Taxing America's Largest Corporations

Steve Forbes on Obama's Anti-Oil Agenda

Steve Forbes: Obama’s anti-energy agenda kills jobs

“His reelection campaign in full swing, President Barack Obama is blaming obstinate congressional Republicans for his failure to advance a jobs plan in an economy that’s averaged 9 percent unemployment and crossed the $1 trillion deficit threshold for the third straight year.

Members of Congress on both the right and the left, however, stopped Obama’s American Jobs Act in its tracks. They recognized it for what it was: a glorified repackaging of tax increases that have rightly failed several times before. Undaunted, the White House and some of its strongest allies are coming back for more — adamant that the jobs landscape and our economy would improve if only Congress would pass a national energy tax.

Thirty-seven House Democrats and 14 of their Senate colleagues this month sent separate letters to the bipartisan supercommittee calling for an end to industry “subsidies” they claim would save the government $21 billion over 10 years.

Before beginning the eye roll for defending Big Oil, consider this: The influx of revenue expected from rolling back these fossil-fuel “subsidies” — close to $90 billion when factoring in the effects on related industries — is actually a national energy tax that will likely come straight from the pockets of American consumers.

By definition, government imposes a tax on an activity or product to discourage, not incentivize, it. Why, then, would the administration repeatedly target one of the only industries that’s actually creating jobs?

This blatantly contradicts the president’s pro-jobs rhetoric.

If the administration were serious about deficit reduction and accelerated job growth, it would partner with our domestic energy producers to help increase their employment base — which now encompasses more than 9 million affiliated jobs — by letting them expand their output. This, in turn, would expand their gross domestic product contribution, which averages $1 trillion annually.

Instead, Obama has cast the industry as a ruthless competitor for taxpayer handouts. If this seems exaggerated, take it from the president himself, in his address to a joint session of Congress last month.

“Should we keep tax loopholes for oil companies?” Obama asked. “Or should we use that money to give small-business owners a tax credit when they hire new workers? Because we can’t afford to do both.”

What the president knows, but fails to divulge in making his case, is that U.S. oil and natural gas companies do not receive taxpayer subsidies. The provisions he’s targeting for repeal are the same tax credits and deductions available to a broad swath of other U.S. companies — including a domestic manufacturing credit and a measure to prevent double taxation on income earned abroad.

If the White House has a reasonable explanation for how raising taxes on one industry without broader tax reform can create jobs, I’ve yet to hear it.

Real tax reform that closes loopholes in favor of lower rates is an idea that I support wholeheartedly. That’s why I have long advocated the flat tax. In fact, I recently endorsed and continue to advise Texas Gov. Rick Perry, who is now proposing his own version of the flat tax.

Repealing tax credits and deductions for only one industry, however, is the opposite of tax reform. It’s a classic Washington game of using the Tax Code to pick winners and losers.

Critics will predictably counter that the oil and gas industry, as a pillar of strength in an otherwise bleak economy, shouldn’t hesitate to pay more taxes.

This is preposterous. U.S. oil and gas producers now pay the federal government more than $86 million a day in taxes, royalties and fees.

The industry is taxed at an effective rate of 41 percent. For comparison, the average tax bracket for industrial companies is 26 percent. The oil and gas industry pays its fair share.

If the president were really interested in creating jobs and economic growth, he would support more domestic energy production rather than punitive tax increases.

Allowing domestic producers to responsibly develop abundant energy in offshore and onshore deposits, according to a recent Wood Mackenzie study for the American Petroleum Institute, would create more than 1 million jobs nationwide; channel an estimated $800 billion in additional government revenues; and contribute 10 million more barrels of oil and natural gas per day by 2030. Opening more areas in the eastern Gulf of Mexico and along the Atlantic and Alaskan coastlines would allow companies to bring jobs back to the United States — instead of having to look abroad for investment opportunities.

Most Americans realize that additional government spending will not stimulate permanent job growth. If it did, stimulus Parts 1 and 2 would have cured our employment ills long ago.

