Posted June 28, 2011
Fuel Fix: Study: Oil and Gas Investments Deliver Outsize Returns to Pension Funds: Although oil and natural gas assets were less than 5 percent of the holdings in some of the biggest state and federal pension funds from 2005 to 2009, they still delivered 15.7 percent of those plans' returns during that time period, according to a report released today. The study by Sonecon LLC was commissioned by the American Petroleum Institute, which is working to counter fresh calls to slash tax incentives long enjoyed by oil and gas producers...Robert Shapiro, Sonecon's chairman, and a former under secretary of commerce, said the study confirmed that oil and gas companies consistently delivered "relatively high returns" compared to other pension fund investments, even during lean economic times. Returns ranged from a low of 9.2 percent in Missouri to 22.9 percent in South Carolina. Shapiro noted that the stats show that even in the worst-performing state, Missouri, oil and gas stocks still "accounted for about three times a larger share of the total returns than they represented of the total assets." And in the top performer, South Carolina, the ratio was 10.4 to 1. "This tells us something about the strength of oil and gas companies in the United States," Shapiro said. "It also tells us something about where returns come from in an era in which there is a rising global demand for all commodities." The Oklahoman: Oil, Gas Extraction Pushes Oklahoma's Income Growth: For all of Oklahoma's history the natural resource sector has led the economy. This is true whether it was leading it up or leading it down. The sector, which includes oil and gas extraction, still leads the economy today. Up, as it happens. In the first quarter of 2011, the state's 2.5 percent growth in personal income ranked fifth in the nation. Oil and gas extraction was the leading contributor to the nonfarm portion of the Oklahoma economy...Gas prices lately have led to a visceral reaction against the energy industry, one that fails to take into account its contributions to state revenues and personal income. Every Oklahoman ought to be concerned about the anti-fossil fuel movement, from the attack on hydraulic fracturing to the assailable claims that renewable energy will soon run the world. What runs this state (and indeed runs agribusiness) is petroleum. Be glad we have so much of it.
The Brookings Institution: Drawing Down the Strategic Petroleum Reserve: Bad Policy, Bad Timing: President Obama's decision to draw down 30 million barrels of crude oil from the Strategic Petroleum Reserve (SPR), in concert with a similar drawdown by other members of the International Energy Agency, is ill-advised. The decision is at sharp odds with the reason that the SPR was originally created. For many years, the major focus of emergency oil supply planning has been the development of a strategic oil reserve program. Strategic stockpiling has been a part of U.S. defense policy since 1912 when President Taft set aside petroleum fields to ensure strategic stocks for the navy. In the aftermath of the embargo of 1973-1974 by the Organization of Arab Petroleum Exporting Countries (OAPEC), Congress passed the energy Policy and Conservation Act in 1975 authorizing the creation of a Strategic Petroleum Reserve Project Management Office (SPRO), which established for the first time the concept of a petroleum reserve for the civilian economy...The decision to use strategic stocks is never easy--crises by their very nature are difficult to predict and manage, making the use of one-time emergency measures a calculated gamble at beset. However, using the SPR to deal with high oil prices in a time of economic sluggishness is misguided--especially when crude prices are falling and both the administration and Congress seem unable to take measures for sustainable economic or energy security.
EENews: API's Dougher Says Keystone XL Pipeline Could Provide Long-Term Supply Relief: How much supply relief could the Keystone XL pipeline project provide to the United States? During today's OnPoint, Rayola Dougher, senior economic adviser at the American Petroleum Institute, discusses the project's regulatory hurdles and addresses price manipulation concerns. She also talks about the House's proposed Nov. 1 deadline for approval of the project.
Financial Times: U.S. Oil Recovery: Permian Basin Sees Reversal of Fortune: Joe Moroles recalls when business was so bad in the Permian Basin - two years ago - that restaurants were virtually empty. The Halliburton project co-ordinator for Chevron, the oil group, says servers were able to attend to the every need of the few customers. "You couldn't have half a glass of iced tea without someone filling it up," he says.
ABOUT THE AUTHOR
Rayola Dougher is senior economist at The American Petroleum Institute (API), where she analyzes information, manages projects and develops briefing materials on energy markets and oil industry policy issues. She is the author or co-author of economic research studies covering a diverse range of topics including crude oil and petroleum product markets, gasoline taxes, energy conservation and competition in retail markets. In addition to testifying before federal and state legislators, she has participated in numerous newspaper, radio and television interviews on a wide range of issues affecting the oil industry, including crude oil and gasoline prices, industry taxes and earnings, exploration and production, and refining and marketing topics.
Prior to joining API, Rayola worked at the Institute for Energy Analysis where her research focused on carbon dioxide related issues and international energy demand and supply forecasts. Rayola holds a Masters degree in Economic Development and East Asian studies from the American University and a degree in History and Political Science from the State University of New York at Brockport.