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by matthew rees
(norwich norfolk uk)
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Sunday, April 8, 2012
Feb 9, mechanic/fitter
Energy Works in Virginia
For the state of Virginia, the oil and natural gas industry currently means:
More than 128,000 statewide jobs provided or supported – with an average salary of $57,281 for non-gas station oil and natural gas employees.$6.5 billion contributed to state labor income.$11.6 billion contributed to the state’s economy.With sensible energy development and sound tax policies, here’s what the oil and natural gas industry could mean to Virginia:
3,606 additional jobs created by 201516,401 additional jobs created by 2020An average of $77.7 million of new, additional revenue generated by the industry directly to the state every year through 2030. That’s enough to cover more than half of Virginia’s general fund contribution for the University of Virginia every year, without using additional taxpayer dollars.Energy works in Virginia, with the men and women of the oil and natural gas industry playing a critical role in that state’s economy. See more, here.
The President’s ‘Anti-Stimulus’
From the president’s remarks during Monday’s rollout of his 2013 budget:
“The last thing we need is for Washington to stand in the way of America's comeback.”
The president is 100 percent right – and he can put his words into action by dropping his politically motivated obstruction of the Keystone XL pipeline.
The Keystone XL is the largest shovel-ready infrastructure project available to help spur the economic revival everyone wants. The $7 billion, privately financed pipeline would create 20,000 U.S. jobs during its construction phase and up to 500,000 U.S. jobs by 2035 as a big part of a comprehensive strategy to fully utilize Canada’s oil sands resources. Energy to run our economy and jobs. But we need Washington to get out of the way.
President Obama:
“We need to … [end] the subsidies for oil companies … The budget that we’re releasing today is a reflection of shared responsibility. … I want everybody here to go out there and do great. I want you to make loads of money if you can. That’s wonderful. And we expect people to earn it -- study hard, work hard for it. So we don’t envy the wealthy. But we do expect everybody to do their fair share …”
Unfortunately, the president’s budget would place Washington squarely in the path of America’s economic comeback by increasing taxes on the country’s energy companies by $41 billion over 10 years.
Although the oil and natural gas industry is its own stimulus, contributing $476 billion to the economy in 2010 and projected by Strategic Energy & Economic Research’s Michael Lynch to spend $145 billion this year on drilling and completing new wells in the U.S., the president would saddle the industry with new taxes – hampering its ability to develop new energy sources and create new jobs.
Instead of standing in the way of the economic lift the industry could provide by threatening tax increases, the president should consider policies that could allow the industry to create 1 million new jobs in just seven years and increase revenue to the government by $127 billion by 2020 – three times the amount his tax hike would raise.
API President and CEO Jack Gerard:
“Increasing our taxes would push oil and natural gas investment overseas and diminish job-creation and economic activity here at home. After a handful of years, we would see less domestic energy production – particularly of natural gas – more imports, fewer new jobs, and, eventually, depressed tax, royalty and other revenues. Frankly, the administration should be trying to replicate the success America’s oil and natural gas industry has had in creating jobs and growing the economy primarily through development on private and state lands. The evidence clearly shows that what we’re doing is working. If the industry’s job-creating investments are a stimulus for the nation, then what the administration is proposing is an anti-stimulus.”
One more point on taxes: The president is wrong about subsidies. The oil and natural gas industry doesn’t receive targeted subsidies from Washington. More on that here.
As for shared responsibility, the fact is America’s oil and natural gas companies pay $86 million every day to the U.S. Treasury in rents, royalties and income taxes. They pay their fair share and more than any other sector:
As Gerard noted to reporters Monday during a conference call, Apple is one of the country’s most profitable corporations, but no one is talking about singling it out for a tax hike – nor should they. That would be punishing the success the president says he favors.
“We want to lock arms with the president,” Gerard said. But it will take policies that help increase domestic oil and natural gas production and the American jobs that go with it “instead of penalizing the best job creator in the country.”
Hydraulic Fracturing and Regulation
Shale oil and natural gas development in the United States has been a clear economic success story during a time when successes have been few. Our industry has been producing energy, jobs and revenue at a strong clip. And yet we’ve only begun to realize the benefits of energy from shale.
The industry is committed to producing this energy safely and responsibly, and in addition to strong industry standards, there are appropriate federal and state regulations in place for oil and natural gas operations, including those that employ hydraulic fracturing. And many state rules have recently been strengthened.
So it is a concern that there are now 10 separate federal government agencies looking to study and potentially add new and unnecessary layers of regulations on hydraulic fracturing, the technology on which 70 percent of future gas wells depend.
Unnecessary layers of federal regulation could increase costs and delays for operators, which could harm new projects, sacrificing thousands of new jobs and depriving government of billions in revenue.
