US House Panel to Draft Plan to Split Federal Oil Money with States

- US House Panel to Draft Plan to Split Federal Oil Money with States

Wednesday, July 27, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

The House Natural Resources Committee plans to draft legislation that redirects a portion of federal oil royalties to coastal states, ramping up debate on an issue that has also intensified in the Senate.

Rep. Doc Hastings (R., Wash.), chairman of the Natural Resources Committee, said at a hearing Wednesday that he was "actively" reviewing proposals to share federal oil revenue with the states. He said his committee would take up legislation to address the issue after a summer recess.

"When it is all boiled down, a revenue-sharing proposal is, and must be, about fairness," Hastings said.

Hastings didn't say how much royalty revenue he wanted to steer toward the states. A proposal in the Senate directs 37.5% of federal oil royalties to the states. With the federal government reporting more than $5 billion in offshore royalty revenue in 2010, such a move would be a big win for coastal state governments.

Debate over revenue-sharing proposals has intensified in recent weeks as lawmakers look for ways to reduce spending and raise revenues as part of plans to increase the debt ceiling.

Opponents of revenue-sharing plans, often Democrats and lawmakers from non-coastal states, say it would be unwise for the federal government to give up billions of dollars of oil royalties at a time when it's struggling to claw its way out of debt.

Rep. Ed Markey (D., Mass.), the highest-ranking Democrat on the Natural Resources Committee, said Wednesday that a revenue-sharing plan would be a "big mistake" and that it's "just something [the federal government] can't afford."

"How can we even begin to discuss this subject right now?" Markey said.

Under current arrangements, states collect royalties from oil produced within the first three miles of a coastline. The federal government then collects most of the royalties on oil produced in the next three miles and lays claim to all of the royalties beyond that.

Supports of revenue sharing, often Republicans and coastal state representatives, say state officials will be incentivized to support more offshore oil production if they can collect a greater share of the royalties.

A battle over revenue sharing in the Senate has suspended action on a long-awaited bill that would strengthen safety standards for offshore oil drilling. At a committee-level markup last week, lawmakers blocked a vote on the bill after Sens. Mary Landrieu (D., La.) and Lisa Murkowski (R., Alaska) looked set to fail in their attempts to attach a revenue-sharing proposal to it.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Eight U.S. States Rank Among Top 10 O&G Investment Opportunities

- Eight U.S. States Rank Among Top 10 O&G Investment Opportunities

Friday, July 01, 2011
Rigzone Staff
by Karen Boman

Eight U.S. states made the top 10 list of most attractive jurisdictions worldwide for oil and gas investment, according to Calgary-based Fraser Institute's Fifth Annual Global Petroleum Survey.

Mississippi, Ohio, Kansas, Oklahoma, Texas, West Virginia, Alabama and North Dakota made the top 10 of the All-Inclusive Composite Index; the Netherlands sector of the North Sea and Hungary also are among the top 10, the global policy think-tank reported. Only Mississippi, Texas, Oklahoma and Alabama ranked in the top 10 in the 2010 survey, and were also among the top 10 in 2009.



The least attractive countries for investment include Venezuela, Ecuador, Bolivia, Iran, Kazakhstan, Uzbekistan, Democratic Republic (Kinshasa), Iraq, Libya and Russia. The rankings are based on survey respondents' negative view of these jurisdiction's regulatory, fiscal and environmental regulations, labor availability and skills, quality of infrastructure, trade barriers, land claim disputes and legal system. "Petroleum-producing regions must offer investors competitive tax regimes and regulatory certainty," said Gerry Angevine, Fraser Institute senior economist in the Global Resource Center and co-author of the survey.

The U.S. Gulf of Mexico experienced one of the largest drops in the global rankings, plummeting to 60rh place overall after finishing 11th in the 2010 survey, which was conducted before the Deepwater Horizon oil leak. "The decline isn't surprising, given the greater difficult of obtaining drilling permits in the wake of the BP disaster," said Gerry Angevine.

Jurisdictions which experienced remarkable declines in their attractive investment this year include the Philippines, Uganda, Brunei, Uruguay, Angola, the Democratic Republic of the Congo (Kinshasa), Cameroon, Equatorial Guinea and offshore Alaska.

Unexpected changes to Uganda's taxation system signaled the government's lack of commitment to maintaining a stable policy environment. This lack of commitment was a key factor in Uganda's decline to 123rd place this year from 94th in 2010 in terms of investment attractiveness.

The Democratic Republic of the Congo (Kinshasa)'s ranking also declined to 130th this year from 106th last year. "The arbitrary revocation of exploration rights from one company, and their transfer to another party, likely shattered whatever trust would-be investor may have had in Kinshasa and its ability to administer petroleum industry regulations fairly," said Angevine.

Data was gathered from 502 respondents representing 478 companies on 17 factors covering 136 jurisdictions worldwide. These factors include fiscal terms; tax regime; uncertainty surrounding environmental regulations; uncertainty surrounding interpretation and enforcement of existing regulations; cost of regulatory compliance; uncertainty over what areas are protected wildlife, marine and archaeological sites; socioeconomic agreement and community development conditions; trade barriers; labor regulations; infrastructure quality; geological database quality; labor availability and skills; disputed land claims; political stability; security of personnel and assets; regulatory duplication and inconsistencies; and legal system.

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U.S. Retail Sales Fall 0.2% In May, Smaller Drop Than Expected

- U.S. Retail Sales Fall 0.2% In May, Smaller Drop Than Expected



Jun 14, 2011

The U.S. Census Bureau estimated retail and food services sales for May at $387.1 billion today, down 0.2% from April, but up 7.7% from May of 2010.

Economists had expected a drop of 0.7% for May. The increase from March 2011 to April 2011 was revised down from 0.5% increase to a 0.3% increase.

Excluding slumping motor vehicle sales, which fell 2.9% from April, total retail sales rose 0.3%.

Core sales, which exclude automobiles, gasoline, and building materials, increased 0.2% in May from April.

For the first five months of the year, retail sales have totaled $1.87 trillion, an 8% increase over the same period in 2010.

Sales at gasoline stations, up 17.5%, lead the pack, followed by sales of motor vehicles, which despite slumping in April and May due to the Japanese earthquake, are still up 13.3% so far this year.

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Nissan Could Delay Start of U.S. Leaf Production

- Nissan Could Delay Start of U.S. Leaf Production



Jun 14, 2011

Nissan (PINK:NSANY) may be forced to delay the start of U.S. production of its Leaf electric car due to the disruption caused by March's earthquake in Japan, Hideaki Watanabe, VP in charge of Nissan's global Zero Emission Vehicle business unit, tells the Detroit News. The executive says many timetables have been thrown off by the March 11 quake, but adds that it is too early to estimate how long of a delay there may be for U.S. Leaf production.

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