"2012 ought to be a great year for the petroleum industry," says Ben Sheppard, Permian Basin Petroleum Association president.
He says the outlook is good for more reasons than one. Sheppard says supply and demand fundamentals are solid. There's currently around 400 rigs running in the Permian Basin, and he expects robust drilling and operations to continue.
Sheppard also says prices should remain high. "Unless we have some big trouble in Iran or somewhere else in the Middle East that might cause supply concerns, prices should stay high if not go higher."
While there are a lot of positives for the industry, Sheppard says there are a few negatives we need to keep an eye out for.
One concern involves hydraulic fracturing and the EPA. Sheppard says, "the proposal to look at the hydraulic fracing process including trucking, transportation, water use and reuse are going to occupy a lot of interest this year."
But the most immediate danger the industry faces is the possible listing of the sand dune lizard. The comment deadline is January 18, and the U.S. Fish and Wildlife Service will make their final decision in June. Sheppard remains optimistic. "We have some new research that's been conducted out there. We think it's going to continue to bolster the position that the conservation efforts underway and the facts are the lizard does not justify an endangered listing."
Sheppard also says we need to keep an eye out for the lesser prairie chicken. Fish and Wildlife is expected to come out with a listing proposal for that species this summer. Over a hundred other species are expected to follow.
We also need to pay close attention to the current EU economic crisis and tensions in the Middle East. I'll talk more about that next Thursday on Big 2 News at 10pm.
And, of course, there's one more big thing coming up this year that could potentially be game changer for the energy industry - the presidential election. I'll be taking a look at each of the candidates and their energy policies later this year.