The oil and natural gas industry supports over 9 million American jobs and supplies over 60% of the country's energy needs. In Arkansas specifically, the industry supports 76,500 jobs and contributes $6.5 billion to the state's economy. Future energy demand in the US is projected to increase 20% by 2035, which can be met through increased production of shale gas and oil from Canada. Within 15 years, oil from Canada and the US could meet all of America's liquid fuel needs. Increased production would generate hundreds of billions of dollars in government revenue and over 1 million new jobs by 2030. However, additional taxes on the oil and gas industry proposed by the President could cost the industry over $90 billion annually.
1. ENERGIZING AMERICA:
THE ROLE OF OIL AND
NATURAL GAS IN AMERICA‟S
ENERGY FUTURE
Rayola Dougher
API Senior Economic Advisor, dougherr@api.org
2. Oil & Natural Gas Industry: The
Backbone of the American Economy
Supports more than
9 million jobs
Supplies more than
60% of our energy
needs
Generates
hundreds of billions
of dollars in
government
3. Economic Impact of Oil and Natural
Gas Industry on Arkansas’ Economy
Supports 76,500
Arkansan jobs
Supports total
value added to
Arkansas’ economy
of $6.5 billion or
6.6% of GSP
6. Oil prices relate to many uncertain factors
Non-OPEC supply
growth Inventories
OPEC production Global economic
decisions growth
Global
Spare production
Oil Prices Speculation, hedging,
capacity investment
Exchange rates and
Geo-political risks
Inflation
Weather
7. What Consumers are Paying for at the
Gasoline Pump
Average of gasoline components for January – June, 2011 as reported by EIA
8.
9. First Quarter 2011 Earnings by Industry
(net income/sales)
Source: Based on company filings with the federal government as reported by U.S. Census Bureau and Oil Daily.
15. Four-fold increase in shale gas production offsets declines in other
U.S. supply, meeting consumption growth and lowering import needs
U.S. dry gas
trillion cubic feet per year
History 2009 Projections
30
1%
25 Net imports
11%
20 46%
14% Shale gas
15 20%
Non-associated onshore 8%
9% Non-associated offshore 8%
10
22%
28% Tight gas
5 7%
8% Coalbed methane
7%
2% 9% Associated with oil Alaska1%
0
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
Source: EIA, Annual Energy Outlook 2011 15
18. Canadian oil sands development a boon
to U.S. economy
For every two jobs
supported in Canada, one job
will be supported in the U.S
Canada‟s oil sands can
support 600,000 U.S. jobs by
2035.
For every US dollar spent
on Canadian exports (i.e.
crude oil) up to 90 cents is
spent on imports of US
goods and services to
Canada.
$775 billion dollars added to
our GDP over next 25 years.
20. FILLING AMERICA’S GAS TANK
Within 15 years Canada & US can provide all our liquid fuel needs
Sources of liquid
fuel supply: 2026
32% Oil from rest of world 12%
Biofuels 16%
12%
Oil from Canada
12%
US oil production 72%
45%
EIA forecast Potential
Sources: EIA; Wood Mackenzie
21. Potential Jobs and Government Revenue
Jobs Revenue
(thousands) (billions $)
Rockies 2015 = 668 2015 = $36.0
(PADD 4) Midwest 2020 = 1,139 2020 = $126.6
(PADD 2)
West 2030 = 1,404 2030 = $800.1
Coast, AK &
HI 175 235 232 East Coast
(PADD 5) (PADD 1)
81 172
45
300
84 202 $61.6 $7.5 410
$23.9 $0.6 $2.1
$7.5 354
168
$242.6 $225
267 291
196
$263.4
$42.2
$12.7
$8.4 $27.2
$31.2
$6.9
Gulf Coast
(PADD 3)
Figures may not add exactly due to rounding.
Source: Wood Mackenzie Report, “U.S. Supply Forecast and Potential Jobs and Economic Impacts (2012-2030)”, September 7, 2011
23. THE
PRESIDENT’S PLAN
Taxing success:
Taxing oil & natural gas industry
A tax of $90 billion or more on the oil &
natural gas industry
„Fairness?‟
$86 million a day in revenue from oil & gas
Oil and gas income tax rate 41.1% versus
26.5% for S&P
28. Thank You
For more information visit
www.api.org
www.energytomorrow.org
www.energycitizens.org
Notas del editor
Natural gas price projections are significantly lower than past years due to an expanded shale gas resource base. Prices were near $10 mcf in 2005 and now at around $4 mcf. EIA forecasts price of $7 mcf through 2035 with low of $5.35 and high of $9.26
Employment in the United States supported by new oil sands investments is expected to row to 465,000 jobs by 2035. For every two jobs supported in Canada, one job will be supported in the U.S. According to the Alberta government, for every US dollar spent on Canadian exports (e.e. crude oil) up to 90 cents is in fact spent on imports of US goods and services to Canada.The total economic impact over the next 25 years is estimate to reach over $521 billion dollars added to our GDP
Besides jobs and revenue, the other big takeaway from our research is the benefit for energy security. More development under reasonable regulations would substantially increase how much energy we produce at home. Add to that more imports of oil from Canada, assuming the Keystone XL and other pipelines are built – and more use of biofuels based on DOE’s projections – and you are potentially at the point where all the nation’s liquid fuels could come from secure North American and mostly U.S. sources. Oil and natural gas companies want to operate here and produce more American energy. It’s a safe business environment. Substantial quantities of energy remain to be produced. And the U.S. market is the biggest in the world. A strategy to help our economy through more oil and natural gas development would work. With the right policy changes, we could be producing more energy, creating more jobs for Americans, and generating more revenue for our government.
The President’s plan is a $450 billion proposal that includes a $90 billion or more tax increase on America’s oil and natural gas industry. No other major industry pays more in total taxes, and they pay at lower effective tax rates than the oil and natural gas industry, yet the president is proposing higher taxes on us again. A tax hike on the industry is the wrong choice. It won’t create jobs. Instead, it will slow down an industry that has a proven track record of being one of the nation’s biggest and most dependable job creators.