If the administration were serious about job growth and deficit reduction, it would stand down from its “jobs” plan that would only further handicap an industry that stands ready to contribute thousands of new jobs.

Otherwise, cue the collective grumbling at the gas pump.”

Chattanooga Shale Isopach

Chattanooga production is present in Alabama...the shale plays just keep on coming.

Unconventional Resouces......Cheer

Marcellus Drilling Activity New York style

Anti-drilling hysteria

Spreading fear to halt progress

Keystone Pipeline

Obama says he’ll address Keystone Pipeline concerns

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posted at 4:05 pm on October 27, 2011 by Tina Korbe
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Barack Obama is busy, busy, scattering largesse to the populace. Whatever he can say to win votes — he’ll say it. His address in Denver yesterday included not only the announcement of his highly impactful student loan program reforms, but also a testy reassurance that he’s taking into consideration concerns about a proposed pipeline — the Keystone XL — that would run from Canada to Texas:

During an event with young people in Denver, one activist interrupted Obama’s remarks, urging the president to reject the project.
“We’re looking at it right now, all right?” Obama replied. “No decision’s been made and I know your deep concern about it, so we will address it.”
Protesters who held up a banner reading: “Stop the Keystone Pipeline Project” were asked to leave.

Obama has been none too popular with his environmentalist constituency lately — not least because he hired Broderick Johnson, a former lobbyist for the Keystone XL, to be a senior adviser to his campaign. Given that, it’s difficult to envision Obama overriding the countless anti-pipeline protesters — including a number of celebrities — to throw his weight behind the Keystone project. He’ll probably just continue to hear their concerns and delay a decision.
But consider: By the Department of Energy’s own admission, access to Canadian oil sands could significantly reduce our dependence on foreign oil. Some supporters for the pipeline have even made the case that construction and use of the pipeline is more ethical than the continued purchase of oil from a country that discriminates against women. Environmentalists insist the pipeline poses a risk to endangered species because spills could occur — but a State Department report has shown that to be unlikely. (Incidentally, in response to that report, three environmental groups sued the U.S. government this past Tuesday — another element of the Keystone drama that seems likely to push Obama to the left on this issue.) Perhaps most importantly, the pipeline will be a vehicle for the creation of thousands of jobs — the president’s purported top priority.
The only reason for Obama not to support the pipeline project is that it might cost him a few votes with lefty enviros. Oh, right. So, never mind. No wonder he’s delaying his decision.

Politics and Science Don't Mix!

I'm not picking sides on this, but it follows about how we get the right message out for the oil and gas business. At least we're not dealing with Occupy the Oil Fields.....must be too cold at Prudhoe and too hot in Saudi Arabia. That 9,000 year old joke is a million years old!

Science Words Defined

The truth is that scientists often say words that do not mean what the general public thinks they mean. And that's a problem. If you're not speaking the same language, miscommunication is inevitable. There's a new paper up in Physics Today, which argues that it's the responsibility of all scientists to think about the colloquial meanings of words and talk in a way the public can understand.

But here's the first step: Making it clear to scientists which words cause communication problems. You can see the list from the Physics Today paper above. Meanwhile, the Southern Fried Science blog has added to the collection, and Southern Fried Science blogger Andrew Thaler is looking for more suggestions. You can add words that you think scientists and public use differently to Thaler's Google Docs spreadsheet. If you've got a good alternative for a confusing word, add that, too.

Pizza Math

New York Estimated Gas Resources

New York has a long history of oil and gas exploration. From gas powered street lamps in New York City to drilling along steam beds as "rivers of oil" were believed to underlie streams and creeks! Be prepared for a call from a landman if you own lands in the red area on the map.

China Plans still a go Offshore Cuba

China-made drilling rig to be in Cuba by end of 2011

HAVANA -- A Chinese-made oil rig is on schedule to arrive off Cuba and begin drilling before the end of 2011, a spokesman for Spanish oil company Repsol YPF said.

