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Does fracking cause earthquakes?

admin — Wed, 16 May 2012 15:10:57 +0000

The two recent back-to-back earthquakes in Timpson, Texas had some viewers asking KSLA News 12 if the oil and natural gas activity in the area had anything to do with it.

Many people in Timpson don’t remember the last time earthquakes shook the ground in their area before last week, but there has been a history. There was a small quake in 1981, several within a few months in the mid 60′s, and even one dating back to the late 1800′s.

That history is why the Louisiana Oil and Gas Association says it doesn’t think the fracking has anything to do with the earthquakes.

“If earthquakes are caused by fracking, then were those earthquakes in the 1800′s preemptive earthquakes because they knew fracking was coming? It’s a silly comparison,” says Ragan Dickens with LOGA.

Just last month, the Interior Department Deputy Secretary, David Haynes was quoted saying,”there is no evidence to suggest that hydraulic fracturing itself is the cause of the increased rate of earthquakes.”

During the process of fracking, workers fill spaces in the ground with water and sand.

Ben McGee with the U.S. Geological Survey says while fracking may not cause the quakes, it can contribute.

“Of course you have to have a fault present to have movement along a fault, but water or fluid injected into the earth in the vicinity of faults of in faults increase the likelihood that those faults will move,” says McGee.

McGee says there may be another man made reason for the series of quakes in the 60s, too. “Probably back to when Toledo Bend and the Sam Rayburn Reservoir were being filled,” says McGee.

Mcgee says there’s a chance that East Texas could see more earthquakes in the near future, but historically quakes in the ArkLaTex are lower magnitude so they don’t cause serious damage or injury.

About Those Oil Subsidies

admin — Thu, 29 Mar 2012 15:50:35 +0000

By Randall Hoven

Everyone wants to end subsidies to oil companies, from President Obama to John Boehner and Paul Ryan. My question was “What subsidies?” Remarkably enough, CNN Money provided the answer.

It turns out that they are all tax “breaks.” I even hesitate to call them “breaks” because some of them amount to little more than Congress defining accounting terms such as “capital equipment.” And the total amount of earnings not collected in taxes (which liberals define as a “subsidy”) is about $4 billion per year. Here is how that breaks down.

Domestic manufacturing tax deduction — $1.7 B. This is a tax deduction given to every manufacturer in the US. Per CNN, it was “designed to keep factories in the United States.” If that deduction were eliminated for oil companies only, it would mean singling out oil companies from all other manufacturers.

Percentage depletion allowance — $1 B. Any industry can write down a portion of the cost of its capital equipment as part of the cost of doing business. Right now, oil in the ground is treated as capital equipment. Again, this “subsidy” amounts to how the cost of doing business is defined. All companies get it, not just oil companies.

Foreign tax credit — $850 million. Companies get credit for taxes they pay to other countries. All companies get this “subsidy,” not just oil companies. Should a company pay tax on tax? Should onlyoil companies pay tax on tax?

Intangible drilling costs — $780 million. According to CNN, “[a]ll industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.” Among these four tax “breaks,” this smallest one was the only one that treated oil companies differently.

The above tax “breaks” explain how much tax revenue is not collected from all oil companies. How much is collected?

Exxon recently released its first quarter results for 2011. The number grabbing the headlines was Exxon’s profit: $10.65 billion in a single quarter. The number not given quite as much exposure was the taxes it paid in that same quarter: $8 billion, or 42% of income before taxes.

And what does Exxon do with all that money it has left after paying $8 B in taxes? It put $7.8 billion into capital and exploration, as part of its plans “to invest between $33 billion and $37 billion per year over the next five years to develop new energy supplies.”

In any other industry, that would be called “research and development.” Exxon is plowing 73% of its after-tax profits back into R&D. Who would be better at spending $4 billion of energy companies’ earnings in an attempt to provide our energy in the future: the energy companies or Obama’s energy czar?

Do you know what oil company does get US subsidies, and not just tax “breaks”? Petrobras, Brazil’s state-owned oil company. According to the Wall Street Journal,

The U.S. is going to lend billions of dollars to Brazil’s state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil’s Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil’s planning minister confirmed that White House National Security Adviser James Jones met this month [August 2009] with Brazilian officials to talk about the loan.

Just to re-cap a few pertinent features of these “subsidies” to oil companies that Obama wants to cut.

They are all tax “breaks,” or earnings that oil companies get to keep, not money paid out from the US Treasury.
The amount of earnings not collected in taxes is about $4.3 billion per year — about 0.2% of this year’s deficit and enough to fund about 10 hours of current US government spending.
A full $3.55 billion of that amount (82%) is due to the way taxes are treated for all industries or manufacturers. To change these tax laws only for oil companies would require singling them out among all industries for special mistreatment. (I’m not a lawyer, but that sounds like a bill of attainder to me, something our Constitution forbids.)
The only tax in which the oil industry seems to get special treatment compared to other industries is intangible drilling costs. The amount of that subsidy? That would be $0.78 billion per year — enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreign-owned and state-owned oil company for drilling offshore Brazil.
Oil companies already pay tax rates of 40-50% of income. For one company, Exxon, in one quarter of one year, that amount was over $8 billion, or almost double the so-called tax “subsidy” for all oil companies for an entire year.

