Among the many issues covered by the President in last night’s State of the Union address one theme crept throughout President Obama’s narrative; jobs and his desire to put Americans back to work and the American economy back on track. Well, President Obama is in luck because the American energy industry has some good news…not that it is necessarily “new” news since industry has been telling anyone and everyone who would listen. Has the President not been listening? That is a topic that deserves its own discussion.
Last night the President said, “And no area is more ripe for such innovation than energy. You can see the results of last year’s investments in clean energy -– in the North Carolina company that will create 1,200 jobs nationwide helping to make advanced batteries; or in the California business that will put a thousand people to work making solar panels.” That is 3,200 jobs, and that is good news. I wholeheartedly support any and all efforts to provide work to Americans who need it. However, ongoing efforts by his party and cabinet are putting tens of thousands of existing and countless more potential jobs in jeopardy.
The Latin American Herald is reporting today that the Obama Administration, through the U.S. Export-Import Bank, is loaning Petrobas of Brazil $10 billion to develop Brazil’s recent offshore find.
This loan is equal in value to a line of credit extended by the Chinese government. Under the terms of the Chinese deal the loan can be paid back with crude oil.
According to the article, the President’s national security advisor, General James Jones, was sent to Brazil to discuss the matter. Maybe this is a stretch but I’m willing to make it; this is probably done in the interests of national security. One would think that if the administration can recognize the national security value of Brazilian crude then clearly the value of U.S produced energy must be valued accordingly and thus encouraged. One would be wrong. Let’s examine this administration’s recent history with U.S. energy production.
- Proposed the repeal of $31 billion in tax incentives specifically geared toward encouraging and maintaining production of natural gas and crude oil in the U.S.
- Delayed implementation of the 5 year plan to open U.S. outer continental shelf areas to leasing for exploration and production.
- Vilified the use of over-the-counter markets (OTC)to trade in natural gas and crude oil futures stating, ““For the past years, our energy policy in this country has been simply to let the special interests have their way — opening up loopholes for the oil companies and speculators so that they could reap record profits while the rest of us pay $4 a gallon”.
So the administration sees fit to:
- Invest in energy production, as long as it is not U.S. energy production
- Drill offshore, provided it is not U.S. waters
- Speculate on natural gas and crude oil futures, as long as it is not U.S. companies doing the speculating.
My mind is sufficiently boggled, how about you?
Petroleum based business success. In a bottle. Someone call the White House...
On Monday, March 16th, President Obama and Treasury Secretary Geithner made the case for American small business during a White House press conference. It was an encouraging development for many of the small business owners and employees that help drive the American economy. However, taken together, President Obama’s plan to assist small businesses and his FY10 budget proposal send a mixed message. The summation of recent statements made by both Obama and Geithner now suggest that while they value what defines independent producers, responsible for 90 percent of American natural gas and oil wells, they are still in favor of imposing detrimental tax proposals on these American small businesses.
With a median number of 12 employees, independent producers are American small businesses by definition, and the Obama administration should have clarified their support for what natural gas and oil independents really are. The budget outline proposed by the President would eliminate eight key provisions that aid America’s smaller natural gas and oil companies. The effect would cripple the independent producers that find and provide American energy for the nation, and would negate any improvement that might be seen from the small business announcement made.
The following is a closer look at the comments made by the President and Secretary Geithner during the press conference. Continue reading
The American Energy Alliance (AEA) released a new study about the benefits Americans could realize if Congress pushes forward with energy development on the Outer Continental Shelf (OCS). According to the analysis, over the life of the production offshore, access to these vast resources would generate:
- $8 trillion in additional economic output (GDP);
- $2.2 trillion in total tax receipts;
- 1.2 million new, well-paying jobs annually across the country; and
- $70 billion in additional wages each year.
As AEA President Thomas J. Pyle said in a statement: “Unlike the $790-billion stimulus package lawmakers just passed, increased offshore activity would fuel our economy without squandering taxpayer funds. In fact, oil and gas is one of the U.S.’s only industries in a position to put money into, rather than take money out of, the government’s piggybank.”
IPAA Director of Government Relations and Industry Affairs Joel Noyes provided comment on the study to the International Business Times and said, “We are hopeful that these figures will have an impact [on the Congressional decision]. We haven’t seen that impact yet but it is a message that we will continue to get out.” Continue reading
IPAA President and CEO Barry Russell sent a letter to President-Elect Obama today congratulating him on his historic election to the Presidency. In the letter, Russell expressed IPAA’s appreciation of Obama’s pledge to seek a comprehensive policy to achieve energy independence and reiterated the importance of the independent producer in providing the nation’s oil and gas supply.
Mr. Russell did not inquire or push on the issue of what breed of dog the Obamas will bring to the White House. The full letter can be found at www.ipaa.org.