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Wednesday, January 05, 2011

The Oil and Natrual Gas Industry, By The Numbers

Talk about numbers.

Hey folks,

Just yesterday, I talked about the Obama Administration, by the numbers. A lot of numbers, things are worse in this Country as a result. Oh, Obama and Crew are HAPPY with most of what they have achieved. However, America is far worse off for it.

Yesterday, the President of API, Jack Gerard, gave a Speech at the Newseum in Washington, D.C. Talk about numbers.

57,000 new jobs in Pennsylvania and West Virginia alone,

$95 million each day in taxes,

9.2 million American jobs.

That includes 2.1 million workers directly employed exploring, producing, refining, transporting and marketing oil and natural gas.

7.1 million workers whose jobs support the oil and natural gas industry.

A POSSIBLE $1.7 trillion in Government Revenue

A POSSIBLE 340,000 new American jobs and economic benefits that could add up to $34 billion to our GDP by 2015 in greater Canadian Oil Sands production.

A POSSIBLE 100,000 new jobs, millions in tax revenues, and royalties and lease payments topping $2 billion a year in increased Oil Shale Production.


How can we get there? How can we tap into these numbers? We can get there in two steps. First is access.

For starters, there are vast reserves of domestic resources that are currently off limits to exploration and production: billions of barrels of oil and trillions of cubic feet of natural gas … onshore and off. And those estimates are most likely conservative given our past experience and new advanced technologies.
Basically, the Federal Government needs to get out of the way. With this Administration's Policies, we have seen the exact OPPOSITE effect.

We’ve already seen some companies send their idled Gulf rigs to waters off the coast of Africa and South America—and other companies are discussing plans to relocate their Gulf rigs to places where exploration and production continue.

And as these rigs leave us, so do the jobs and revenue they create.

A policy environment that creates and sustains a level playing field for all energy sources will help drive us to recovery. Anything else will idle it, taking revenue lower and leaving policymakers with fewer options.

So the way I see it, our policymakers are at a crossroads. They face two choices: One leads us forward and promotes jobs, investments, revenue and growth… or one that takes us backward, threatening the progress we’ve made and closing the door on future opportunities.
Look, even with all the "Green Dream" talk, ALL the projections show that Oil and Natural Gas will STILL fuel over 50 percent of all Energy Needs World Wide all the way up to 2035 and beyond. Second is Taxes.

Our industry pays an effective tax rate of 48.4 percent of pre‐tax, net income – nearly double what other industries pay. In 2008, it paid more than $95 billion in income taxes alone.

In the long run, the negative economic consequences of higher taxes more than offset any short‐term tax revenue gains … an additional $5 billion in new, annual taxes—similar to what’s been proposed by the administration, or some in Congress—could actually decrease cumulative government revenue by $128 billion by 2025.

And even worse, higher taxes could result in the loss of tens of thousands of jobs between now and 2025. Right around the corner, in 2014 alone, we’d lose 170,000 of these jobs.
Contrary to standard Liberal Ideology, More Taxes DECREASE Revenue. Over tax a Company, or Individual, they will find ways around it, causing less Revenue. That's just Reality.

Economy 101. Oppressive Taxation and Regulation MAKES the powers to be in Industry, Corporations, and or Individuals, go into self preservation mode. If that means cutting Jobs, to keep the Bottom Line Profitable, then Jobs get cut. Companies, and entire Industries go elsewhere. The Poor and Middle Class are left holding the Bag.

If you DECREASE Taxation and Regulation, Companies, Industries, and Individuals, have MORE money. They expand, create more Jobs, and give Raises and Bonuses. They Produce more and better Products and those Goods and Services cost LESS. The Poor and Middle Class profit and benefit the MOST from this type of policy.

If it costs me, $5.00 to create ABC. I sell it for $10. I sell a hundred. The Gov. gets $2.00 a piece. They just made $200.00. I made $300.00. Now someone in Government says. OK, We are going to reduce your Regulations Cost and Permit, Inspections, ETC. Now it cost me $3.00 to make. Then they say. OK, we will cut your Taxation by 50 percent. Now I can sell it for $6.00. I now sell 1000. Because it only cost people who want it $6.00. Government gets $1000.00 I make $2000.00, I expand and have to hire more people to make more. If Millions are buying ABC, then I may even lower the cost to $5.00, causing even MORE to sell. Making more for EVERYONE involved including the Government.

But if the Government comes in and says It wants $6.00, and another $2.00 in tax. I no longer can afford to produce ABC. Someone else elsewhere says "Oh, come over here. We will only cost you $2.00 to make, and WE only want .50 cents in Tax." You get the point. The Government and the American Worker lose out.

If we open areas that are currently off‐limits to development, we could create more than 500,000 jobs throughout the economy and generate an additional $150 billion in government revenue by 2025.
Get out of the way Government. I agree whole heartily with him on this one.

The American people sent a message last November. They want lawmakers focused on an agenda that promotes growth. And they want job creation at the forefront.

We want the same things. And we’re committed to working with the administration and the new, 112th Congress to make them happen.

Let me be clear: the role of federal regulators is an important one. But it is Congress’s ultimate responsibility to pass comprehensive legislation that will enhance our nation’s energy and climate security.

And it is the regulators’ responsibility to implement these laws consistent with congressional intent.
Just scroll down, or if you are reading this elsewhere, click HERE to see Mr. Gerard's Statement in full.

Like I said before, this new House has an opportunity, and an obligation. They MUST do the right things here. They have to UNDO the Damage that has been done by this last Congress, and the foolish agenda driven decisions by this current Administration. Energy, more specifically AFFORDABLE Energy HAS to be included in ANY plan to help the Economy back. Energy costs go up. EVERYTHING goes up. Energy costs go down to affordable for all levels, so does most everything else. It's really NOT an hard concept to understand. It will even INCREASE Revenue to the Government at the same time. Like I said, talk about numbers.
Peter

Sources:
OPNTalk - The State of American Energy Speech

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