We are strongly encouraging policymakers and elected officials to keep shale energy development moving forward. So during this election year, we will encourage voters to learn more about energy and about the candidates’ positions on energy policies, and to make energy a ballot box decision in 2012.
The benefits of shale energy development are indisputable.
Just yesterday, a new study in Ohio said development of the Utica Shale could mean 65,000 new jobs in the next two years.In Pennsylvania, development of the Marcellus Shale created 72,000 new jobs from late 2009 to early 2011. In North Dakota, shale development helped drive down unemployment in the state to the lowest level in the nation, helped produce a state budget surplus of $1 billion, and elevated North Dakota to the nation’s fourth largest oil producer. In Arkansas, shale development has boosted state revenue by more than $1.5 billion over the last few years. Houston is the first metropolitan area in the United States to regain all of the jobs lost during the recession, an analysis by the Texas Workforce Commission has concluded. Many of the new jobs likely relate to the oil and natural gas industry and to shale development.A study by former Census officials of U.S. household income in nine geographic regions between 2007 and 2010 found it increasing only in the four-state oil patch region: Louisiana, Texas, Oklahoma and Arkansas – all centers of shale energy development.Nationwide, shale gas development was supporting 600,000 jobs in 2010, according to a December IHS-Global Insight report.Also, natural gas prices have fallen by half from their level three years ago. That is benefiting families that heat their homes with natural gas, as well as businesses and consumers that buy their electricity from utilities that generate it with natural gas. Low natural gas prices are also benefiting chemical manufacturers and other businesses that use natural gas a raw material, and they are encouraging businesses to locate new facilities in America rather than overseas. Dow Chemical, for example, plans to reopen an ethylene production plant near Hahnville, Louisiana, this year and build another one on the Gulf coast by 2017. It also plans to build a new propylene plant in Texas by 2015.And there is every reason to believe we could see more of all of these benefits in the future. The IHS-Global Insight study estimates that the shale gas industry alone could support 1.6 million jobs by 2035, driven by capital investment approaching $2 trillion.
Finally, an analysis from PricewaterhouseCoopers concludes that shale gas development – and more affordable natural gas supplies – could support about one million U.S. manufacturing jobs in 2025.
To realize the full extent of this promise, therefore, we must be thoughtful about any changes to an already robust regulatory structure for hydraulic fracturing. We don’t need unnecessary or duplicative rules from multiple federal agencies.
The administration has been advocating more oil and natural gas development. It has also called for streamlining regulations. We believe they could do much to achieve both objectives by taking a critical look at what its various agencies are proposing to do on hydraulic fracturing and shale energy development.
The direction they’re headed in won’t be conducive to the development of energy we know our nation will need and the production of which could provide tremendous additional benefits to our economy. The administration needs to reconsider the wisdom of adding unnecessary layers of federal regulation on this truly game-changing opportunity. A significant change of course is needed.
A Decade Later, Still Waiting on ANWR’s Oil
Remember how opponents of greater access to U.S. oil and natural gas resources scoffed at the idea of developing reserves in remotest Alaska, saying the oil would take 10 years to come online and therefore wouldn’t help crude supplies in the Lower 48?
Guess what: We’re there. It’s 10 years later, and those reserves in Alaska are still waiting to be tapped – even as Washington enters another round of finger-pointing over energy.
Here’s an indisputable point: If access to an airport-sized swatch of the 19-million-acre Arctic National Wildlife Refuge (ANWR) had been granted a decade ago, a million barrels of oil per day could be part of America’s supply equation instead of an academic debating point. As the debate renews, National Review’s Jim Geraghty helps out with a list of some of the ANWR naysayers:
Sierra Magazine (Jan-Feb issue 2002): If drilling were approved today, it would be ten years before oil arrived in refineries.”
U.S. Sen. Maria Cantwell (April 17, 2002): “Oil extracted from the Wildlife Refuge would not reach refineries for seven to ten years and would never satisfy more than two percent of our nation’s oil demands at any one time.”
Vice President Al Gore (Sept. 30, 2000): “It would take years and years of development, which would cause decades of environmental damage, to reap just a few months of increased oil supply.”
President Obama (Feb. 28, 2006): “We could start drilling in ANWR today, and at its peak, which would be more than a decade from now, it would give us enough oil to take care of our transportation needs for about a month.”
Because of the time it takes to produce oil from federally-leased areas – up to a decade onshore and seven to 10 years offshore – it’s obvious that sound energy policy requires leadership and foresight. In the case of ANWR, sufficient vision was unfortunately lacking, and its valuable resources remain underground instead of helping to supply our energy needs.
Now, as the ANWR debate is virtually certain to renew, who’ll be the first to dismiss the reserves’ oil because it won’t be available for a decade or more …
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