Though commodity prices may still be strong, the domestic E&P industry still has a number of obstacles in its way, according to panelists at the Ernst & Young energy conference held in Houston recently. The number of drilling operators of record has gone down, as has the percentage of stripper oil wells versus total wells, said John Walker, outgoing IPAA chairman and chief executive of Houston-based EnerVest Management Partners Ltd. Natural gas production per well has also been in steady decline since the early 1970s, he added. This year, the estimated decline rate for gas production is about 30%. And while quarterly world oil product demand now sits at approximately 83,900 barrels per day, by 2006 Walker says it may climb to 85,600. As the U.S. need for petroleum grows, so does its tab for foreign petroleum imports. Current domestic production of 19 trillion cubic feet (Tcf) per year supplies 80% of natural gas demand, and in 2025, 70% of America's natural gas supply will come from the Lower 48. And while 1,451 Tcf of technical natural gas resources are located in the U.S. alone, he said it's not all being developed. "In the real estate business, it's all about location, location, location. In energy it's about lack of access, access, access," he said. A lack of common-sense politics, litigation problems and the time it takes to develop and acquire necessary technology are additional stumbling blocks, he added. To help illustrate the hurdles inherent in the oil and gas leasing and permitting process, Red Cavaney, chief executive of the American Petroleum Institute, presented flow charts that were both confusing and unreadable to the audience. "I don't expect for you to be able to read these," he quipped. "But know that this is what a company has to go through to drill a well... Our failure to view energy issues has resulted in ineffective energy policies." Walker said that new energy legislation has made some progress, but it's not enough. Full funding for the federal R&D budget, adequate funding for federal agencies to meet the requirements of the energy bill, increased access to the offshore and Alaska, and improved tax policies would be a good start, Walker said. Cavaney added, "We have to get off our duffs and get out there and meet people and tell them our story. Maybe it won't be pretty, but we need people to understand our issues."