Energy Tomorrow Blog
Posted December 17, 2013
Last month we made some points on a Senate proposal that would impact America’s oil and natural gas industry with higher taxes and costs. Research has shown that delaying industry’s ability to write off intangible drilling costs likely would mean fewer wells drilled, lost jobs and lower energy production. Doing away with the “last-in, last-out” (LIFO) accounting method used by a number of energy companies would require them to redirect cash or sell assets to cover tax payments.
Now API has been joined by more than a dozen other organizations – representing energy producers, refiners, supporting servicers, equipment manufacturers, marketers and retailers – in challenging proposals that could hinder an industry that already sends $85 million a day to the U.S. Treasury.
In a letter to members of Congress the groups say that while efforts to make the tax code less complicated and more competitive are good, raising energy taxes and increasing costs will work against greater industry investment and activity that would provide broad benefit to the U.S. economy.
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
Posted October 17, 2013
With the ongoing budget debate in Washington serving as backdrop, let’s review ways America’s oil and natural gas industry generates revenue for our government – and the smart path to increasing that contribution in coming years.
First, our industry currently supplies $85 million a day in revenue to the U.S. Treasury via income taxes, royalties, rents and other fees. Second, industry is paying its fair share and more with an effective tax rate of 44.6 percent averaged over 2007-2012 – compared to 37.7 percent for retail, 25.6 percent for computer and peripherals and 21.3 percent for pharmaceuticals. And it could deliver more through increased domestic production made possible by greater access to U.S. reserves.
Posted October 8, 2013
Texas Continues to Lead the Shale Oil and Natural Gas Revolution
Forbes: Almost lost in all the news about the federal government “shutdown” (which has somehow left 83% of the government funded and functioning) over the last week are several new reports regarding the ongoing massive oil and natural gas Shale Revolution in the United States, and the role Texas is playing in making it happen…
When one includes condensate production from natural gas wells, Texas produced over 2.6 million BOPD in July, fully 35% of the nation’s petroleum production. Just a little more than 2 years ago, in April 2011, Texas’s daily oil production was 1.3 million BOPD, accounting for just 20% of total US production. That’s a phenomenal increase in only two years. The state’s current production level would rank it 13th among all countries on earth, and the rate of increase will almost certainly move the state into the top ten within the next 12 months.
Read more: http://onforb.es/18N2qWO
Posted September 18, 2013
Check out the video below of a Fox Business Network interview with API President and CEO Jack Gerard on the tax reform climate in Washington that has some talking about raising taxes on energy companies. The ability to recover the costs associated with finding oil and natural gas in a timely way through the Intangible Drilling Costs provision is especially critical to continuing investments in energy development, Gerard says.
Posted September 10, 2013
Fracking, the Poor and Adding to Americans’ Disposable Income
Wall Street Journal (editorial): Last week we reported on a study showing that the U.S. oil and natural gas revolution may be the country's best antipoverty program, and the evidence keeps coming. A new report from IHS Global Insight estimates that fracking added the equivalent of a cool $1,200 to real household disposable income on average in 2012.
Lower costs for raw materials were passed on to consumers via lower home heating and electricity bills and lower prices for other goods and services. Wages also increased from a surge in industrial activity. On present trend, IHS predicts that unconventional oil and gas will contribute more than $2,000 a year by 2015 and $3,500 by 2025.
Overall the industry lifted economic growth by $283 billion last year.
Read more (subscription publication): http://on.wsj.com/13GJtDS
Posted August 30, 2013
Benefits of Fracking Will Be Tested in Syria Attacks
Forbes: Oil prices are surging on concerns that a U.S.-led attack on Syria could disrupt global oil supplies. West Texas Intermediate crude traded at $110.45 a barrel on the New York Mercantile Exchange this morning, after rising more than $3 a barrel on Tuesday. Less than two months ago, oil sold for less than $100.Gasoline prices have risen the most in six weeks at a time when forecasts had indicated they would be falling because of seasonal decline in demand.
It’s a pretty typical market response to geopolitical unrest in the Middle East. The concern, of course, is that any escalation of the Syrian conflict will expand to include other oil-producing nations, particularly Iran. Iran has the power to control the all-important Strait of Hormuz, through which about 17 million barrels of oil pass each day — roughly one fifth of the world supply.
But this time things are different, at least from the U.S. perspective. The implications of a supply disruption are muted because domestic production is at a 20-year high, driven by the hydraulic fracturing boom. U.S. inventories are flush.
Read more: http://onforb.es/15jNSjt
Posted August 28, 2013
Posted August 23, 2013
Posted August 15, 2013
North Dakota blogger Rob Port comments on concerns voiced by the state’s mineral resources director: “It’s always been a hard sell to the public at large that North Dakota’s oil boom – the goose laying the golden eggs – isn’t a given. To ensure the boom is something more than a boom-and-bust, the state should be looking at simplifying the tax code.”
The Hill’s Energy & Environment Blog – EPA’s McCarthy: Responsible Natural Gas Production Key to Climate Strategy
EPA Administrator Gina McCarthy, speaking in Colorado: “Responsible development of natural gas is an important part of our work to curb climate change and support a robust clean energy market at home.”