Live Commodities
Live Commodities
Symbol (CFDs)
Month
Last
Prev.
High
Low
Chg.
Chg. %
Time
Dec 24
75.12
75.30
75.70
74.87
-0.20
-0.27%
17:46:38 | Energy
Nov 24
71.86
74.78
75.08
71.81
-3.70
-4.90%
16:59:58 | Energy
Nov 24
2.479
2.606
2.625
2.476
-0.153
-5.81%
16:59:58 | Energy

FEDERAL ISSUES

Even though states have been granted primacy over many regulatory issues, the federal government continues to be the originator of numerous policies impacting TIPRO members. With the oil and gas industry heavily regulated by the U.S. Congress and federal agencies such as the U.S. Environmental Protection Agency, U.S. Fish & Wildlife Service and the Bureau of Land Management, among others, federal regulations can have a significant impact on how the industry is able to operate. 

TIPRO federal priorities include:

  • – Opposing federal tariffs against imported steel and aluminum products;
  • – Supporting the United States-Mexico-Canada Agreement (USMCA);
  • – Supporting sensible, science-based energy emissions policies;
  • – Maintaining tax policies that support domestic oil and natural gas production; and
  • – The overhaul of the Endangered Species Act.

Find additional information below on TIPRO’s key objectives on the federal level.

Federal tariffs against imported steel and aluminum products


Steel and aluminum products are an essential piece of oil and gas production. From drilling and exploration operations to the pipelines transporting those products to the refineries downstream, every stage of this industry relies on steel and aluminum in some capacity. Unfortunately, these products are often so specialized that they are either not manufactured domestically, or carry such an inflated cost that domestically produced items are not economically viable, heavily impacting the bottom line for independent operators and reducing potential royalty amounts.

 

While the Trump Administration has made several beneficial decisions to positively impact the oil and gas industry and members of TIPRO, the new tariff policy threatens to negate the other valuable efforts they have made in recent years. TIPRO supports any agenda that is focused on energy dominance, but is always in favor of allowing free markets to guide the economics of our country. Protectionist policies such as tariffs impact everyone, but none so much as the small business owners that TIPRO was created to serve.

 

Resources:

 

United States-Mexico-Canada Agreement (USMCA)


The North American Free Trade Agreement, or NAFTA, has been a crucial component for the success of many industries in the U.S. and the oil and natural gas industry is no exception. Although Congress has recently lifted the ban on crude oil exports, allowing for a new era of growth and opportunity in this country, the level of energy security and dominance that we have experienced in North America due to the integrated market with Canada and Mexico is undeniable. TIPRO continues to engage in any policy changes to this agreement to safeguard our membership from detrimental impacts.

Resources:

Energy emissions


One of the most heavily regulated aspects of oil and gas production is environmental protection, especially as it relates to air emissions. Producers across this state and nation maintain a high vigilance when it comes to any potential impacts from their operations, and often go above and beyond to ensure compliance with environmental regulations. TIPRO understands the need for reasonable regulations, but strives to maintain a balance between having effective regulation on the industry with increasingly burdensome rules and enforcements that depress economic opportunity.

Favorable tax policies supporting domestic oil and natural gas production


While there are many regulations that can hinder the success of an industry like oil and natural gas, even the most minimal tweaks to the tax code in the United States can have immediate detrimental and long-lasting effects. Thanks to the continued efforts from groups like TIPRO and our engaged membership, the current atmosphere of tax policy has been beneficial for the industry, although there are always opportunities to do more. Two of TIPRO’s main areas of concern have been maintaining the Intangible Drilling Costs (IDC) and Percentage Depletion provisions.

 

Intangible Drilling Costs have been a part of the tax code since 1913. This tax provision allows a deduction of costs associated with exploration and production activities and non-salvageable equipment as current expense rather than depreciating over the life of the project or well. Large integrated companies cannot fully utilize this deduction; consequently, the elimination of this tax treatment would have a more substantial impact on small companies that produce the majority of America’s domestic energy.

 

Meanwhile, Percentage Depletion deductions have been in place since 1926. This deduction was passed to encourage high-risk ventures for exploration and development of American oil and gas reserves. It is only available to small producers and allows a deduction of 15 percent of their gross income from oil and gas production. This tax incentive is not available to large companies that process more than 50,000 barrels of oil per day, own more than 1,000 barrels per day of crude oil production, or own more than 6,000,000 cubic feet per day of average gas production. Elimination of depletion allowances will remove capital that would otherwise be invested in maintaining and developing American production by smaller producers.

 

Overhaul of the Endangered Species Act


The Endangered Species Act (ESA), passed into law in 1973 and last renewed by Congress in 1988, was originally designed to protect plant and animal species facing a risk of extinction. During that time, only 54 of the 2,493 species listed as threatened or endangered recovered to the point where they were de-listed — that’s just over 2 percent success in de-listing. In the meantime, the ESA has morphed into a highly litigious process allowing opponents of our industry to impede oil and natural gas production and destroy the economic growth and job creation it provides.

 

TIPRO supports common sense adjustments to the species review process established by the ESA to create a quantifiable, scientifically-backed review process that will operate independent of political agendas and will more accurately identify and protect species truly in danger of extinction.

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