Commentary: We've Proven Tax Reform WORKS!

This morning, Alaskanomics sheds light on how much film production tax credits have helped the economy.  Here's a Peninsula Clarion story that demonstrates how five separate tax incentives have leveraged more jobs and production in the Cook Inlet Area.  With these two examples of how moderate, competitive tax policy produces good results for Alaska, one wonders why several legislators and community activists are trying so hard to repeal SB 21, the "More Alaska Production Act" designed to increase Alaska North Slope production, jobs, Trans Alaska Pipeline throughput and Alaska's economic strength!     -dh

(Ref: existing incentives)

Oil & Gas Online:  

Sixty-seven percent of voters nationwide support offshore drilling for domestic oil and natural gas resources, according to a new poll conducted by Harris Interactive for API’s “What America is Thinking on Energy Issues” series.

This support bridged party lines, with clear majorities of Republicans (79 percent), Democrats (57 percent) and Independents (67 percent) all supporting offshore drilling.

 “Americans get it: domestic oil and natural gas development is a key driver for new jobs, economic growth and energy security,” said Erik Milito, director of upstream and industry operations for API.

(Scroll down for our related editorial, yesterday.  -dh)

 

 

 

Dan Hassey

Today's Natural Gas Price Analysis From Dan Hassey, Uncommon Wisdom

The natural gas production cost currently ranges from $1.50 up to $4 per million cubic feet. When natural gas prices fell to the $2 level, producers shifted to oil and natural gas liquids.

With a glut in natural gas supplies, production is falling. One of the best ways to determine the potential supply of natural gas is to look at rig counts.

Baker Hughes (BHI) tracks the number of rigs operating all over the world. This table from its website shows the decline of rigs used for natural gas drilling:

The U.S. natural gas rig count fell by 240 rigs in the last year, a 40% decline. Notice how the number of oil rigs rose slightly since a year ago. Those are producers switching from natural gas to oil.

Now look at this natural gas price chart.

When prices hit $2.00, producers cut back on production. Then demand picked up, especially from utility companies. Prices recovered and have now doubled to the $4 area.