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Alex Mills: Texas petroleum industry reverses 23 months of decline

Alex Mills: Texas petroleum industry reverses 23 months of decline Alex Mills Data from a variety of sources indicate the cycle of contraction in the oil and gas industry has reversed and demand for petroleum products is returning.  The International Energy Agency (IEA) and the Energy Information Administration (EIA) at the U.S. Energy Department both released their short-termed forecasts stating economic activity is on the rise in the U.S. and globally, and they expect increases throughout 2021. The oil and gas industry in Texas is responding with an increase in activity, according to the Texas Petro Index (TPI). Activity in the oil patch has made gains since the historic lows witnessed last year. Employment, active drilling rigs, and commodity prices all have increased. However, not every indicator shows strength. Production has not recovered and drilling permits are down, too.

Big Oil supports government price policy for carbon

Alex Mills Yes, it is true that the Biden administration will propose soon a tax increase on energy usage in the form of a carbon tax, and yes it is true that the integrated petroleum companies have agreed to support a carbon tax. A week or so ago representatives of ExxonMobil, Chevron, BP, Shell and ConocoPhillips – along with the American Petroleum Institute (API) – met with Gina McCarthy, the environmental climate adviser to President Biden, and voiced their support of a plan to reduce carbon emissions. Obviously, a carbon tax will increase the cost of energy to consumers, and increase the cost to energy producing companies. During the last session of Congress, three bills were introduced implementing a carbon tax.

Texas Upstream Benchmark Shows More Job Losses

Recent upstream job losses in the Lone Star State are worse than previously reported, according to the Texas Alliance of Energy Producers. Updated employment estimates from the Federal Reserve Bank of Dallas and the Texas Alliance of Energy Producers (the Alliance) show that upstream oil and gas industry job losses in the Lone Star State are worse than previously reported, the Alliance revealed Wednesday. “The revised employment estimates clearly suggest that COVID-19 has cut into the upstream oil and gas sector to a deeper extent than previously thought – and those numbers were bad enough to begin with,” remarked Karr Ingham, petroleum economist for the Alliance and creator of the organization’s Texas Petro Index (TPI).

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