Over the past year, as the party in power has proposed one restrictive measure after another for the oil and gas production industry, analysts have been busy guessing how much this would cost us in foregone production and tax revenue. In an analysis featuring welcome candor, the Energy Department’s Energy Information Administration (EIA) has estimated oil and gas production in the United States with and without restrictions. By the end of the next decade (2019), restrictive permitting and tax policies will reduce the potential annual government tax take from oil and gas production by more than the total expected yield of the Obama tax program in the oil and gas sector. In the ten years to 2019, the time-frame used in the government’s tax increase proposal, restrictions and new taxes will have reduced the tax take from oil and gas production by more than $118 billion, or about 4 times the expected yield of the new taxes.…

“It will be possible to achieve a 100% clean power mix over the next ten years if appropriate policies are put in place to unleash the [zero carbon source] technologies’ vast potential.”

– Repower America (The Alliance for Climate Protection)

The heavily bankrolled climate alarmist/energy coercion lobby, led by Al Gore’s new national organization Repower America, is coming to a town or city near you!

In Houston, they have arrived. The “Repower Texas” campaign is being fronted by a group of government-dependent political capitalists that see Big Green (as in money) in Texas’s renewable energy mandates. And how did this business underclass get started? It began with the Ken Lay/Enron renewables mandate for the Lone Star State in 1999, and the policy begun by then-governor George W. Bush is being continued today by governor Rick Perry.…

If only the United States economy were as strong as ExxonMobil. If only energy realism and free-market consumer service were guiding lights in Austin, Texas; Washington, D.C.; and other seats of political power.

The good news from Exxon Mobil’s annual stockholders meeting in Dallas earlier this week is that the company is focused on its core competencies amid the energy politicization around it. No Enron political machinations here!

In fact, Exxon Mobil is the anti-Enron of corporate America, a rebuff to Ken Lay, who once worked at Exxon, and Jeff Skilling, who declared in 2000: “You will see the collapse and demise of the integrated energy companies around the world. They are going to break up into thousands and thousands of pieces.” (1)

Key Messages

The key messages of Exxon Mobil CEO Rex Tillerson were: 

1. Petroleum as a primary energy source is the future, not only the recent past.

[Editor note: Ross McCracken is editor of Platts Energy Economist]

Where support mechanisms are sufficiently generous, wind power is racing ahead. In the European Union, where supported by feed-in tariffs in countries like Germany and Spain, wind power targets are very likely to be met, if not exceeded. Last year, more wind capacity was installed in the EU than any other energy source, for the first time outstripping even natural gas.

Wind has become the “market choice” because the technology is mature, bank lending is assured where prices are guaranteed, and the supply-side has been steadily ramping up production capacity. And wind is the only viable renewable that can deliver large amounts of installed capacity in the short term.

But just because you can doesn’t mean you should. As wind penetration increases, the pricing effects become more extreme, impacting the profitability of existing baseload and peaking power plant, albeit in different ways.…