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This month, the U.S. Court of Appeals for the Tenth Circuit ruled not to grant the Sierra Club, Clean Energy Future Oklahoma, and the East Texas Sub Regional Planning Commission a temporary injunction to stop the construction of the Gulf Coast pipeline, the southern extension of Transcanada's Keystone XL tar sands export pipeline. In October 2011, the Sierra Club, Clean Energy Future of Oklahoma, and the East Texas Sub Regional Planning Commission sued the Army Corps of Engineers for approving construction of the pipeline, which is to run from Cushing, OK, to the Gulf Coast. According to multiple sources, the expansion of the southern leg of the Keystone XL is set to begin on November 1, 2013.
Sources: TransCanada, Reuters, U.S. Court of Appeals for the Tenth Circuit, Biological Diversity Organization
On October 1, the Senate Committee on Energy and Natural Resources held a hearing to discuss proposed energy legislation. The legislation in question would approve an agreement between the U.S. and Mexico to develop oil and gas reserves that cross the international maritime boundary in the Gulf of Mexico. Witnesses and committee members discussed the United States’ goals of energy independence, as well as prospective jobs and safety standards proposed by the hydrocarbon agreement. For more information, please read the hearing summary located on the AGI website.
Sources: Senate Committee on Energy and Natural Resources
PIRA Energy Group, a New York energy market consultancy, released a report this October indicating that the U.S. has surpassed Russia and Saudi Arabia to become the world’s largest producer of oil in 2013. The report’s total oil supply includes all forms of liquid oil supply. The report revealed that the U.S. total supply for 2013 is expected to average 12.1 million barrels per day (MMB/D). The U.S. surpassed Russia to become the second largest global supplier of oil in 2012, and this year U.S. production grew at a faster pace than Saudi Arabia’s.
Total supply in 2013 for the U.S. is larger than that of Saudi Arabia by 0.3 MMB/D and ahead of Russia by 1.6 MMB/D. PIRA’s report claims that the U.S.’s position as the world’s largest oil supplier looks secure for many years to come. The growth in shale oil has boosted the U.S.’s oil supply significantly. Shale oil now accounts for slightly over one-third of total U.S. crude production.
Sources: PIRA Energy Group
House Ways and Means Committee Chairman Dave Camp (R-MI) has acknowledged that tax credits normally enjoyed by the oil and gas industry are not off the table when it comes to overhauling the United States’ tax code. In an effort to balance the budget and reinvigorate the economy, lawmakers are looking to reform the tax code, which currently sets the majority of corporate tax rates at approximately 40 percent and marginal federal corporate income tax rates at 35 percent. Chairman Camp and other members of Congress hope to lower the corporate tax rate to around 25 percent; however, in order to do so they are setting their sights on limiting targeted tax breaks for companies, including the oil and gas industry.
Among other benefits, the oil and gas industry can currently deduct “intangible drilling costs” (IDCs), as well as deductions from being classified as “manufacturers” when filing taxes.
Sources: E&E News, KPMG Global