If you think oil companies enjoy some special privilege because of the money they throw around Washington, DC, consider that the Oil & Gas industry ranked only 19^th in the amount of money contributed to politicians in the 2008 election cycle: $17.7 million. Who was number one? Lawyers, who contributed $126.9 million, or over seven times as much as the Oil & Gas industry. The Education lobby gave $37.4 million, more than twice as much as Oil & Gas.

You might not realize it, but private oil companies don’t own much oil. Most oil in the ground, in fact 87% of the world’s supply, is owned by state-owned companies, and most of that by OPEC countries and Russia. Exxon, for example, owns only 0.68% of worldwide oil reserves. Venezuela owns 7.34%, more than 10 times as much as Exxon. What Exxon does is explore, drill, transport, refine, and distribute. It makes its money by doing things, not by sitting on capital.

According to the DOE’s Energy Information Administration, every time you fill up your gas tank, more of your money goes to taxes than goes to refining costs and profits combined.

Having said all that, go ahead and get rid of that special treatment of intangible drilling costs. Make oil companies write them down over the life of their investments, not just one year. Increase corporate taxes in the US, where corporate tax rates are already highest in the world. Collect enough money to fund the federal government for two hours.

And of course, tell your constituents you don’t kowtow to those big, bad oil companies. Unless they’re owned by Brazil.

Energy Policies of the GOP

admin — Thu, 22 Mar 2012 15:50:28 +0000

By Don Briggs
President, Louisiana Oil and Gas Association

Over the coming days, the top four Republican presidential candidates will make stops in Louisiana pleading their case of why they should become the nominee to face President Barack Obama. Each contestant has slightly different views that differentiate him from the President. As Louisianans go to the primary voting booth on March 24^th, they will have the choice to support the person they feel has views most closely connected to their own. Regarding energy, Rick Santorum, Mitt Romney, Newt Gingrich and Ron Paul each take a different approach to their energy policy, yet each of their positions have common threads.

Rick Santorum’s energy policy pushes for the removal of drilling bans on and offshore. Romney, Gingrich and Paul all agree on this issue as well- more drilling equals less dependence on foreign oil. Santorum is promoting the use of natural gas on the basis that more than half of US homes are heated by it. Senator Santorum is calling for the immediate approval of the Keystone Pipeline, which would create over 20,000 direct and indirect jobs. However, Rick Santorum is calling to end what he and President Obama call “energy subsidies”. The oil and gas industry is presently in direct opposition to President Obama on this very issue.

Governor Mitt Romney focuses on regulatory reform within the energy industry. He desires to see fixed timetables for all resource development approvals, the creation of a one-stop shop to streamline the permitting process and the implementation of fast-track procedures for companies with established safety records. Romney, like Santorum, is also in favor of the Keystone Pipeline project; he is against overregulation of the extraction of shale gas, and he is in favor of creating partnerships with other countries to assist resource developers.

Newt Gingrich is making waves amongst the candidates by campaigning for the closure of the Environmental Protection Agency (EPA). He believes the EPA to be a “job killing regulatory engine of higher energy prices”. Gingrich has made it clear that reform must take place surrounding frivolous lawsuits, or what Louisiana knows as Legacy Lawsuits. He is in favor of a “loser pay” law that forces the losing party to pay the legal fees for the other party.

Along with Speaker Gingrich, Ron Paul is pushing for the closure of the EPA. He feels that those causing pollution issues should answer to property owners in court for the problems they cause, rather than Washington DC. Paul’s energy stance calls for the repeal of the federal gasoline tax, which would save consumers 18 cents per gallon. Paul would then make tax credits available for the purchase and production of alternative fuel technologies.

While these candidates engage in an important part of the electoral process, the oil and gas industry will continue in the fight to end Legacy Lawsuits, oppose the removal of investment tax credits by the Obama Administration, and remain diligent in the US production of oil and natural gas as we move closer to becoming independent of foreign oil and their resources.

Beta Land Services Is Moving Forward Technologically

admin — Wed, 31 Aug 2011 16:04:09 +0000

Beta Land Services is rapidly moving forward technologically and geographically with the expansion of our brand. We have recently incorporated an in-house Communications Director, Ms. Mimi Rodier, to assist in developing, contributing to and supporting Beta’s mission, vision, values, and strategic goals and objectives as Beta continues to grow and expand. Mimi has several years experience in workforce development, marketing, communications, and public relations.