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Pombo pushes for lower oil fees
Julie Cart, Los Angeles Times
Tucked into a massive energy bill that would open the outer continental shelf to oil drilling are provisions that would slash future royalties owed to the federal government by companies prospecting in Rocky Mountain oil shale deposits.
Sponsored by Rep. Richard Pombo, R-Stockton, and passed by the House earlier this year, the bill would amend an existing requirement that the federal government receive a “fair return” from oil companies that hold oil shale leases on public lands. Instead, Pombo’s bill would reduce royalties from the customary 12.5 percent of annual revenue to 1 percent.
Further, the bill could cut the reduced rate by as much as 80 percent if the price of oil fell. Over many years of oil production, the royalty discounts could amount to tens of billions in lost federal receipts, said James T. Bartis, an analyst at the Rand Corp. who wrote a widely used study of the economic prospects of the developing oil shale industry.
The provision would benefit the energy industry, which is a heavy contributor to Pombo’s re-election campaign.
Pombo and others say oil companies need incentives to invest in the unproven billion-dollar technology, which squeezes oil from deep rock formations.
(15 Oct 2006)
Costs rise for Petro-Canada to refine oilsands feedstock
JUDY MONCHUK, The Canadian Press
CALGARY – Petro-Canada says the costs of converting its Edmonton refinery to handle oilsands feedstock could rise as high as $2 billion – a 25 per cent increase from its previous estimate of $1.6 billion.
The company has found it is unable to use existing furnaces and compressors in the project, senior vice-president of oilsands Neil Camarta said Tuesday.
“That was a learning error,” Camarta told reporters. “So if we’re looking to build a coker at Montreal, we have to take the same lessons there. That’s also an old refinery. We may have the same problems there.”
(4 Oct 2006)
Stranded Oil Recovery and American Energy Independence
Dave Cohen, The Oil Drum
Many efforts are being undertaken to achieve some modicum of energy independence for the United States. These generally include the corn-based ethanol craze promoted by David Morris and Vinod Khosla, among others, and more importantly, attempts to actually produce more crude oil domestically.
An important distinction I’ve repeatedly tried to make is that huge reserves numbers don’t matter much. We are interested in production flows that affect the world’s economies. See Stuart Staniford’s Do Oil Reserves Tell Us Anything? and my answer to a comment by Leo Drollas, Deputy Director and Chief Economist for the Centre for Global Energy Studies, Reserves Growth and Production Flows, for some background. Also, HO has written about stranded oil in How carbon dioxide improves recovery. In what follows, you are going to be seeing some really big resource numbers which, for the uninitiated, might be miscontrued in toto as commercially recoverable reserves. So, hold on to your hats.
(13 Oct 2006)
Contributor Dave Cohen writes:
This article examines the current energy plans to produce oil for American “energy independence” and, particularly, what we might expect to see from CO2 EOR (enhanced oil recovery) in the short to mid-term.
A rich and detailed techinical analysis. -AF
OPEC to Meet Oct. 19 in Qatar to Discuss Output Cut
Andrew Critchlow, Bloomberg
The Organization of Petroleum Exporting Countries, producer of 40 percent of the world’s oil, will hold an emergency meeting Oct. 19 to discuss a 1 million barrel-a-day output cut, an OPEC delegate said.
The group will meet in Doha, Qatar, a United Arab Emirates official who declined to be identified said in a telephone interview today. OPEC members were informed of the meeting today by the group’s acting secretary general, Nigeria’s Mohammed Barkindo, the U.A.E. official said.
Members will discuss a “voluntary” supply cut aimed at reviving oil prices that have fallen by a quarter in the last three months. The group will debate whether to reduce actual production or OPEC’s 28 million barrel-a-day output quota.
(14 Oct 2006)