Spokesman Kristian Rix would neither confirm nor deny recent reports of delays as the Scarabeo-9 rig travels to the Caribbean island, but he said the project has always been based on a window of time and things are still on schedule.

Repsol holds the rights to an exploration block off Cuba covering more than 1,700 square miles (nearly 4,500 square kilometers), according to its 2010 annual report. Earlier this year it signed a contract with Italy's Saipem SpA to lease the Scarabeo-9 rig for drilling operations in Cuba.

"Where we're at at the moment is we're expecting the rig to arrive in Cuba just before the end of the year, and the plan as it stands is to begin drilling before the end of the year," Rix said.

According to geologic studies conducted by several institutions, some of them U.S.-based, Cuba's reserves in the Gulf of Mexico could be 5 billion to 9 billion barrels of crude.

The Cuban government has designated dozens of blocks in Gulf waters encompassing 43,200 square miles (112,000 square kilometers) where private energy companies plan to drill deep-water test wells.

None of the companies are American, due to Washington's decades-old embargo banning most U.S. business dealings with the communist-governed island, although some U.S. firms have expressed interest in the past.

Some environmental groups, U.S. politicians and academics have expressed concerns about drilling off Cuba after last year's Deepwater Horizon disaster that killed 11 workers and spilled more than 200 million gallons of oil into the Gulf of Mexico.

Repsol's 2010 annual report says the Sacarabeo-9 complies with U.S. specifications and technical requirements. Cuban officials have also said that the safest, most modern technology will be used.

Earlier this year, Cuba reported its 2010 production totaled 4 million tons of petroleum equivalent, which is oil plus natural gas. That is about 46 percent of

Haynesville "Fairway" and IP's

The Haynesville shale is characterized by high TOC, good porosity, high gas saturation, low clay content and nanoDarcy permeabilities, all which makes for an exceptional shale gas reservoir. However, recent well IP's have been variable, and given the planned extensive development, it is necessary to de-risk some of the geologic variables to up-grade acreage and optimize well development plans. This was done through a two-part study covering the greater Sabine area of northwestern Louisiana, USA. The first part focused on defining the depositional environment, reservoir characteristics, and facies variation through inorganic element analysis, XRF, XRD, petrography, and biostratigraphic classification of macro- and nanofossils. The second focused on interpretation of present-day stresses and characterization of the natural fracture from core, image logs, and micro-seismic data. Both parts were then integrated to assist in sweet spot definition and well planning and optimization.

Results suggest that the Haynesville’s reservoir properties (clay/calcite content, TOC, perm) are mappable showing trends that can roughly be correlate with IP rates. However, on a well-to-well basis, it is unclear what the contribution of a single property is (e.g., TOC or porosity) to productivity, and hence the predictability of future well rates or location. Similarly, fracture distribution shows mappable trends. These fractures are generally calcite cemented, and hence cannot directly contribute to well productivity unless reactivated during the stimulation. Vertically, fractures occur more extensively in the lower and upper Bossier than in the Haynesville and Mid-Bossier forming a mechanically layered system.

The Haynesville Shale’s proposed or adopted drilling and production units cover 1.5 million acres. That is not including the Texas side. Considering a development spacing of 160 acres per well, that is nearly 90-95k wells, of which only 2000 are drilled.

Fairway Field, East Texas Basin: revved up with Technology

Fairway (James Lime) Field, in Henderson and Anderson counties, Texas, trapped volatile 48° oil in the Aptian age James Lime member of the Pearsall Formation. The reservoir is a large patch reef complex of varied carbonate facies that grew on a paleobathymetric high in the interior platform of the Lower Cretaceous shelf. For reservoir management purposes, the James is divided into an upper "A" zone with reef-derived skeletal grainstone and/or lagoonal facies with moldic and interparticle porosity, a "B" dense zone of non-porous reef core, and a lower "C" zone composed of uniform fine grainstone. Porosity and permeability average 12.5% and 33 mD in the "A" zone and 12.9% and <1 mD in the "C" zone, respectively, at depths of 9,800 to 10,200 ft. Total net pay averages 56 ft.

