Original Article

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Sept. 15 — Nearly two thirds of America’s voters oppose raising taxes on the oil and gas industry in the US and believe it could destroy jobs, the American Petroleum Institute announced on Sept. 14. API said a telephone survey it commissioned by Harris Interactive found that 62% of the respondents opposed increasing oil and gas taxes, and 60% said it could cost the nation jobs.

“Voters fear that raising taxes on an industry that provides most of their energy and supports more than 9.2 million jobs would hurt them and damage the economy,” said API Pres. Jack N. Gerard. “They think it could cost jobs, and that’s exactly what two recent studies show.”

Gerard noted that based on a Wood Mackenzie analysis in August of production impacts from eliminating the manufacturing and intangible drilling cost tax deductions for the oil and natural gas industry, API calculated 58,800 jobs would be put at risk in 2011 and 165,000 in 2020.

A separate study of the impacts of ending the manufacturing tax deduction and increasing taxes on the industry’s foreign-earned income by Louisiana State University finance professor Joseph R. Mason concluded that 154,000 jobs could be lost in 2011, Gerard said.

Mason’s study, which was released on Sept. 13 by the American Energy Alliance, an Institute for Energy Research affiliate, also indicated that excluding the oil and gas industry from the manufacturers’ tax deduction and repealing dual capacity foreign tax credits would reduce US economic output by $341.3 billion, tax revenue by $83.5 billion, and workers’ wages by $67.8 billion between 2011 and 2020.

Aids foreign competitors
“Double taxing US businesses would help foreign competitors, including BP and several national oil companies,” Mason said during a Sept. 13 Capitol Hill briefing sponsored by the Natural Gas Supply Association. “China, by the way, has just received permission to drill offshore Cuba in tracts closer to Florida than what the US government proposed.”

Removing excess regulatory restrictions and leasing more of the US Outer Continental Shelf would stimulate domestic economic growth more than increasing oil and gas industry taxes, he maintained. “Drilling more of the OCS is being vilified in the wake of the Deepwater Horizon accident and the financial crisis—in my opinion, needlessly,” Mason said.

At a Sept. 14 press teleconference, Gerard said that more than 8,500 people attended seven rallies in five states which API held in the past few weeks. “The speakers were local. Discussion about jobs and energy policy was the main message,” he said. “We are helping people who attended the rallies makes their views known on jobs and energy issues to their representatives in government. Now that we’re back in Washington, we are going to keep the rally energy growing and plan to mobilize even more people as a part of our expanding grassroots network.”

Since many who may be concerned about higher oil and gas taxes and their economic impacts could not attend an API rally, Gerard said that the trade association will launch one online, “a virtual meeting space for our energy advocates,” on Sept. 20. “Rally-goers will be able to send a message to Congress and have their voices heard,” he said.

The US oil and gas industry is one of the biggest US taxpayers, according to API. It said that the US Energy Information Administration calculated that the industry paid almost $100 billion in federal income taxes in 2008, the latest year for which data is available. A review of Compustat data shows that the industry had a 48.4% effective average tax rate in 2009, compared with 28.1% for the rest of the companies in Standard & Poor’s industrial index, API said.

Original Article

An enrollment blast at local two-year universities reflects a confluence of positive factors but also highlights a frustrating reality: At a time when education needs more financial support from the state, it is getting less.

Bossier Parish Community College is reporting record enrollment that is more than 1,000 higher than last year’s 5,400 fall semester count. Attribute that to economic pressures of young and not-so-young adults trying to enhance their employment options, the more modest cost of two-year programs versus four-year campuses, higher admission standards for four-year schools and BPCC’s ongoing nimbleness to address employer needs.

Of the latter, the Bossier City college has expanded its two-year nursing degree program and has added an oil and natural gas exploration technology degree to service Haynesville Shale demands. It’s also doing more with online courses.

Across the river, Southern University’s Shreveport campus won’t formally report its numbers until next week; but as the summer began, Chancellor Ray Belton was expressing concern about the stress points being created by the state’s efforts to reform higher education.

To be sure, this economic downturn is forcing Louisiana to fully confront our upside-down system of too many four-year schools and too few community colleges.

As a result, campuses big and small struggle with budget cutbacks and the specter of more fiscal bloodletting, evidenced by the 35 percent reduction exercise the Jindal administration ran at summer’s end.

Belton told The Times in June that despite the excitement of triple-digit gains over the years, recommendations of the Post-secondary Review Commission and provisions of the LaGRAD Act are forcing the university “to assess the degree to which it can continually support its student access goals given the limited facilities it currently occupies.”

The LaGRAD Act does give colleges and universities the opportunity to raise tuition, but only if they meet a host of measures designed to make higher ed more efficient.

BPCC Chancellor Jim Henderson was looking toward a silver lining of more local autonomy to chart an education course.

Belton cautioned about the realities. Increasing admission standards, retention goals and graduation rates at four-year schools will put pressure on SUSLA, as one of two designated northwest Louisiana campuses “that will be responsible for providing services to students who do not meet the admission requirements of senior institutions.” More responsibility without more resources creates a steep hill.

The debate in Washington is whether we can spend our way out of a recession.

If that theory has any truth, it can best be found in expenditures in education at all levels because investing in our people pays dividends.

Through education, we liberate creative minds to solve our problems and create the work force needed to build a better state.

