Greater access to public lands for producers would create an additional 530,000 jobs, deliver $150 billion more in taxes to the federal government and boost domestic production by four million bbl of oil equivalent per day (boe/d) by 2025, according to a new study commissioned by the American Petroleum Institute (API).
On the other hand, "raising taxes on the industry with no increase in access could reduce domestic production by 700,000 (boe/d) in 2020, sacrifice as many as 170,000 jobs (in 2014), and reduce revenue to the government by billions of dollars [$149 billion] annually," said the study by Edinburgh, Scotland-based Wood Mackenzie, an energy consultant firm.
With respect to increased access, the API-sponsored study assumes that the eastern Gulf of Mexico, portions of the Rocky Mountains, a small part of the Arctic National Wildlife Refuge, and the Atlantic and Pacific Outer Continental Shelf would be opened to development. The Obama administration in its proposed five-year leasing plan for 2012 to 2017 has removed these offshore areas from leasing consideration (see Daily GPI, Dec. 2, 2010).
"Closing the eastern Gulf and the Atlantic and Pacific coasts to offshore drilling and exploration -- and delaying development of Alaska -- sends job creation elsewhere, and it closes the door on economic growth," said API President Jack Gerard.
The study also assumes a $5 billion hike in annual taxes on the oil and gas industry, which is less than the amount considered last year by Congress and the Obama administration (see Daily GPI, Feb. 3, 2010).
In addition to the study, Gerard Tuesday issued a report on "The State of American Energy." Some of the highlights in 2010 were:
The situation in the Marcellus is "good news, to be sure, but it's just the tip of the opportunity iceberg, since expanding the Marcellus natural gas development could create 280,000 additional jobs and an additional $6 billion in government revenue over the next decade," Gerard said. "Similar success stories are playing out in other parts of the country like northern Louisiana, Texas, Arkansas and Colorado, where our companies are unlocking huge, new discoveries of natural gas."
The Canadian oilsands industry is also noteworthy, Gerard said. "Greater oilsands production, from a friendly, nearby neighbor like Canada, could create more than 340,000 new American jobs and economic benefits that could add up to $34 billion to our GDP [gross domestic product] by 2015," he said.
Moreover, Gerard said increased oil shale production could add as many as 100,000 new jobs, millions in tax revenues, and royalties and lease payments topping $2 billion a year.
The International Energy Outlook in 2010 projects that world energy consumption will grow nearly 50% between 2007 and 2035. And based on government projections, oil and natural gas will continue to provide more than half off total U.S. and global energy needs until 2035 and beyond, he said.
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