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Oil and Gas Roundup — Dec. 9

December 09, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Oklahoman editorial: Gross production tax issue should stay settled

Based on recent comments by a Senate Republican leader, some lawmakers are itching to revisit their recent decision to set Oklahoma’s gross production tax rate at 2 percent. That would be a mistake.

For several years, the state levied a 1 percent gross production tax on horizontal wells for the first four years of operation. That rate was scheduled to expire in 2015 and increase to 7 percent. Energy producers argued, convincingly, that a 7 percent rate would curtail drilling. ... A 7 percent rate could generate $200 million less in tax revenue than the 1 percent rate, due to the associated impact on drilling.

In the end, lawmakers voted to raise the rate to 2 percent. But they also made it permanent and applied it to all wells, not just horizontal ones.

Yet in a recent article by Oklahoma Watch, Senate Finance Committee Chairman Mike Mazzei, R-Tulsa, seemed to suggest he wants to revisit the issue. Mazzei pronounced the gross production tax rate part of “the largest corporate welfare giveaway in the history of Oklahoma.” He even claimed the rate would prevent lawmakers from lowering the overall income tax rate.

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Barton to introduce bill to lift oil export ban

Rep. Joe Barton, R-Texas, is planning to introduce legislation today that would lift the United States' 40-year ban on exports of crude oil.

Barton, the House Energy and Commerce Committee's chairman emeritus, is dropping the bill ahead of a House hearing later this week focused on the country's energy boom and potential exports of domestic oil and gas.

The language in the bill would "remove all restrictions on the export of crude oil, which will provide domestic economic benefits, enhanced energy security, and flexibility in foreign diplomacy."

The measure would also require the Energy Department to report to House and Senate energy committees about the appropriate size and composition of the Strategic Petroleum Reserve.

Barton will likely push his colleagues to support the measure at a hearing Thursday before the Energy and Commerce Subcommittee on Energy and Power featuring Adam Sieminski, head of the U.S. Energy Information Administration.

The House hearing is being held to consider the Energy Policy and Conservation Act of 1975, which was written in the wake of the Arab oil embargo and resulting oil crisis two years earlier. That law was written at a time when oil and gas were considered to be in short supply and encouraged conservation through vehicle fuel efficiency standards, established the Strategic Petroleum Reserve and encouraged more domestic energy production, among other provisions.

EIA, the statistical arm of the Department of Energy, has issued a series of recent reports examining various implications of exporting liquefied natural gas and crude oil.

Energy and Commerce Chairman Fred Upton (R-Mich.) and subcommittee Chairman Ed Whitfield (R-Ky.) said in a statement that the time is "ripe" to revisit the law.

— E&E Daily

Getting the facts straight on oil & gas employee safety

The safety of employees in every industry is critically important – one fatality or injury is one too many. Over the past few years, the oil and gas industry has partnered with federal agencies, including the Occupational Safety and Health Administration (OSHA) and the Centers for Disease Control (CDC), to study workplace safety in order to ensure the safety and protection of its employees.

This sort of collaborative effort is a critical aspect of industry’s continued drive toward a goal of zero injuries in the workplace.  The result? The oil and natural gas industry has created an ever improving climate of safe and responsible operations.

This week, the BLS released its 2013 figures for non-fatal injuries in the workplace. The oil and gas extraction industry can once again claim success in decreasing its injury rates.  E&E reported on the numbers asserting, “Energy firms and utilities have once again logged rates of nonfatal occupational injuries and illnesses lower than the national average.”

The industry recognizes its work is not done until it achieves a zero rate of fatal and non-fatal injuries in the workplace. However, these facts demonstrate that it is well on its way.

The following information gives context to the industry’s robust safety record and provides clarity on some recent findings of best practices in worker safety. The details below convey the facts, much as we have done in past assessments.

It’s worth noting up front that the industry’s commitment to safety has been applauded by none other than the Chief of OSHA, who stated “This industry has stepped up to the plate” in driving down workforce injuries to levels not seen in four years.  T

his is all the more telling when one considers the massive uptick in energy exploration and development.  It is in this very context that we relay the numbers below and the conclusions that can be drawn from the occupational injury and fatality rates of recent years.

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Discredited peak oil enthusiasts make up Nature’s “experts”

This week, Nature produced an article that says counting on the abundance of the United States’ natural gas reserves is “wishful thinking” and “overly optimistic.”  Nature bases this claim on what it calls a “careful examination of the assumptions behind such bullish forecasts,” which is apparently a study by researchers who were billed as “energy experts” and “industry insiders.”

The study itself doesn’t appear to be available (if or when it is we’ll be weighing in) but regardless, there are a few important things folks need to know about the “experts” cited in Nature’s piece. First and foremost that they are, in fact, avid peak oil enthusiasts who are clearly attempting to make their work relevant in the face of all the real-world data that has consistently contradicted them.  At no point does Nature inform its readers of this crucial fact.

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EPA third on government 'most sworn-at' list

The EPA is the third-most sworn-at agency in comments submitted for proposed regulations, according to an analysis by The Washington Post.

When a government agency proposes a new regulation, it goes through a period in which anyone can write in and advocate for/complain about the idea. (More the latter, usually.) has a breadth of information related to the regulatory process, but the most colorful language comes once the public gets involved.

An important note. There were two words that The Post focused on in the analysis, one of which starts with an F and one of which starts with an S, which have been replaced below with the words "FUDGE" and "SHOOT." Not because we're prudes, but because that is funnier.

An example: Here is a comment submitted by a gentleman in Arizona.

"You Crazy FUDGErs Are Out Of Your Minds . What the FUDGE Is Wrong With You Cretinous SHOOT-Heads ? S T O P Your INSANE , G R E E D Y BEHAVIOR N O W ."

The recipient of that well-considered argument? The Animal and Plant Health Inspection Service, which you may not have ever heard of.

That the EPA comes near the top almost certainly didn't surprise you. (In fact, it was tweeted examples of EPA comments that inspired us to look at this phenomenon.)

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