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ENERGIZING AMERICA:
FACTS FOR ADDRESSING
ENERGY POLICYDrew P. Cobbs
API Eastern Region Director
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0
1
2
3
4
5
Crude Oil $2.08 Gasoline $3.36 Diesel $3.66
Dolla
rs p
er
ga
llon
Average Prices as of July 5, 2012
Changes in gasoline and diesel prices mirror
changes in crude oil prices
Sources: NYMEX (WTI crude oil) and AAA (gasoline and diesel)
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Many factors affect the price of oil, but it
comes down to supply and demand
Source: EIA
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66% 13% 11%
Crude Oil Excise
Taxes
Retailing
What Consumers are Paying for at the
Gasoline Pump(as of May 2012)
Sources: EIA, based on average May price of $3.73 per gallon
Refining
10%
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Gasoline prices can vary by state because of
the difference in state taxes
Combined Local, State and Federal Gasoline Taxes (cents per
gallon), April 2012
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Refiners produce 15 different formulations of
gasoline to meet state and local fuel standards
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U.S. refining capacity continues to expand
even as the number of refineries contracts
Source: EIA, Petroleum Supply Annual
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Net Imports of Total Petroleum
Products
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
Ma
r-93
Ma
r-94
Ma
r-95
Ma
r-96
Ma
r-97
Ma
r-98
Ma
r-99
Ma
r-00
Ma
r-01
Ma
r-02
Ma
r-03
Ma
r-04
Ma
r-05
Ma
r-06
Ma
r-07
Ma
r-08
Ma
r-09
Ma
r-10
Ma
r-11
Ma
r-12
Mo
nth
ly T
ho
usa
nds B
arr
els
pe
r
Source: EIA
Last year the U.S. became a net exporter of
petroleum products for the first time since
1949
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Refineries face tsunami of EPA regulations
Cellulosic Mandate
E-10 “Blend Wall”
E15 Partial Waiver
Tier 3 proposal
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1980 1990 2000 2010 2020 2030 2035
43.8%
25.9%
19.7%
3.5%3.7%
3.3%
36.8%
25.2%
21.1%
8.6%5.5%
2.6%
31.5%
25.1%
20.0%
8.7%
11.7%
2.8%
OIL
Natural
Coal
NuclearBiomass &
Hydroelectric
The U.S. will require 10% more energy in 2035
than in 2010 with more than half of it to be met by
oil and gas
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U.S. oil and natural gas production is
increasing as a result of technological
innovation
U.S. Crude Oil Production(Thousands of barrels per day)
U.S. Natural Gas Production
(Dry)(trillion cubic feet)
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
10
12
14
16
18
20
22
24
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Source: Energy Information Administration
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Shale plays are widely dispersed across the U.S.
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Shale gas production is offsetting declines in
other U.S. natural gas sources
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Ultimately recoverable oil resources dwarf
current proven reserves
Source: CRS, “U.S. Fossil Fuel Resources: Terminology, Reporting, and Summary,” March 25, 2011
Resource
Pyramid for
U.S. Oil
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Offshore Undiscovered Technically Recoverable Federal Oil (Bbl) and Natural Gas (Tcf)
Resources
87% of federal offshore acreage is off
limits to development
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How many leases do I need to ensure a 90
percent change of making a discovery?
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Development of Canadian oil sands would
benefit the 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.
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FILLING AMERICA’S GAS TANKWithin 12 years Canada & U.S. can provide all our liquid fuel needs
Oil from rest of world
Biofuels
Oil from Canada
US oil production
24%
10%
13%
53%
10%
18%
72%
EIA forecast Potential
Sources: EIA; Wood Mackenzie
Sources of liquid
fuel supply: 2024
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Lost capital investment from rig movements
outside of the U.S. Gulf of Mexico
$21.4 billion in
investments
lost
91,000 jobs
lost
Gulf
production
down more than
21% in 2012
over 2010.
Estimated $5
billion in lost
government
revenue
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Oil and natural gas production are down on
federal lands and waters
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Where is the commitment to American-made
energy?
Permitting slowdowns in the Gulf of Mexico
and in western states
A five-year plans that raises royalty rates
and places most of our offshore resources
off-limits
Ten federal agencies now regulating or
considering regulations on hydraulic
fracturing
Denying the Keystone pipeline development
Proposed additional taxes of $85 billion or
more
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3.03.53.84.24.9
6.77.58.18.98.9
11.114.8
19.622.5
33
Iron & SteelTextiles
FurnitureFood
Motor VehiclesAerospace
Oil and Natural GasApparel & LeatherAll Manufacturing
MachineryElectrical Equipment
ChemicalsBeverages & Tobacco
PharmaceuticalsComputers
Oil and natural gas earnings are typically in line
with the average for other major U.S. manufacturing
industries
Source: Based on company filings with the federal government as reported by U.S. Census Bureau and Standard & Poor’s Research Insight.
First Quarter 2012 Earnings by Industry (net
income/sales)
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Who owns U.S. oil and natural gas
companies? Answer: tens of millions of
Americans
Pension
Funds
Source: Who Owns America’s Oil and Natural Gas Companies, SONECON, October 2011
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40.6%
25.1%
Oil and Natural Gas CompaniesS& P Industrials Excluding Oil and Natual Gas Companies
Income Tax Expenses as a Share of Net Income before Income
Taxes(2011)
Source: Compustat North America Database, April 2011 update.
The oil and natural gas industry is one of the
most heavily taxed industries in America
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The oil and gas industry’s high effective tax rate
is a function of the nature of the business
Source: S&P Research Insight; S&P 1500 GICS Industry Code
Effective Tax Rates Among Industries (Averaged over 2006-2011)
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Harris Poll Results on Increased U.S. Oil and Natural Gas
Development
87%83% 82%
72%
Lead to more American jobsReduce energy costsIncrease energy securityDeliver more revenue to government
Source: Harris Interactive telephone poll, January 2012
A large majority of Americans support
increased domestic oil and natural gas
development
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For more information visit:
www.api.org
www.energytomorrow.org
www.energycitizens.org
www.vote4energy.org
Thank You