In a recent op-ed in the Argus Leader, John Duff Erickson, professor emeritus at the South Dakota School of Mines and Technology, makes a strong case for continuing the development of Canadian oil sands. He notes that Canada is the largest supplier of oil to the United States, and Canadian oil is helping to bolster U.S. energy security.

The headline on the USA Today Web site reads, "ExxonMobil 2Q profit falls a surprising 66%." But in actuality, oil company second quarter earnings reports shouldn't be a surprise to anyone.

The oil and natural gas business is cyclical, meaning that it has its ups and downs, and some years are better than others. It's also important to note that oil and natural gas companies are "price-takers" not "price-makers," because the price of oil and natural gas is determined by the marketplace. Remember Economics 101? Prices are determined by the law of supply and demand.

In a move that relieves some of the legal worries about offshore oil and natural gas development, the U.S. Court of Appeals for the District of Columbia has ruled that the 2007-2012 offshore leasing plan can move forward uninterrupted.

In a recent Houston Chronicle op-ed, Richard Burleson, managing partner of Houston-based and energy-focused law firm Burleson Cooke L.L.P., cautions the administration and Congress against over-regulating hydraulic fracturing. As we've explained in this blog, hydraulic fracturing is a process where fluid is pumped under pressure down through the wellbore to make tiny fissures in the rock, allowing natural gas and oil to flow more easily up through the well.

Pennsylvanians are sitting on a buried treasure. It's called the Marcellus Shale formation, and a new study quantifies its potential impact on the state's economy and jobs. According to the study, the state's economy will receive an infusion of $14.17 billion in 2010 due to Marcellus Shale natural gas development, creating more than 98,000 jobs and generating $800 million in state and local tax revenue.

In a recent post on the Heritage Foundation's blog The Foundry, David Kreutzer, senior policy analyst in energy economics and climate change, talks about the effects of cap and trade on diesel prices that will impact truckers, farmers and consumers in the United States.

Put yourself in this situation. You decide to build your Dream Home. You buy the perfect lot, hire a general contractor and receive your first shipment of lumber. Then, just as the cement truck is preparing to pour the foundation, you learn that there's been a legal glitch--you might not own the lot after all. What would you do? You've already spent a sizable amount of money, and you don't know whether you'll ever be able to build your house.

California wisely has decided to use a portion of its abundant natural resources to pay for services to its citizens. An estimated $1.8 billion in state royalty payments are expected over the life of developing these resources, and the funds will help defray the state's budget shortfall as well as increase our nation's energy security.

Individuals who oppose U.S. oil and natural gas development often cite the following sentence: "The United States represents 5 percent of the world's population but uses 25 percent of the world's energy."

Ouch. That sentence makes all of us appear to be wasteful, slothful, and uncaring about the environment. But like a lot of other statements created to appeal to our sensitivities, it exaggerates the truth and leaves out some very important facts.

Ethanol, which in the United States is generally made from corn, has been an important part of the gasoline supply for several years. In many regions of the country and in certain seasons, it accounts for as much as 10 percent of the gasoline fuel supply.

Here's an interesting factoid for you: America's reliance on imported oil has been falling. According to API's Monthly Statistical Report for June, imports fell 7.6 percent during the first half of 2009 as compared with the same period a year earlier. This drop was on top of two consecutive annual declines in crude oil and oil product imports in 2007 and 2008.

Last Friday, the Richmond, Virginia, area was the scene of two rallies against the Waxman-Markey cap-and-trade bill and the administration's health care plan. One occurred in front of Sen. Mark Warner's office in Chesterfield County; the other was held in downtown Richmond on East Franklin Street where Sen. Jim Webb's office is located. Virginia Petroleum Council Executive Director Mike Ward shot video of the downtown demonstration and reported that approximately 200 people held signs and marched on both sides of the street between noon and 1:00 p.m.

In an op-ed from yesterday's Pittsburgh Post-Gazette, Robert W. Watson, emeritus associate professor at Penn State University, talks about the importance of increased energy development--specifically the shale gas that rests in the Marcellus Shale formation.

