Energy Today - February 1, 2011
Rayola Dougher
Posted February 1, 2011
Politico: Energy industry braces for cuts: Hoping their industries will be spared, energy lobbyists are pushing back with warnings that too much tinkering with the status quo will force them to lay off workers and halt projects that are helping get the economy back on its feet. Jack Gerard, president of the American Petroleum Institute, said he was upset with how Obama brought up the oil and gas industry's tax breaks in the State of the Union, especially considering how the idea twice went nowhere in a Democratic-controlled Congress. "The comment, the smirk -- all unnecessary," Gerard said in an interview. "We'll just assume somebody in the speechwriter's department wasn't keyed in to energy and economic reality, and we'll move on from here." While they do record large profits, Gerard countered that oil and gas companies also are big taxpayers at $95 million a day. "The federal government doesn't by any stretch of the imagination support this industry," he said. "This industry supports the federal government." The New York Times: Obama's Bid to End Oil Subsidies Revives Debate: When he releases his new budget in two weeks, President Obama will propose doing away with roughly $4 billion a year in subsidies and tax breaks for oil companies, in his third effort to eliminate federal support for an industry that remains hugely profitable. Previous efforts have run up against bipartisan opposition in Congress and heavy lobbying from producers of oil, natural gas and coal. The head of the oil and gas lobby in Washington contends that the president has it backward -- that the industry subsidizes the government, through billions of dollars in taxes and royalties, not the other way around. But even as the president says he wants to do away with incentives for fossil fuels, his policies continue to provide for substantial aid to oil and gas companies as well as billions of dollars in subsidies for coal, nuclear and other energy sources with large and long-lasting environmental impacts.
Houston Chronicle: Energy stocks push Wall Street higher: Energy stocks led indexes higher Monday, the first day of trading since the growing unrest in Egypt caused the largest one-day drop in the broad stock market in more than three months...Nine of the 10 company groups that make up the S&P index rose. Energy companies gained 2.6 percent, the most of any group...Stronger economic data in the U.S. also helped push stocks higher. The Commerce Department reported that consumers increased their spending in December by more than analysts had predicted. Spending for all of 2010 rose by the largest amount in three years.
Hot Air: Fabulous: We'll Just Put More Ethanol in your Gas Anyway: It's been a very busy couple of weeks news-wise, and you don't need a list of breaking stories to remind you of all that's been going on. But somewhere in this hectic season I managed to miss a long awaited decision by Obama's EPA which showed up with the previous Friday's news dump. WASHINGTON -- Nearly two-thirds of cars on the road could have more corn-based ethanol in their fuel tanks under an Environmental Protection Agency decision Friday. The agency said that 15 percent ethanol blended with gasoline is safe for cars and light-duty trucks manufactured between 2001 and 2006, expanding an October decision that the higher blend is safe for cars built since 2007.The maximum gasoline blend has been 10 percent ethanol. This decision was made despite repeated warnings from industry experts who have been pleading for more time to perform exhaustive testing. Were they being overly cautious? That's a difficult argument to make, particularly since we told you last month that one delay in testing came from the fact that the higher ethanol blend fuel was melting down the seals in pumps and storage tanks during testing. The laundry list of potential problems from this decision is extensive. Asking distributors to carry yet another fuel (even if it doesn't melt their pumps) will require logistical juggling, equipment changes, new signs and other expenses which are inevitably passed on down to the consumer. Ethanol burns hotter than conventional fuel, leading to earlier failure of catalytic converters. (An expensive fix, as any of you who have been hit with it at the garage will attest.)
Additional Resources:
The Hill: Oil industry cites White House reg reform in bid for disclosure rule leeway
Oil & Gas Journal: API: US demand grows, but policies may stymie production
Plains Daily: ND oil industry pressing for tax cuts