IPPA, industry groups call on DoE to avoid using emergency authorities

The Independent Petroleum Association of America (IPPA) urged U.S. Secretary of Energy Rick Perry on Thursday to refrain from imposing U.S. Department of Energy (DoE) emergency authorities that would provide support to a particular class of power plants.

The American Exploration & Production Council (ACPC), the Association of Energy Service Companies (AESC), the International Association of Drilling Contractors (IADC), and 10 additional organizations from Colorado, Florida, Kansas, Oklahoma, Pennsylvania, and Texas joined IPPA in issuing the call.

“Collectively, these groups represent the thousands of independent oil and natural gas explorers and producers, as well as the service and supply industries that support their efforts, that will be the most significantly affected by the actions resulting from this regulatory proposal,” the letter stated. “Independent producers drill about 90 percent of American oil and gas wells, produce 54 percent of American oil and produce 85 percent of American natural gas.”

Independent producers, the letter continued, have “succeeded in dramatically increasing production of natural gas,” achieving environmental benefits and lower electricity prices. Forestalling the retirement of “older, uneconomic generators” could derail that progress, the groups argued.

The letter also noted that PJM Interconnection has argued that DoE does not need to take “precipitous, immediate action” and that “there is no immediate threat to system reliability.” IPPA and other groups also argued that the Federal Energy Regulatory Commission (FERC) can work with stakeholders “if changes in the pricing of power are necessary.”

“All energy sources have experienced cycles in production and/or demand,” the letter continued. “The decreased demand for coal and nuclear energy, particularly within PJM, is due in large part to the abundance of lower-cost natural gas and overall decreases in power demand. The independent producers urge the secretary to focus the department’s efforts on encouraging production and use of all fuels — a result that can only be achieved by rejecting calls to artificially inflate one source over another. FERC and the independent system operators can continue with their efforts to ensure the reliability and resiliency of our nation’s electric grid.”