As we've noted several times on this blog, the costs and job losses that could be caused by the House-passed climate bill are quite large--almost too large to fully comprehend. Therefore, API has produced a series of brief papers that break down the bill's impact on a state-by-state basis. 

The House-passed climate bill is one of the most complicated and costly bills ever considered by Congress. At more than 1,400 pages, it's even longer than War and Peace. Yet, there's a portion of the U.S. economy that is being short-changed by the measure--transportation, one of the most vital sectors of the economy and the American way of life. Our transportation system of roads, trains, buses, cars, trucks and airplanes makes it possible to get to work, to school, to church, vacation, and perhaps most importantly, to attend the most important milestones in our family's lives--births, graduations, and weddings.

If you're looking for an indicator that describes the current economy, look no further than API's oil demand and supply statistics. API reported today that U.S. petroleum deliveries--a key measure of demand--in the first six months of 2009 fell to its lowest level for the time period in more than a decade.

Jimmie James has experienced life without the modern conveniences supplied by electricity. Growing up in small town in Texas, he says he and his family used wood for heat and kerosene in their lamps. "It's not something I saw on the History Channel," he says. "It was something I lived." Today he's grateful that his life, as well as the U.S. standard of living, is vastly improved due to oil and natural gas and their contributions to society. And he doesn't want to return to the past through a well-intended but ill-conceived energy policy.

"This issue affects every person on the planet," Jimmie says, adding that it is "important that all of us participate."

More evidence has surfaced indicating that the U.S. House of Representatives cap-and-trade legislation could do more harm than good.

On July 8, U.S. Government Accountability Office (GAO) released a report warning that the bill could lead to an international trade war. The study points out that the bill's provisions designed to protect particularly energy-intensive industries from overseas competition could "motivate retaliatory actions, undermine efforts to secure multilateral consensus, and...could lead [other countries] to implement restrictions against U.S. exports."

By today's estimates, there are about two trillion barrels of recoverable conventional oil resources worldwide, and as much as twice that in additional frontier resources like extra-heavy oil, oil sands, and oil shale and shale gas. The U.S. Department of Energy (DOE) conservatively estimates oil shale formations in Colorado, Utah and Wyoming contain 800 billion barrels of recoverable oil--more than three times the proven reserves of Saudi Arabia. 

There's a lot of energy-related news today. I thought I would share some of the headlines with you.

Recently, oil prices have traded in the $60 a barrel range. The global price of oil has fallen sharply over the past seven trading days after reaching $73 a barrel last week. Gasoline prices have tracked oil prices for decades. Read more about gasoline and crude oil prices.

API's weekly statistical report about oil demand and supply showed that while gasoline demand rose slightly just before the July 4^th holiday as Americans prepared for holiday travel, inventories of gasoline and diesel have remained at very high levels. According to external analysts, the unusually large inventories signal that the recession still has a firm grip on the economy.

During the recent debate over the House's version of the cap-and-trade bill, both the proponents and the opponents pointed to the bill's potential impact on jobs. On the floor of the House, Speaker Nancy Pelosi implied that the bill would create millions of new "green" jobs, while the bill's opponents, including API, cited studies showing the Waxman-Markey bill would be a job killer.

Now we're seeing the first real evidence of the bill's likely impact on employment. As the Associated Press reported yesterday, the owner of a small refinery in El Dorado, Ark., believes the bill will put him out of business and force him to layoff his 600 full-time employees and another 600 contract workers who are doing construction at the plant.

This week, the Senate began discussions on the American Clean Energy and Security Act of 2009, climate legislation that narrowly passed in the House last month. As a recent New York Times article mentions, this week and the remainder of the month will be a busy time on the Hill with a number of hearings taking place before the weeks of July 27-31 and Aug. 3-7--weeks Sen. Barbara Boxer (D-CA) set aside for the bill's mark up. To follow the discussion, you can watch yesterday's Environment & Public Works Committee hearing.

When oil companies do well, who benefits? Is it solely the companies' management? Or do average investors benefit as well? Consider this question:

What percent of U.S. oil companies' stocks are owned by corporate management?

The oil and natural gas industry makes many important contributions to the U.S. economy, but specifically:

How much do oil companies pay in income taxes as a share of their income?