Friday, January 07, 2011

US Desperately Needs a Better Energy Administration

Wood MacKenzie Energy Access Study
The current US energy administration has adopted an official policy of energy starvation, directed against US industry and the US economy overall. Presumably this policy has been adopted with political -- rather than economic -- goals in mind. Persons with less political and more economic concerns are likely to increasingly take issue with the current US energy administration's approach.
If we were really serious about fueling the recovery, we'd be at least as interested in promoting abundant, low-cost energy at a scale suitable for the needs of a $14 trillion economy, and for which employment gains in the energy industry didn't come at the expense of productivity. A study on the trade-offs between resource access and new taxes on the oil & gas industry that was prepared in conjunction with the release yesterday of API's "State of American Energy" report provides a case in point.

An international energy consultancy analyzed the potential production and employment gains associated with expanded access to the domestic resources that are currently off limits in places like the eastern Gulf of Mexico, the Atlantic and Pacific coasts, and the Arctic National Wildlife Refuge. They also looked at the federal revenue and employment impact of higher taxes on the US oil & gas industry, along the lines of a series of proposals from the administration and Congress in the last two years. They found that access to off-limits oil and gas could yield up to an extra 2.8 million barrels per day of oil and gas liquids and 6.6 billion cubic feet per day of gas by 2025, with direct and indirect gains in employment of more than 500,000 workers. By contrast, increasing taxes on the industry would not only reduce production and employment, as domestic opportunities become less attractive than those elsewhere, but also reduce total federal revenues from taxes, royalties and leasing, following a brief uptick in the initial period after their introduction. _GeoffreyStyles

Wood Mackenzie Energy Access Study
The industry supports more than $1 trillion in annual
contributions to the U.S. economy, or 7.5 percent of Gross Domestic Product (GDP);
The industry has invested $1.66 trillion in U.S. capital projects in the last decade;
4 The industry paid $95.6 billion in 2008 income taxes alone;
4 The industry paid more than $178 billion to the U.S. government in rent, royalty and bonus payments from 1982 through 2009; and
4 Increased access to U.S. oil and natural gas resources currently off-limits could generate an additional $1.7 trillion in government revenue over the life of the resources creating jobs

4 The oil and natural gas industry supports more than 9.2 million U.S. jobs;
4 Developing U.S. oil and natural gas resources currently off-limits in the
Outer Continental Shelf (OCS), the Arctic National Wildlife Refuge (ANWR) and the Rockies could create 160,000 new jobs by 2030;
4 Expanding Marcellus Shale natural gas development could add 280,000 jobs
over the next decade;
4 Greater Canadian oil sands production could create more than 340,000 new jobs in the United States alone; and
4 Many other opportunities exist to create jobs through increased energy production in the United States.

4 The United States will require more energy of all types, including oil and natural gas, to meet future energy demands—a challenge and opportunity that will be met through continued industry investments in technology and innovation;
4 The industry has invested $194 billion since 1990 toward improving the
environmental performance of its products, facilities and operations; and
4 The industry has invested $58.4 billion in low-and zero-carbon emissions
technologies from 2000 to 2008—more than either the federal government or all
other U.S.-based private industries combined.
5 _API
Energy should not be a political plaything for dilettantes and fools in high places. It is a matter of life or death for communities, societies, and civilisations.

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