Editorial: A Jobs Plan that Really Works

- Editorial: A Jobs Plan that Really Works

Friday, September 09, 2011
Louisiana Oil & Gas Association

Last night, President Obama addressed a joint session of Congress to discuss his plan to generate jobs, instill some sense of confidence in the market, and give a greatly needed jolt to the U.S. economy. What was meant to be the "speech of all speeches" turned out to be politically charged campaign rhetoric designed to place the deteriorating economic situation on a do-nothing Congress.

For the first time, the President acknowledged the fact that our nation's economy has stalled. And in an effort to get it going again, President Obama will propose his "American Jobs Act" as the solution to our stagnant economy.

From what was relayed in his speech, the "American Jobs Act" calls for approximately $450 billion to be spent over the next year on a number of initiatives that include infrastructure projects, tax credits for employee raises, an extension of jobless insurance, and money for the hiring of teachers nationwide.

First, let's discuss the positives. To the President's credit, he showed a willingness to work side by side with American businesses and acknowledged that there are many over-burdensome regulations that hinder business growth. His jobs plan calls for tax credits for business owners that hire unemployed workers and a 50% payroll tax cut for small businesses. These are certainly positive solutions that will support our business community and stimulate the economy.

Now, let's talk about the bad news. What was missing from the speech was an explanation as to how he will find the money to pay for these initiatives. How do we generate nearly one-and-a-half trillion dollars at the same time the Congressional "Super Committee" searches for over $1.5 trillion in cuts? Have we forgotten that our nation is bankrupt? Have we also forgotten that nearly 42% of Americans aren’t paying any taxes?

Let's take a look at some numbers. Currently, there are 14 million Americans that are unemployed. Approximately, 7.17 million of those potential workers are collecting unemployment insurance. Nearly 2.4 million jobs have been lost since President Obama took the oval office. The jobless rate in the U.S. has hovered around 9.0% or higher for 26 of the past 28 months. A good sign of how bad things are is the fact that long-term unemployment is at its highest levels since the Great Depression of the 1930s.
So, for the sake of the argument, let's assume that President Obama’s re-election depends on gaining back those jobs that have been lost. Let’s also assume that raising taxes in an economic depression is political suicide. With that said, what if an industry could offer cutting those unemployment numbers in half?

Releasing the stranglehold on America's oil and gas industry can generate those jobs and ensure sound economic growth without one tax increase.

In its recent study, the American Petroleum Institute found that U.S. policies which encourage the development and exploration of natural resources could, by 2030, increase domestic oil and natural gas production by over 10 million boed, generate 1.4 million jobs, and raise over $800 billion in government revenue.

In his speech, President Obama called for more products sold around the world stamped with the slogan, "Made in America." While our manufacturing sector has a long way to go, let's start simple by ensuring that the energy we consume here at home has the stamp, "Produced in America."

West Wing Week: 9/9/11 or "American Jobs Act"


Oil & Gas Post

Promote Your Page Too
LINK

EDITORIAL: World's Watching

- EDITORIAL: World's Watching

Thursday, August 04, 2011
Houston Chronicle

The excitement across Texas about possibilities for new natural gas and oil plays is palpable, particularly across South Texas, site of the rich Eagle Ford Shale formation.

Like most Texans, we're supporters of responsible, environmentally sensitive development of these resources that can help bring well-paying jobs to Texas, greatly increased revenues to the state and greater energy and economic security to the country as well.

For those and other reasons we're pleased to see the Texas Railroad Commission take a pro-active position in overseeing safe and responsible development of the area's resources.

Commissioner David Porter has created an Eagle Ford Task Force to head off the kind of public backlash that has troubled the Barnett Shale area in North Texas.

Porter is on target with his diagnosis of what went wrong in North Texas: too little information about the development process, which has been near populated areas, and a perception that the energy companies doing the work were calling the shots while the Railroad Commission was largely AWOL or doing the minimum to direct the process to ensure that public and environmental interests were protected.

To his credit, Porter is trying to avoid a repeat of that situation in South Texas and the public backlash that could hinder development of the region's immense resources. He has assembled a group of 22 stakeholders that includes representatives of drilling, pipeline and trucking companies, green energy experts and environmentalists, county and economic development officials, landowners and those who represent landowners, according a report by Vicki Vaughan of the San Antonio Express-News that ran in last Thursday's Chronicle ("Eagle Ford advisers ready to tackle goals," Page D3, July 28).

The significance of this work was probably best summed up by an Eagle Ford landowner and member of the Sierra Club: "We're on a world stage," said Teresa Carrillo. While noting the "fantastic" economic opportunity presented by the drilling, Carrillo also focused on the challenge to do it right.

Others have emphasized the opportunity that Eagle Ford offers the industry to "do it right and establish best practices" that can be used in other areas going forward.