Original Article

White House’s new ’stimulus’ plans would trigger loss of $341 billion in economic activity

WASHINGTON, Sept. 13 /PRNewswire-USNewswire/ – Louisiana State University Endowed Chair of Banking and nationally-renowned economist Dr. Joseph R. Mason estimates that President Obama’s proposed energy tax changes would trigger grave economic consequences. In the newly released “Regional and National Economic Impact of Repealing the Section 199 Tax Deduction and Dual-capacity Tax Credit for Oil and Gas Producers,” Dr. Mason finds the resulting fallout over the next ten years would include:

• Initial losses of over 154,000 jobs by the end of 2011, not only in the energy sector but across the whole economy;
• More than $341 billion in lost U.S. economic output; and
• In excess of $68 billion in lost wages nationwide.

“As we’ve seen in its 2011 budget and newly unveiled ’stimulus’ plans, the Obama administration aims to single out U.S. oil and gas firms and raise the cost of energy for consumers by eliminating crucial tax credits to which all taxpayers are entitled,” Dr. Mason said.

“Though politicians think they are selectively targeting ‘Big Oil’ with these energy tax proposals, they would actually devastate thousands of small American businesses nationwide as well as the workers who depend on them. With at least 150,000 U.S. jobs at stake – in fields ranging from healthcare to real estate – it’s clear that the costs of repealing Section 199 and dual capacity far outweigh the potential benefit of increased government revenues that may be derived from the proposal.”

“The discriminatory energy tax increases proposed by the administration will destroy American jobs and raise the price of energy for consumers,” president and CEO of the American Energy Alliance Tom Pyle said. ”President Obama’s proposed changes — which would apply solely to oil and gas companies — have little to do with the debate over offshore drilling safety or even energy policy in general. This tax grab merely represents punitive policies that are now finding a place in the sun in the post-BP oil spill crisis political environment.”

Using the government’s own economic model – the U.S. Commerce Department’s RIMS II system – Dr. Mason provides incredibly conservative economic impacts. In fact, these already staggering estimates do not even include the effects of the proposed tax increases on individual investors. That means if Congress implements these proposed changes, the economic fallout could be even more substantial.

Dr. Mason’s report was sponsored by Save U.S. Energy Jobs – a project of the AEA – established to help promote the nation’s energy sector. To learn more and get exclusive information on upcoming projects, follow Save U.S. Energy Jobs on Twitter and Facebook.

Founded in May, 2008, The American Energy Alliance (“AEA”) is a not-for-profit organization that engages in grassroots public policy advocacy and debate concerning energy and environmental policies.  AEA is the advocacy arm of the Institute for Energy Research (IER), a not-for-profit organization – founded in 1989 – that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets.

SOURCE American Energy Alliance

Original Article

By Michael J. Economides

There is a vicious war being waged against the public interest by environmental groups, even if these organizations couch their claims as a war against fossil fuel companies. In particular, attacks on the natural gas production process known as hydraulic fracturing, or “fracking,” have recently escalated into a full-scale war.

This week, Binghamton will become the epicenter of this battle as opponents of fracking descend on the city in an attempt to influence the EPA’s regional meeting on the topic.

Two notable lies about hydraulic fracturing have been widely spread. The first is that fracking causes natural gas to migrate upwards through geological formations, infiltrating drinking water aquifers. The second is that chemicals mixed with fracturing fluids will contaminate the same drinking water.

I have worked in the field of hydraulic fracturing for more than 25 years, have consulted with energy companies in more than 70 countries and have trained more than 6,000 engineers worldwide. I can say with confidence that these lies are especially deceptive.

The idea that natural gas formations 10,000 feet below ground can somehow contaminate drinking water aquifers that are 9,500 feet higher than the actual fracture height is false. Ironically, in fracture design, engineers go to great lengths to avoid fracture growth of even 100 feet to avoid losing production to another natural gas formation.

If the fracture height cannot connect the gas reservoir with the water aquifer, then contamination is virtually impossible. Even if that were the case, meaning the multiple layers of different rocks between the reservoir and the aquifer were extremely porous, the reservoir would not have existed in the first place. All of the natural gas would have leaked naturally to the earth’s surface over millions of years of geologic time.

Regarding the assertion that fracking fluids will contaminate drinking water, one of the chemicals in question is diesel. This chemical’s supposed danger was singled out in an Aug. 5 press release distributed by two environmental organizations, the Environmental Working Group and Earthworks.

The release states, “Currently, there is not a system in place to make sure that toxic diesel fuel is not polluting our drinking water sources … Full regulation of hydraulic fracturing is needed to ensure that our drinking water is protected.”

Contrary to these claims, the chemicals deployed during fracking operations are few in number and are not threatening. They are mostly gelling agents used to thicken water, providing for the transportation of particulates during the drilling process.

In fact, these agents are not much different from common kitchen flour.

Over the past 60 years, fracking has been applied to millions of wells worldwide with virtually no incident and without any physical evidence that it can contaminate drinking water.

What is more, the damage to the U.S. supply of affordable and reliable energy is enormous. This war on fracking jeopardizes more than $200 billion per year in U.S. economic activity, and this is just the incremental value added at the wellhead. The multiplier effect throughout the American economy of foregoing production of these valuable resources would be several times greater.

So, hopefully, citizens attend this week’s hearing to tell the government how much their local communities need the jobs America’s energy producers can provide.

Dr. Michael J. Economides, editor-in-chief of the Energy Tribune, is a professor at the University of Houston’s Cullen College of Engineering.