The American Petroleum Institute (API) released a report by Wood Mackenzie projecting the benefits from opening up the U.S. energy industry to further exploration and less regulation. The findings were dramatic.
The Wood Mackenzie study was requested by API to determine how an open energy policy would benefit the nation in this time of economic crisis. Wood Mackenzie is a noted research firm and their findings and reports are normally highly regarded.
The study examined the impacts of opening access to key U.S. regions which are currently closed to development, as well as assessing a return to historical levels of developing on existing U.S. producing areas including onshore U.S, the Gulf of Mexico and Alaska). They also looked at the threat to production, jobs and government revenues associated with a continued path of increased regulatory burdens and slower permitting relative to historical levels.
The research found that policies encouraging development of existing resources could by 2030 increase domestic oil and gas production by over 10 million BOED and support an additional 1.4 million jobs while raising over $800 billion in additional government revenue. All of that without a dollar of government stimulus.
Conversely the rapidly increasing government regulation and delay in issuing leases and drilling permits will have a dramatic increase on costs and a detrimental effect on production, jobs and government revenues.
More than 668,000 new high paying jobs could be created by 2015 and over one million jobs by 2018. Annual government revenues would increase by an additional $10 billion a year by 2015. That would continue to increase to nearly $100 billion a year by 2030.
Survey findings with shift to development policy
Increase of production over our current path
I am not going to spend a lot of time laying out all their points but I have included a link to the study below. The politicians in the U.S. (past and present) spend a lot of time talking about ending our dependence on foreign oil but nothing ever happens. In fact the reverse happens as politicians setup oil companies as the U.S. axis of evil and try to make examples of them at every opportunity. However, without those evil oil companies we would be paying significantly more for our gasoline because it would be coming from overseas.
Oil companies work on about an 8% profit margin. That is lower than any other major corporations. Exxon makes about $9 billion a quarter and that is touted as excessive by politicians. However, more than 75% of that is made overseas. Politicians neglect to mention that fact.
With the economy barely holding above recessionary levels it is imperative that our elected officials get off the oil companies are evil bandwagon and get onto the more jobs, lower gasoline prices and higher government revenue program.
The president is likely to present another $300-$400 billion spending program to stimulate hiring in his speech on Thursday night. We can't afford another stimulus program and the odds are good it won't pass the House and Senate. This will be a campaign speech more than a real shovel ready jobs program. It is really frustrating when a million "lasting" jobs could be created over the next six years and nobody is paying attention. When gasoline prices reach $4.50 again next year everyone will be wishing they had produced more oil in the USA.
API-Wood Mackenzie Research Report
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