This attitude is imperative, we would argue, and appears to be gaining traction across the industry, judging by the remarks of visitors from the industry meeting with the Chronicle's editorial board recently.

We detect a consensus that when it comes to caring for the environment, the entire industry must be cleaner than clean -- more rigorous than the regulators.

We hope that mind-set prevails and believe the Railroad Commission is setting the proper tone in its approach toward development in the Eagle Ford Shale area.

Copyright (c) 2011, Houston Chronicle

Oil & Gas Post

Promote Your Page Too
LINK

EDITORIAL: No, Drillers Already Paying Their Way

- EDITORIAL: No, Drillers Already Paying Their Way

Tuesday, August 02, 2011
The Philadelphia Inquirer
by Matthew J. Brouillette

Despite a deep recession, Marcellus Shale gas drilling in Pennsylvania has created tens of thousands of jobs, rescued many landowners from foreclosure and bankruptcy, and generated fortunes for farmers, laborers, and businesses. Nevertheless, some have stoked fears of environmental disaster and spread the myth that drillers aren't paying their share of taxes. Such attacks have led many to the mistaken conclusion that the industry should pay a special tax or what's euphemistically called an "impact fee."

While a tax on natural gas would not drive the industry out of the state, it would be passed on to residents -- folks like Jim VanBlarcom, a Bradford County dairy farmer who testified that leasing a small portion of his land for drilling enabled him to double his herd. He's not alone: Pennsylvania's gas industry is estimated to have produced more than $7 billion in lease and royalty payments since 2006. Moreover, it's given rural areas thousands of new jobs paying an average annual salary of nearly $70,000.

The influx of new employees means local governments have seen more revenue from the emergency and municipal services tax, which is withheld from workers' paychecks. Other revenue streams have grown, too. Bradford County has received about $1 million from the drilling industry in recording and copying fees alone. And drillers have paid $1.1 billion in state taxes since 2006, according to the Department of Revenue.

But even if local residents and governments are benefiting, some feel the industry should pay more to do business in the Keystone State. This notion is bolstered by a misperception, often promoted by environmental interests, that gas companies avoid taxes through some loophole.

But drillers pay the same taxes as every other business in the state, and those taxes rank among the highest of their kind. Pennsylvania has the 10th-highest state and local tax burden in the nation, and the second-highest corporate income-tax rate in the world.

That drillers pay the same taxes as other businesses isn't good enough for some, though. They argue that gas extraction imposes environmental and other costs that justify an extraordinary tax. Most of us care about the environment and believe businesses should pay for the government they use, but those calling for an additional tax or fee on drillers fail to understand the industry's true impacts or contributions.

In recommending an impact fee, Gov. Corbett's Marcellus Shale Advisory Commission provided anecdotal examples of potential drilling impacts. But these must be compared with what gas companies contribute.

In addition to state and local taxes, gas drillers voluntarily spent more than $200 million on road repairs and improvements in 2010 alone. Ultimately, Pennsylvania law ensures that drilling companies, not taxpayers, are responsible for whatever environmental and infrastructure damage they cause. And the fees drillers pay to the state Department of Environmental Protection cover the cost of inspections.

Some of the pro-tax pressure is coming from special interests that want more funding for pet programs such as "Growing Greener." Set to lose its funding this year, the program subsidizes a wide range of projects, from alternative energy to downtown redevelopment. In fact, some of the groups pushing for the tax have received such subsidies. No matter how lawmakers or lobbyists sell it, though, Growing Greener has nothing to do with drilling impacts.

Despite the manufactured fears of disaster and cheers for a unique tax on drilling, Pennsylvania can balance economic growth with environmental protection without imposing a new tax. The true impacts of drilling can be addressed by charging drillers fees for services provided, requiring them to be insured for environmental costs, and other measures.

Any impact fee must identify specific costs tied to drilling and demonstrate that they are not already being covered. Otherwise, another tax or fee on the industry is really just a punitive tax on Pennsylvania's people and prosperity. Matthew J. Brouillette is president and CEO of the Commonwealth Foundation.

Copyright (c) 2011, The Philadelphia Inquirer

Oil & Gas Post

Promote Your Page Too

EDITORIAL: W.Va. Should Welcome Marcellus Shale Action

- EDITORIAL: W.Va. Should Welcome Marcellus Shale Action

Thursday, July 28, 2011
Knight Ridder/Tribune Business News

The Wall Street Journal wrote tellingly Tuesday of the differences between two other Marcellus shale states, Pennsylvania and New York, which it called "a case study in one state embracing economic opportunity, while the other has let environmental politics trump development."

In short, Pennsylvania "set up a regulatory framework to encourage and monitor natural gas drilling. In New York state, green activists "raised fears about the drilling technique known as hydraulic fracturing and convinced politicians to enact what is effectively a moratorium."

