The People of America's Oil and Natural Gas Indusry

Energy Tomorrow Blog

analysis  pennsylvania-severance-tax  oil-and-natural-gas-development  shale-energy  tax-revenues  economic-impacts  production 

Mark Green

Mark Green
Posted May 7, 2015

The oil and natural gas industry’s recent tax revenue and economic contributions to the Commonwealth of Pennsylvania look like this: more than $630 million through the state’s existing local impact fee since 2012, including $224 million in 2014 alone; more than $2.1 billion in state and local taxes; annual contributions to the state economy of $34.7 billion, boosting the bottom lines of more than 1,300 businesses in the energy supply chain.

Gov. Tom Wolf, who has proposed new industry taxes, says the state is “getting a bad deal.” We suspect a lot of states would like to have things so rough.

Nevertheless, the governor is pushing for an additional natural gas severance tax of 5 percent on the gross market value of production, plus a fixed fee of 4.7 cents per thousand cubic feet (Mcf) produced. The governor also wants an artificial floor of $2.97 per Mcf regardless of the actual price of natural gas. All suggest unfamiliarity with the story of the goose that laid golden eggs.

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natural-gas-development  methane  emission-reductions  epa34  greenhouse-gas-emissions  hydraulic-fracturing  fracking  production  regulation 

Mark Green

Mark Green
Posted April 16, 2015

For months we’ve argued that new federal regulation targeting methane emissions from energy development is unnecessary and could undermine the success industry initiatives already are achieving. Howard Feldman, API’s senior director of regulatory and scientific affairs, from earlier this year:

“Methane is the product we bring to market. We sell methane – that is natural gas. That’s what we want to sell. … We don’t need regulation to tell us to do that because we are incentivized to do that. It’s not a byproduct or something. It is the product we’re selling. … We’re developing these technologies because we want to more and more capture natural gas.”

This is exactly what’s happening, as new data from EPA shows.

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domestic-oil  exports  crude-markets  economic-benefits  production  refineries 

Mark Green

Mark Green
Posted March 27, 2015

Add the heft of Rice University’s respected Center for Energy Studies to the weight of scholarly analysis urging an end to America’s four-decades-old ban on domestic crude oil exports. In a new study, the center lays out a case for U.S. crude oil exports that builds on the findings of IHS, ICF, Brookings, the Aspen Institute/MAPI and others – saying that lifting the ban would result in significant economic and foreign policy benefits to the U.S. 

The study explains that the export ban already is presenting a “binding constraint” on the domestic market, leading to “discounted” pricing for lighter crudes produced by America’s energy revolution. It also notes that large volumes of lighter domestic crudes, in excess of what the U.S. refining sector can use, with no access to other markets, are discounted compared to global crude prices.

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energy-exports  crude-oil  natural-gas-supplies  lng-exports  economic-benefits  production 

Mark Green

Mark Green
Posted October 6, 2014

We’ve posted a number of times on the merits of U.S. energy exports, because whether the subject is exporting crude oil or natural gas, there are compelling economic and energy reasons to lift restrictions on America’s ability to be a major player in global markets. While those restrictions remain, America and Americans lose.

A number of studies have said that energy exports will benefit our economy and stimulate more domestic production – here, here and here on liquefied natural gas (LNG) and here and here on crude oil. A new report from Columbia University’s Center for Global Energy Policy added that LNG exports could help strengthen the United States’ foreign policy hand.

Thanks to abundant oil and natural gas reserves, advanced hydraulic fracturing and horizontal drilling and investments by a robust industry sector, the U.S. is the world’s No. 1 producer of natural gas and is about to become No. 1 in oil output (subscription required). Yet, because of self-imposed and outdated (in the case of the crude oil) export restrictions, the U.S. isn’t harnessing its energy potential as it could and should.

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lng-exports  liquefied-natural-gas  economic-benefits  production 

Mark Green

Mark Green
Posted October 1, 2014

Earlier this month Oilprice.com’s Nick Cunningham wrote this piece explaining that the debate over exporting U.S. liquefied natural gas (LNG) has been won – citing the openness of the Obama administration and leading Democrats to exports. Cunningham writes:

In fact the Obama administration and Congressional Democrats have received little blowback for the LNG projects that have received approval. And with tacit or overt support from Democrats, the LNG issue has largely been won by export supporters.

Still, some export opponents try to gain traction despite the findings of a number of studies (NERA, ICF, Brookings) that project broad economic benefits to the United States from LNG exports, with minimal effect on domestic prices. Earlier this year NERA updated its 2012 study:

LNG exports provide net economic benefits in all the scenarios investigated, and the greater the level of exports, the greater the benefits. The market for LNG exports is self-limiting, in that little or no natural gas will be exported if the price of natural gas in the US increases much above current expectations. High levels of exports can be expected only if natural gas is plentiful and inexpensive enough to produce so that prices remain below current levels, even with high levels of exports. (Emphasis added)

The issue of domestic prices is important because export opponents have been using an apples-to-oranges argument trying to scare up unfounded concern about the domestic effects of exports, citing conditions in Australia’s natural gas market.

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chevron  deepwater  exploration  gulf-of-mexico  oil-and-natural-gas  production  workforce 

Mark Green

Mark Green
Posted June 18, 2014

Here’s a link to a well-done video produced by Fortune magazine, showing a little bit about what it’s like to work on an oil and natural gas production platform more than 100 miles out in the Gulf of Mexico. The video’s producers visited Chevron’s Tahiti platform and interviewed a couple of the facility’s workers to gain insight into the two-weeks-on, two-weeks-off nature of life on the platform.

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offshore-platforms  oil-and-natural-gas-development  gulf-of-mexico  production 

Mark Green

Mark Green
Posted June 11, 2014

Last summer we published this post on the construction of Anadarko Petroleum’s Lucius spar that would support the company’s newest Gulf of Mexico production platform. A few months later we added this one, featuring three video clips of the spar being towed to sea and positioned in the Gulf, about 275 miles southeast of Galveston, Texas.

Now check out the new video below, showing Lucius’ 10,000-ton topsides – the production decks, living quarters and other features – being installed recently on the truss spar as it floats in approximately 5,300 feet of water.

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crude-oil  energy-exports  economic-benefits  production  global-markets 

Mark Green

Mark Green
Posted May 29, 2014

Individual states would see significant job creation and economic growth from exporting U.S. crude oil, according to anew state-by-state report by ICF International and EnSys Energy. Specifically, 18 states could realize more than 5,000 new jobs each in 2020 from crude oil exports, with state economies growing by hundreds of millions of dollars each.

Kyle Isakower, API vice president for regulatory and economic policy, talked about the study during a conference call with reporters:

“There is a growing realization that this is a new era for American energy. Scarcity is giving way to abundance, and restrictions on exports only limit our potential as a global energy superpower. Additional exports could prompt higher production, generate savings for consumers, and bring more jobs to America. The economic benefits are well-established, and policymakers are right to reexamine 1970s-era trade restrictions that no longer make sense.”

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access  taxes-and-revenue  production  job-creation 

Mark Green

Mark Green
Posted October 29, 2013

Here’s what Americans are thinking about tax reform discussions that potentially could include hiking taxes on U.S. oil and natural gas companies, according to a new Harris Interactive poll

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