world leader in oil and natural gas production.

Not only has the latter development strengthened our economy and enhanced our energy security – the recent attack on Saudi Arabian oil processing facility is just the latest example of the latter – it has helped the United States significantly reduce greenhouse gas emissions by allowing cheap and plentiful natural gas to replace higher-emitting fuels.

In the meantime, China has seen its CO2 emissions nearly triple. One would think that would be the focus of “Keep It In the Ground” groups such as SAFE, but they seem more intent on trying to destroy a local oil and gas industry that provides more than 14,000 jobs and $3 billion in annual economic impact.


Fracking ban would devastate economy, yield no climate benefits

Several presidential candidates have promised to ban hydraulic fracturing, a technology that is a major reason the United States leads the world in carbon dioxide (CO2) reductions this century, has enjoyed an unprecedented 10 consecutive years of economic growth and is on the brink of long-coveted energy independence. A fracking ban would likely reverse all of these trends, which is why International Energy Agency executive director Fatih Birol’s view that such a policy “would not be good news” for the United States is a massive understatement.

Read the full Southern Illinoisan op-ed here.


Important Context on Illinois Oil & Gas Production Methane Emissions

The Trump administration’s proposed revisions to Obama-era methane regulations on oil and natural gas systems received a lot of alarmist media coverage last week. But lost amidst all the ominous headlines from regional outlets were some largely overlooked key facts regarding emissions from the Illinois oil production industry and the adverse impact direct methane emission regulations would pose in the Land of Lincoln.

First and foremost, Illinois oil and natural gas production methane emissions – by any reasonable estimate – are negligible, likely accounting for less than .5 percent of overall U.S. oil and natural gas system methane emissions, as the following IPRB chart based on the most recent U.S. Environmental Protection Agency (EPA) data illustrates.

It’s not difficult to surmise why Illinois oil and natural gas methane emissions are inconsequential in the big picture. Illinois oil production accounts for less than one percent of total U.S. production and there is very little natural gas production in the state. Natural gas production accounts for more than half of overall U.S. oil and natural gas system methane emissions, according to the EPA.

As a soon-to-be-released Department of Energy methane report including the Illinois Basin will likely confirm, Illinois oil and natural gas methane emissions pose little to no climate change threat.

But in sharp contrast, direct methane regulations on the small, independent operators that dominate the Land of Lincoln would almost certainly adversely affect a local industry that is responsible for 14,000 Illinois jobs and $3 billion in annual economic impact.

Nearly half of Illinois oil production industry workers are independent owner/operators or independent contractors, while 83 percent of exploration and production firms with payroll have 10 or fewer employees. In other words – the Illinois industry is anything but “Big Oil.” Case in point: more than 90 percent of Illinois oil wells are “stripper” wells that produce one to two barrels per day.

The small operators most prevalent in the Illinois Basin would be adversely affected by requirements to purchase expensive equipment such as infrared cameras necessary to monitor methane leaks. These added costs could potentially force small operators to shut their doors altogether, or at the very least, shut down many of the state’s low-producing wells that provide royalty income to more than 30,000 – all while achieving virtually no climate benefit.

Of course, climate change is a global issue, so we would be remiss not to bring some global context to the discussion.

With regard to oil-related emissions specifically, overall U.S. petroleum system methane emissions are also low and have decreased significantly even as domestic production has skyrocketed. In fact, the most recent EPA Greenhouse Gas Inventory shows that U.S. petroleum system methane emissions represent just .58 percent of total U.S. greenhouse gas emissions, even when taking into account methane’s radiative forcing compared to carbon dioxide (25 times greater than CO2 over a 100-year time frame).

U.S. petroleum system methane emissions also represented just 5.7 percent of overall U.S. man-made methane emissions in 2017, and have declined 9.4 percent since 2013 at same time U.S. oil production increased 25 percent.

A recent Gas Technology Institute Center for Methane Research report also finds that just 12.4 percent of global methane emissions are attributable to oil and natural gas production. The report – based on the National Oceanic and Atmospheric Administration’s (NOAA) Annual Greenhouse Gas Index (AGGI), the 2016 Global Carbon Project’s Methane Budget and the 2017 EPA Greenhouse Gas Inventory – finds that methane emissions from the U.S. natural gas industry specifically accounted for just 1.2 percent of global methane emissions in 2016.

And that small piece of the global pie is only getting smaller.

The EPA and Energy Information Administration find that methane emissions from onshore U.S. oil and natural gas production fell 24 percent from 2011 to 2017 while oil and natural gas production rose 65 percent and 19 percent. A recent National Oceanic and Atmospheric Administration study also finds there has been “major overestimation” of industry’s methane emissions in some previous studies.

One under-reported reason U.S. oil and natural gas system methane emissions continue to decline is a 2012 EPA rule limiting volatile organic compound emissions (VOCs) from new and modified infrastructure. That rule effectively regulates methane, which is co-emitted along with VOCs – and it remains in place.

To be clear, methane emissions can and should be reduced as much as possible. But contrary to some recent media coverage, the industry  has been doing exactly that in recent years, and oil and natural gas methane emissions – particularly in Illinois – represent a very small sliver of global greenhouse gas emissions. The Trump administration’s proposed revisions to the Obama administration’s methane rule are unlikely to reverse those positive trends.


Report: Illinois Oil & Gas Reserves Generated $89M in Property Tax Revenue From 2007-2017

Many Illinoisans may not be aware that the state’s active oil and natural gas production leases are assessed and taxed as real estate, similar to property taxes paid on a residential home. All of the revenue collected from this tax – known as an ad valorem tax – stays at the local level and goes directly to support the areas where oil is produced, including counties, villages, townships, cities, and – most importantly – local schools.

An IPRB review of the latest Illinois Department of Revenue (DOR) data shows that Illinois oil reserves generated $89.17 million in ad valorem tax revenue from 2007 to 2017. IPRB details this revenue in a new report that can be downloaded here.

Typically, at least half of ad valorem property tax revenue is used to fund public education, while the remaining monies are used to fund various local public services. That fact noted, IPRB conservatively estimates that Illinois oil reserves generated at least $44.5 million in ad valorem tax revenue for schools in producing counties from 2007-2017. This revenue is all the more significant considering Illinois public schools were woefully underfunded by the state during this time frame, placing even more burden at the local level.

Ad valorem tax revenue from Illinois oil production has a particularly significant impact in major producing counties. DOR data show that ad valorem tax revenue in Illinois’ top-15 oil producing counties totaled $79 million from 2007-2017.

IPRB conservatively estimates that at least $39.5 million of that revenue went to public schools in those top-15 producing counties.

It is important to note that many of these counties have relatively small populations and are relatively poor compared to many other state counties and the state as a whole. In fact, all but one of Illinois’ top oil producing counties (Crawford) have poverty rates that are higher than the national average – adding even more significance to the ad valorem tax revenue generated by oil and natural gas reserves in these counties. Just two percent of Illinois' overall population resides in these top-15 producing counties, which are responsible for 90 percent of Illinois oil production.

Here are county-level breakdowns for Illinois' top-15 producing counties featured in IPRB’s report:

It is important to understand that these taxes are based on estimates of oil and gas reserves remaining in the ground, not oil and natural gas produced. The annual ad valorem tax bill that operators and royalty owners receive is also based on data that is over two years old. For example, ad valorem taxes paid in 2017 were based on a 2016 assessment of active leases that is calculated using 2015 production totals. There are also reductions for leases based upon lease age, secondary recovery methods used and production.

As complicated as the ad valorem tax calculation system may be, it is clear that these taxes are generating significant revenues in the communities where they operate, specifically for local schools.