West Virginians should be aware of the economic results of such decisions.

In Pennsylvania, more than 2,000 wells have been drilled since 2008, and gas production rose from

5 billion cubic feet in 2007 to 81 bcf in 2009.

According to a study by University of Wyoming professor Timothy Considine for the Manhattan Institute, the economic benefits of a typical Marcellus well include:

• 62 jobs
• $2.8 million in direct economic benefits from gas company purchases, $1.2 million in indirect benefits from companies in the supply chain, $1.5 million from workers spending wages or landowners spending royalty payments, and
• $2 million in federal, state and local taxes.

Pennsylvania's Department of Labor and Industry reports that Marcellus drilling:

• Has created 72,000 jobs,
• That the average wage is about $73,000, and
• That 857 oil and gas companies paid $238 million in taxes in the first quarter of this year -- $20 million more than the total for 2010.

"And all of this with no evidence of significant environmental harm," the Journal said.

"Then there's New York."

Indeed. People in Broome County, N.Y., can look across their border with Pennsylvania and see the benefits they are not getting because of economically suicidal state policy.

West Virginians love their lush green state, and their concerns about its environment are understandable.

But given Pennsylvania's experience -- no evidence of significant environmental harm -- state residents should weigh the alarmists' warnings carefully.

West Virginians do not love being 49th in per capita income, and they have a chance to change that.

Copyright (c) 2011, Charleston Daily Mail, W.Va.

Oil & Gas Post

Promote Your Page Too
LINK

EDITORIAL: Govt May Jeopardize Oil Production for Lizard

- EDITORIAL: Govt May Jeopardize Oil Production for Lizard

Thursday, June 02, 2011
The Gazette, Colorado Springs, Colo.
by Wayne Laugesen

It could be a tough summer -- unless one is a lizard.

Fears of a stalling economy sent the Dow on a 280-point plummet Wednesday. Housing values fell to their lowest in 10 years. Federal estimates of 180,000 new private-sector jobs in May fell short by 142,000.

Pain at the pump approaches $4 a gallon, which makes it difficult to prosper and create jobs.

In this time of economic burden, our federal government suddenly wants to protect the dunes sagebrush lizard. The tiny brown lizard lives among oak shrubs on Texas sand dunes, amid some of country's most productive oil wells.

The U.S. Fish And Wildlife Service, bolstered by activists, wants to list the lizard as endangered. In doing so, the government could shut down or hinder production of up to 1 million barrels of oil a day.

There is no proof that oil production threatens extinction of the lizards, and they are not confined to the dunes above Texas oil deposits. It appears as just another effort to exploit the cause of an obscure species at a tremendous risk to the fundamental welfare of humans. It is similar, though many times more serious, to the economic growth barriers erected in Colorado by an urgent need to save the Preble's meadow jumping mouse. The mice are plentiful in Colorado and Wyoming, but environmentalists and the federal government want to protect them only in Colorado -- where they come in useful for impeding economic growth.

"Bad science leads to bad policy," Texas land commissioner Jerry Patterson wrote in the Austin American-Statesman. "And that defines the current administration's domestic energy policy that seeks to close off more and more areas to oil and gas production. A policy which can be summed up as: 'Not here.'"

Our economy needs oil in order to create prosperity and jobs. Without economic growth, we can forget about maintaining federal entitlements and the quality of life enjoyed by all classes of Americans.

Let's be good to God's tiny creatures, taking reasonable measures to ensure their ability to survive. But let's not look for symbolic opportunities to strain to our economy by killing jobs, raising fuel costs and making Americans even more dependent on foreign oil. Let's save the humans, too.

Copyright (c) 2011, The Gazette, Colorado Springs, Colo.

Oil & Gas Post

Promote Your Page Too

EDITORIAL: Indonesia's Geological Prospects Not Enough

- EDITORIAL: Indonesia's Geological Prospects Not Enough

Friday, May 20, 2011
Knight Ridder/Tribune Business News

Most oil executives and hydrocarbon analysts agree Indonesia still has basins with large reserves and its geological prospect is quite attractive with the success ratio of oil prospecting among the highest in the world.

But that seems far from sufficient to woo new investors, as the steady fall in the country's oil and gas production and its decline from a major exporter into a net oil importer have proven. The upstream oil and gas regulatory body (BP Migas) itself acknowledged last week the average daily oil output during the first quarter was less than 900,000 barrels, far below the target of 970,000 bbl.

Last year, Indonesia also failed to achieve its output target of 965,00 bbl, lifting only 954,000 bbl.

Another piece of discouraging news, as purveyed by BP Migas executive Iwan Ratman, is that the implementation of 10 percent of exploration and production development projects this year fell behind schedule due to overlapping concession areas, arduous licensing procedures within regional administrations and land acquisition problems.

