Energy Today - February 16, 2011
Rayola Dougher
Posted February 16, 2011
Bloomberg: Acting gov to propose W.Va. Marcellus task force: West Virginia would harness the ongoing boom in Marcellus shale natural gas drilling to bolster its ailing chemical and manufacturing industries, under an administration plan unveiled Tuesday. Acting Gov. Earl Ray Tomblin has drafted an executive order creating a Marcellus to Manufacturing Task Force. The Associated Press obtained a copy of the draft in advance of a Tuesday afternoon state Capitol press conference that Tomblin has scheduled on the subject. The plan aims to attract employers that convert ethane, a compound removed from natural gas during the refining process, into ethylene, a chemical compound widely used by industry. The task force would help assess the costs of thermal or steam cracking, the process for converting these chemicals. It would also gauge the state's existing infrastructure -- pipelines, storage tanks, suitable plant facilities -- for developing this industry. The Houston Chronicle: Hearing focuses on environmental aspects of drilling: A public hearing Tuesday on environmental considerations for drilling in the western and central Gulf of Mexico turned into a forum to debate domestic exploration policy. Andy Radford, senior policy adviser for the American Petroleum Institute, told a federal panel meeting in Houston that oil and natural gas producers are "extremely disappointed" with the administration's refusal to include the eastern Gulf and southern and mid-Atlantic regions in upcoming environmental-impact studies. Without such studies, the government cannot put tracts in those restricted waters out for bid during the next five-year lease period, which begins in 2012. Those areas have been off limits for years, even as exploration and production boomed in the central and western Gulf. President Barack Obama said early last year that the administration would at least consider opening the areas up for exploration, but the Gulf of Mexico oil spill that started in April forced re-evaluation of all offshore drilling plans. In December, Interior Secretary Ken Salazar announced that expansion of drilling would be on hold as regulators continue to strengthen safety requirements. Radford and others urged the government at least to conduct the environmental impact studies, which would not commit it to offering leases in new areas. They warned that delay carries risk and said U.S. energy demand will continue to grow, with or without more domestic offshore production.
Fuel Fix: White House proposes new oil and gas taxes: The White House is hoping the third time is the charm as it again asks Congress to raise tens of billions of dollars for federal coffers by slashing a raft of tax incentives long enjoyed by oil and gas companies. But just as in the past two years, President Barack Obama's appeal is almost certainly dead on arrival on Capitol Hill. Obama is taking aim at the oil and gas tax incentives in his budget proposal for the 2012 fiscal year that begins Oct. 1. According to the administration, doing away with eight "oil and gas preferences" would generate $3.5 billion in fiscal 2012 and $43.6 billion over the next decade. Other proposed changes to the way companies can get credit for foreign taxes, the planned reinstatement of Superfund taxes to pay for cleaning up contaminated industrial sites and possible new fees for oil and gas drilling could cost another $2 billion in fiscal 2012. Oil and gas industry leaders today said the administration's plan is shortsighted, because any immediate gains in tax revenue would be offset by longer-term losses, as the changes make more wells uneconomic to produce and discourage exploration. "The increases, over the long term, would actually lower revenue to the government by many billions of dollars as a result of foregone revenues from projects the tax hikes would prevent going forward," said American Petroleum Institute President Jack Gerard.
Additional Resources:
Bloomberg: TransCanada Sees Decision on Keystone by Late 2011