Posted July 19, 2013
Some important fact-telling about the president's proposals to raise energy taxes and why there's a better way to raise revenue for government while also increasing domestic oil and natural gas production.
Posted July 18, 2013
The history of modern crude oil prices includes a number of instances where historical events have accompanied dramatic price shifts. Simply: Events that impact or could impact supply affect the global crude oil market. And, because the cost of crude is the main driver of gasoline prices – currently about 66 percent
Posted July 11, 2013
From time to time, a few politicians get the not-so-bright idea to try to repeal the tax deduction for intangible drilling cost (IDCs). A new study out today from Wood Mackenzie shows what would happen if this cost recovery measure was repealed effective January 1, 2014.
During a conference call with reporters, API’s director of tax and accounting policy Stephen Comstock noted that IDC expenses including wages, fuel, and hauling costs typically represent 70 to 90 percent of the cost of a completed well. Comstock:
Posted July 2, 2013
A post on The Hill’s Congress Blog by the Information Technology and Innovation Foundation’s Matthew Stepp and Megan Nicholson caught our eye:
“… we suggest Washington policymakers raise at least $1 billion per year in new revenue from increased fees on oil and gas drilling, to be invested in breakthrough clean energy research at the Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E).”
Now, we’re used to folks wanting to increase taxes and other fees from oil and natural gas to pay for their pet projects. But instead of “increased fees” maybe Washington policymakers should just let us do our jobs. The authors note:
“According to the Department of the Interior, oil and gas drilling revenue from federal lands increased 56 percent since 2000, averaging $11 billion per year.”
Posted June 18, 2013
Great question during the U.S. Energy Information Administration’s annual energy conference this week – paraphrasing: Given the technologies, the innovation and risk-taking that mark today’s oil and natural gas industry, what‘s the ceiling for oil and gas development over the next few decades? The U.S. Geological Survey’s Donald Gautier took a crack at it:
“Every time I look at world oil or gas resources, I start adding things up, and I end up with enormous numbers. It just seems like an unavoidable fact, and the issue is about human activities and the contraptions they’re using for getting this out. There is certainly no shortage of molecules out there.”
Posted June 10, 2013
House legislation requiring a new federal offshore leasing plan that includes areas off South Carolina and Virginia is the best way to create new access to federal oil and natural gas resources sooner rather than later. Later – much later – is likely under the current federal plan, which would keep lease sales from happening until 2017 at the earliest. Because of the time it takes to develop offshore resources, that means actual production wouldn’t occur until 2024 or even 2027.
Creating access to areas that currently are off-limits is critical to U. S. energy security, job creation and economic growth. Access leads to exploration, which results in the oil and natural gas development that’s vital to President Obama’s pledge to increase domestic production under his all-of-the-above energy strategy.
Posted June 5, 2013
Ernst & Young has a new study detailing $185.6 billion in total capital spending by oil and natural gas companies last year – the largest in the history of the firm’s oil and natural gas reserves study. Marcela Donadio of Ernst & Young:
The study of U.S. upstream (pre-refinery stage) capital spending by the 50 largest companies (based on 2012 end-of-year oil and natural gas reserve estimates) found a 20 percent increase compared to 2011. Ernst & Young said the increase was largely due to increased tight oil and liquids activity. That refers to development in tight-rock formations, made possible by hydraulic fracturing and horizontal drilling.
“The increased exploration and development spend we’re seeing in this year’s study speaks to the incredible opportunity unfolding in tight oil from shale formations and the high cost of developing these unconventional resources.”
Posted May 31, 2013
The U.S. Energy Information Administration has a new report that details the decline in sales of oil and natural gas from production on federal lands (2003-2012). Key points:
- Sales of crude oil from federal lands, onshore and offshore, decreased 5 percent in fiscal year 2012 (ended Sept. 30) to 596 million barrels from 629 million barrels in FY 2011. That includes an 8-percent decrease in offshore volumes, partially offset by an 8-percent increase in much smaller onshore volumes.
- Natural gas sales from federal lands decreased 7 percent in FY 2012 to 4,262 billion cubic feet (bcf) from 4,584 bcf in FY 2011. Offshore volumes were down 19 percent, while onshore was virtually unchanged.
- Sales of all fossil fuels produced on federal lands (also including coal and natural gas plant liquids) fell by 4 percent in FY 2012.
Posted May 23, 2013
Gasoline prices have been rising with the approach of the summer driving season – up to about $3.66, according to AAA – pushed there by rising crude oil prices. U.S. consumers need help. And they could get it – if the administration pursued a number of energy policies to put downward pressure on global crude costs, while abandoning other choices that could harm consumers.
API Chief Economist John Felmy’s reporter briefing Thursday focused attention on two paths: one that will increase domestic production of oil and natural gas and one that won’t. Unfortunately, the administration – via proposals to increase energy taxes and a new wave of questionable regulation – looks headed down the wrong path, a recipe for disaster for American energy:
Posted May 23, 2013