Results tagged “economy”

In today's episode, I interview Stephen Comstock, API's tax policy manager, about proposals from Congress and the administration that could raise taxes on the oil and natural gas industry. If enacted, these taxes would have a negative impact on the U.S. economy and the industry.

In related news today:

The study states that "as a result of the oil spill, the future costs of drilling and operating in the Gulf will rise considerably" due to the following factors: 

This year the nation is facing a similar situation. The United States is struggling to overcome the worst recession since The Great Depression, and economists say the sputtering recovery is not producing new jobs. Some 15 million Americans are out of work.

A year ago, API helped to organize rallies in more than 20 states and invited Americans to submit videos, many of which were shown on large screens during the rallies. Ron of New Bloomfield, Mo., provided his thoughts in this video:

American citizens have plenty to worry about. With 15 million workers in unemployment lines, family budgets under pressure, and higher taxes looming on the horizon, Americans from all walks of life are feeling insecure and wondering about their children's futures.

The Interior Department says it will require more extensive environmental reviews for deepwater projects, including limiting the use of "categorical exclusions" which eliminate the need to conduct an environmental analysis for every deepwater well. These exclusions make sense for wells being drilled in the same or similar formations where the environmental conditions and risks were identical, and for which extensive environmental analyses already have been conducted.

"I am officially announcing that API will host additional citizen rallies starting early next month in conjunction with other local and national groups.  We'll be taking the lead on the rallies, but we are partnering with local energy and business groups in every location.  We're kicking off the program with three rallies in Texas on September 1st, and we are now finalizing plans for rallies in Ohio, Illinois, Colorado and New Mexico.

How these costs are treated for tax purposes directly impacts the economics of a project.  Though a substantial portion of the costs are recovered over a long period of time, exploration and production companies do get a tax deduction for the labor associated with drilling to defray some of the upfront risk and economic cost.

Chief Economist Dr. Martin Regalia of the U.S. Chamber of Commerce said businesses are holding about $1.8 trillion in cash, which is $600 billion more than usual. The reason: Many businesses believe it's too risky to invest money when so much is unknown about the economic and political climate.

These regulators are from the Environmental Protection Agency (EPA), and their goal is to twist and turn the language in the Clean Air Act (CAA) to regulate greenhouse gas emissions (GHGs). It's estimated that six million stationary GHG sources, ranging from large industries to big-box stores, churches, athletic complexes, malls, office buildings and farms, would have to get permits to emit GHGs under the EPA's proposed regulations. And the states, charged with managing the permitting process, will be swamped. Many states say they don't have enough people, time or money to process the applications and issue permits.

"Failure to consider the full effect of proposed laws and moratoria, as well as the operation of existing laws, could jeopardize thousands of jobs and further damage the Gulf Coast economy."

Last week, Ensco Offshore Co. filed a 450-page brief in its suit against the moratorium, accusing the administration of imposing "onerous new requirements for both shallow water and deep-water drilling" that violate the government's own rulemaking process. Rather than sending "notices to lessees" containing new drilling requirements, Ensco asserts the government should have issued a formal notice of rulemaking and held a public comment period.

In today's episode, I interview George Clark, president of Manufacture Alabama, about the impact of the drilling moratorium on Alabama's economy and jobs.

At present, the relief well is one of only 11 rigs operating in Gulf waters deeper than 500 feet, under exemptions to the administration's the deepwater drilling moratorium. Each of these rigs is working in proven reserves, and none is actively searching for new oil and natural gas discoveries.

Sen. Max Baucus (D-Mont.), for example, wants to prohibit the five largest oil companies from using a standard tax deduction. The Senate Finance Committee, which Sen. Baucus chairs, says the deduction's goal--to encourage the production of more domestic energy--hasn't been met.

H. Sterling Burnett, writing in The Hill, says part of the problem was the sales pitch used to push for passage. "Though the Senate's energy bill had nothing to do with the safety of offshore oil rigs, the green lobby tried to link the two in the public's mind. Fortunately, neither the public nor, ultimately, many senators were buying it," he writes.

Senate leaders took the right step to shelve a flawed spill bill, and we look forward to working with lawmakers to improve the bill so that American taxpayers, domestic jobs, the economy and our economic security are protected.

The bill proposed by the Democratic leadership is not an effective or reasoned response to the spill. Instead it will cost American jobs, threaten our fragile economic recovery and jeopardize our energy security.

We've told you about the moratorium and the toll it's taking on the U.S. economy. When combined with congressional legislation, it could result in the loss of 175,000 jobs per year and a 27 percent decline in U.S. oil production.

But have you seen the faces of the people who are most affected?

Gasoline demand fell for the first six months of 2010, API reported today. According to the Monthly Statistical Report, U.S. gasoline deliveries (a key indicator of demand) averaged 8.88 million barrels per day, 0.6 percent lower than in the same period in 2009.