Following discovery in 1960, 157 wells were drilled on 160 acre spacing during the initial development phase. In 1963, a high pressure gas gathering system and gas plant were put into operation, and in 1965 a field-wide unit of 28,518 acres was approved, designed to conduct gas and water pressure maintenance operations. An injection project was then initiated to preserve reservoir energy and increase recovery through use of a WAG (water-alternating-gas) miscible recovery process. Additional infill drilling projects were implemented in 1971, 1980, 1991, and 2006 to optimize recovery; to date 237 wells have been drilled, including 3 recent horizontal wells targeting bypassed pay in the upper "A" and lower "C" zones. A large secondary gas saturation developed over the years as the gas recycling program was implemented. Gas sales began in 2000, and gas injection was terminated in January, 2005. OOIP in the James was calculated as 410 MMBO, of which 213 MMBO has been produced. As of Aug. 1, 2007, production was 1220 BOPD, 23,400 BWPD, 70 MMCFD, and 3360 BNGLPD. Field life is projected beyond 2015. (from Webster et al)

Noble: Offshore Israel Update

Noble-led Israeli well program nearing targets

Published: Oct 6, 2011

Offshore staff
TEL AVIV, Israel – Delek Group has issued an update on various exploration drilling programs it is participating in offshore Israel via its subsidiary Delek Drilling.

According to Noble Energy Mediterranean, operator of the Tamar I/12 lease area, the semisubmersible Transocean Sedco Express should relocate shortly to complete operations on the Leviathan 3 well in the 350/Amit license area.

Drilling of Leviathan 3 had to be suspended following technical problems with the subsea equipment used by the Pride North America rig (since re-named Ensco 5006). Once the well has been re-entered, drilling should be completed by mid-November.

Thereafter, the Transocean Sedco Express will likely drill up to two further exploratory wells before returning to the Tamar I/12 lease area for development work. The PNA drilling rig recently arrived at the Dolphin 1 well site in the 351/Chana license area, and should restart drilling operations here by early December following repairs to the rig’s riser system. Noble estimates the overall cost of this well at $55 million.

Another rig, Noble Corp’s Homer Ferrington, has completed the Noa 2 and Noa 3 offshore wells in the Noa 1/7 lease two weeks ahead of schedule and below the budgeted cost. Noble Energy expects completion work on the Noa North development project to start during the first half of 2012.

Homer Ferrington is currently engaged in exploratory drilling in block 12 off Cyprus.

Post Carbon Future?

Scientisits find "Brown Dwarfs?

Brown dwarfs straddle the boundary between stars and planets. Sometimes described as failed stars, they glow brightly when young, from the heat of formation, but cool down over time and end up with atmospheres that exhibit planet-like characteristics. Scientists think that most brown dwarfs may have formed like stars, in isolation from contracting gas clouds, but some of the puniest free-floaters may have formed like planets around a star and later ejected.

The Next Space Race

The moon may be the answer as an abundant source for nuclear energy.

The World Nuclear Association (WNA) projects possible world expansion of nuclear
generating capability from current base of 387 GWe (441 plants rated @ 880 MWe (Ave) to
1,200-3,000 GWe by 205

Noble Energy: Eastern Mediterranean Activity

 Leviathan Field is the largest discovery in Noble's history at estimated recoverable gas reserves of 16 TCF gross. See earlier post for seismic section through Leviathan. Noble has had continued success, Aphrodite is next!

Estimates of 21st Century World Energy Supplies

Antelope Sanish Field, North Dakota

The 2nd Derivative Bakken Structure Map is used to identify areas  of maximum flexure. These areas are believed to be at least one of the causes of natural fractures which enhance reservoir attributes.

Deepwater Gulf of Mexico Operators

Shell, BP, and Anadarko are the big hitters in the deepwater Gulf of Mexico.