Archive for August, 2009
OGJ Editorial Discussing EPRINC’s Assessment of the Administration’s Tax Proposals
The Oil & Gas Journal published an editorial today which discusses EPRINC’s assessment (August 4, 2009) of the Obama Administration’s proposed taxes on the U.S. oil and gas industry:
“A new study by the Energy Policy Research Foundation Inc. (EPRINC), Washington, DC, challenges the rationale offered by the Treasury Department for tax changes that would hurt small producers and major companies alike. In fact, EPRINC says, the changes would have costly effects directly opposed to the administration’s assertions……Diminished security. Increased emissions of greenhouse gases. Net economic losses. Hampered ability of an important manufacturing industry to compete in its home market. These can’t be outcomes the administration had in mind when it proposed its first federal budget. They are very real possibilities, however, which must be taken seriously.”
The full article can be accessed at the Oil & Gas Journal’s website: Editorial: Unsound Energy Thinking
Mr. Luis Giusti Joins EPRINC’s Board of Trustees
EPRINC PRESS RELEASE
August 14, 2009
Luis Giusti, CEO of Alange Energy Corporation, a recently formed oil and gas production enterprise with assets in Columbia, has joined the Board of Trustees of the Energy Policy Research Foundation, Inc. (EPRINC). Mr. Giusti is also a senior adviser at Center for Strategic and International Studies, a member of the advisory board of Riverstone-Carlyle, and a member of the board of governors and special adviser to the chairman of the Centre for Global Energy Studies in London. Between September 2000 and September 2005 he was a non-executive director of Royal Dutch Shell. He brings a truly unique set of international petroleum expertise and experience to EPRINC.
Mr. Giusti began his career at Shell Corporation in Venezuela. In 1976, he joined Maraven, S.A., an operating affiliate of Petroleos de Venezuela, S.A. (PDVSA). At PDVSA, he held diverse positions related to exploration and production, refining, corporate planning, and marketing. In 1994 he was appointed chairman and CEO of the corporation, a job he held until March 1999. Under his leadership, the Venezuelan petroleum sector underwent major reform, which included an opening to private participation, with resulting estimated foreign direct investments of about $30 billion for the period 1995 to 2004. Over the last five years of his tenure at PDVSA, the company continued to consolidate its international downstream Read More >>>
Russian Gas to Europe, Part Deux.
(Download the PDF version of this report for full footnotes)
The recurring crisis in the shipment of Russian gas to the European continent is now moving from an annual to a monthly event. Much like a television soap opera, the theme remains the same; each crisis is followed by a resolution of all pricing and payment disagreements only to be followed by another conflict. The Russians want to be paid, the Ukrainians want some combination of higher transit fees and lower prices, and the Europeans just want assurances that the gas will be delivered. In an EPRINC assessment published in March 2009, we concluded that Gazprom, as a price-taker, had incurred substantial losses from the low oil price environment and recurring gas disputes with Ukraine, thereby, highlighting that dependence goes both ways – Russia needs the European market as much as the latter needs Russian gas.
Furthermore, we concluded that Ukraine could lose considerable economic leverage if Russia built either the Nord Stream or South Stream pipelines. While Russia is determined to charge ahead with building both pipelines, it is suffering from declining revenues from lower sales into Europe. Unless the Ukrainian transit issue is resolved, we are likely to see another cycle of payment disputes.
All three sides have a lot to gain through a long term resolution of the transit Read More >>>
Do Higher Oil and Gas Taxes Pose a Threat to U.S. Energy Security?
An EPRINC Assessment of the Administration’s Proposed Tax Policies
Regarding the Domestic Petroleum Industry
(For Footnotes Please Download the PDF Version of This Report)
Policy debates over taxes on domestic oil and natural gas operations are a recurring theme in U.S. energy policy, and changes to oil and gas taxes take place at both federal and state levels. The administration is now proposing wide ranging increases to the federal tax treatment of both upstream and downstream operations in the U.S. petroleum industry. The rationale provided for these changes, according to the Treasury Department are: (1) to eliminate the current level of “excessive” investment in domestic oil and gas operations and return the industry to a more neutral tax regime; (2) to reduce carbon emissions and encourage the use of renewable fuels; and (3) to redirect tax “subsidies” from the oil and gas sector to “more productive uses.” EPRINC’s assessment concludes that given the already high cost characteristics of oil and gas production in the United States, the proposed taxes would not achieve Treasury’s objectives and instead would result in higher imports of crude oil Read More >>>