Even state oil company Pertamina suffered many delays in exploration works: It planned to drill 147 new wells this year but managed to complete only 25 wells in the first quarter. Worse still many producing fields suffered from unscheduled shutdowns, power-supply disruptions and damages to pipelines.

The three-day 35th annual oil and gas industry convention and exhibition of the Indonesian Petroleum Association which opened on Wednesday should be a great opportunity for the government and oil executives to thrash out the most pressing problems that stand between investors and the geological prospect.

The theme of the convention "Indonesia energy, growth, security and sustainability" fits well with the current situation Indonesia is facing within the hydrocarbon industry.

President Susilo Bambang Yudhoyono pledged at the opening of the 33rd IPA convention in 2009 to resolve regulatory, bureaucratic problems and lack of legal uncertainty that had affected the petroleum industry.

But there remained big concerns about uncertainty over cost-recovery regulations, corruption, interference by government agencies, the sanctity of contracts and the general regulatory structure of the upstream and downstream oil and gas industry. Legal and regulatory uncertainty and inefficient bureaucracy are especially inimical to investors in the upstream segment of the industry as this business involves high risks and requires big capital.

The hydrocarbon industry requires an even better investment climate now because most of the undiscovered, prospective basins are located in frontier, eastern areas.

The eastern regions have potentially big reserves that are not proven yet, but their prospecting requires sophisticated technology and huge investment, estimated at 10 times as large as those in Java and Sumatra, thereby involving bigger risks. Only by increasing proven oil and gas reserves will Indonesia be able to make its production sustainable and sufficient to meet its steadily rising consumption along with the constant expansion of its economy.

But the only way to enlarge its proven hydrocarbon reserves is to increase investment in exploration.

Copyright (c) 2011, The Jakarta Post, Indonesia / Asia News Network

Oil & Gas Post

Promote Your Page Too

Editorial: Oil NIMBY-ism

Editorial: Oil NIMBY-ism

Monday, March 28, 2011

The Washington Post

When was the last time an American president stood before an audience in a foreign country and announced that he looked forward to importing more of its oil? Answer: Just over a week ago, when President Obama joined political and business leaders in Brasilia in hailing the fact that their newly discovered offshore petroleum reserves might be twice as large as those in the United States. Americans "want to help with technology and support to develop these oil reserves safely, and when you're ready to start selling, we want to be one of your best customers," Mr. Obama said.

Brazil is probably a more stable, secure supplier than, say, Libya. Still, the president's words were ironic. Brazil already produces vast quantities of a fuel - ethanol - that the U.S. government, under a policy long supported by presidents and farm-state members of Congress from both parties, has promoted as a green alternative to gasoline. But the United States, protecting its own heavily subsidized ethanol industry by means of a 2.5 percent tariff and a 54-cent-per-gallon duty, prevents Americans from importing all but trivial amounts of the stuff from Brazil. Therefore, we need more oil - much of it imported. In Brasilia, Mr. Obama spoke of strengthening U.S.-Brazilian technical cooperation on ethanol but did not propose allowing U.S. protectionist measures to lapse after their scheduled expiration on Dec. 31.

As for offshore drilling, Mr. Obama's enthusiasm for punching holes in the ocean floor off Brazil is hard to reconcile with his decision, announced Dec. 1, to keep the waters off the East and West coasts and the eastern Gulf of Mexico off-limits to exploration indefinitely. His policy was a reversal of an earlier decision he had made to open some of those areas. We can understand that reversal, after the massive oil spill in the western Gulf last year. And, demonstrating a measure of flexibility even after the disaster, the administration has announced five deep-water drilling permits in the western Gulf since the spill.

The vast majority of U.S. shores, however, have remained off-limits for decades. This, too, is a policy made by two parties, with Republicans opposing drilling when it suited them; President George W. Bush prevented drilling off the Florida Gulf Coast in part to boost his brother Jeb's 2002 run for a second term as governor. But it is tough to reconcile with U.S. eagerness to "help" Brazil pump oil off its coasts and ship it here. U.S. companies, enticed by government loan guarantees, are already lined up to sell Brazil drilling equipment and services. Forget the implications for U.S. dependency on foreign sources. What does this posture say about American regard for the natural environment outside U.S. territory?

Privileged residents of scenic landscapes in America have long cried "NIMBY" - "Not In My Back Yard" - to stave off unwanted but necessary projects, from railway tracks to wind farms to power lines. Now NIMBY-ism, it seems, has become U.S. policy on offshore oil production. But the Nigerias, Angolas and Brazils of the world do not have that luxury. This makes no sense, economically or environmentally, and, sooner or later, a more balanced view must prevail.