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U.S. Offshore Oil and Gas Resources: Prospects and Processes [May 4, 2011]
"Access to potential oil and gas resources under the U.S. Outer Continental Shelf (OCS) continues to be controversial. Moratoria on leasing and development in certain areas were largely eliminated in 2008 and 2009, although a few areas remain legislatively off limits to leasing. The 112th Congress may be unlikely to reinstate broad leasing moratoria, but some Members have expressed interest in protecting areas (e.g., the Georges Bank or Northern California) or establishing protective coastal buffers. Pressure to expand oil and gas supplies and protect coastal environments and communities will likely lead Congress and the Administration to consider carefully which areas to keep open to leasing and which to protect from development. [...] The oil spill that occurred on April 20, 2010, in the Gulf of Mexico brought increased attention to offshore drilling risks. Consideration of offshore development for any purpose has raised concerns over the protection of the marine and coastal environment. In addition to the oil spill, historical events associated with offshore oil production, such as the large oil spill off the coast of Santa Barbara, CA, in 1969, cause both opponents and proponents of offshore development to consider the risks and to weigh those risks against the economic and social benefits of the development."
Library of Congress. Congressional Research Service
Humphries, Marc; Pirog, Robert L.; Whitney, Gene
2011-05-04
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U.S. Rail Transportation of Crude Oil: Background and Issues for Congress [May 5, 2014]
"North America is experiencing a boom in crude oil supply, primarily due to growing production in the Canadian oil sands and the recent expansion of shale oil production from the Bakken fields in North Dakota and Montana as well as the Eagle Ford and Permian Basins in Texas. Taken together, these new supplies are fundamentally changing the U.S. oil supply-demand balance. The United States now meets 66% of its crude oil demand from production in North America, displacing imports from overseas and positioning the United States to have excess oil and refined products supplies in some regions. The rapid expansion of North American oil production has led to significant challenges in transporting crudes efficiently and safely to domestic markets--principally refineries--using the nation's legacy pipeline infrastructure. In the face of continued uncertainty about the prospects for additional pipeline capacity, and as a quicker, more flexible alternative to new pipeline projects, North American crude oil producers are increasingly turning to rail as a means of transporting crude supplies to U.S. markets. According to rail industry officials, U.S. freight railroads are estimated to have carried 434,000 carloads of crude oil in 2013 (roughly equivalent to 300 million barrels), compared to 9,500 carloads in 2008. In 2014, 650,000 carloads of crude oil are expected to be carried. Crude imports by rail from Canada have increased more than 20-fold since 2011. The amount of oil transported by rail may also be influenced by a tight market for U.S.-built tankers."
Library of Congress. Congressional Research Service
Frittelli, John; Parfomak, Paul W.; Ramseur, Jonathan L. . . .
2014-05-05
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U.S. Offshore Oil and Gas Resources: Prospects and Processes [June 30, 2011]
"Access to potential oil and gas resources under the U.S. Outer Continental Shelf (OCS) continues to be controversial. Moratoria on leasing and development in certain areas were largely eliminated in 2008 and 2009, although a few areas remain legislatively off limits to leasing. The 112th Congress may be unlikely to reinstate broad leasing moratoria, but some Members have expressed interest in protecting areas (e.g., the Georges Bank or Northern California) or establishing protective coastal buffers. Pressure to expand oil and gas supplies and protect coastal environments and communities will likely lead Congress and the Administration to consider carefully which areas to keep open to leasing and which to protect from development. The oil spill that occurred on April 20, 2010, in the Gulf of Mexico brought increased attention to offshore drilling risks. Consideration of offshore development for any purpose has raised concerns over the protection of the marine and coastal environment. In addition to the oil spill, historical events associated with offshore oil production, such as the large oil spill off the coast of Santa Barbara, CA, in 1969, cause both opponents and proponents of offshore development to consider the risks and to weigh those risks against the economic and social benefits of the development. […] The ultimate impact of oil and gas development in offshore areas will depend on oil and gas prices, volumes of resources actually discovered, infrastructure development, and restrictions placed on development, all of which currently carry significant uncertainties."
Library of Congress. Congressional Research Service
Humphries, Marc; Pirog, Robert L.; Whitney, Gene
2011-06-30
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U.S. Offshore Oil and Gas Resources: Prospects and Processes [February 10, 2012]
"Access to potential oil and gas resources under the U.S. Outer Continental Shelf (OCS) continues to be controversial. Moratoria on leasing and development in certain areas were largely eliminated in 2008 and 2009, although a few areas remain legislatively off limits to leasing. The 112th Congress may be unlikely to reinstate broad leasing moratoria, but some Members have expressed interest in protecting areas (e.g., the Georges Bank or Northern California) or establishing protective coastal buffers. Pressure to expand oil and gas supplies and protect coastal environments and communities will likely lead Congress and the Administration to consider carefully which areas to keep open to leasing and which to protect from development. The oil spill that occurred on April 20, 2010, in the Gulf of Mexico brought increased attention to offshore drilling risks. Consideration of offshore development for any purpose has raised concerns over the protection of the marine and coastal environment. […] On December 14, 2011, the Obama Administration held lease sale 218 in the Western Gulf of Mexico, the first sale since the oil spill. A combined lease sale in the Central Gulf of Mexico (sale 216 and 222) is scheduled for June 20, 2012, the final sale of the 2007-2012 leasing program. […] The ultimate impact of oil and gas development in offshore areas will depend on oil and gas prices, volumes of resources actually discovered, infrastructure development, and restrictions placed on development, all of which currently carry significant uncertainties."
Library of Congress. Congressional Research Service
Pirog, Robert L.; Humphries, Marc
2012-02-10
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U.S. Rail Transportation of Crude Oil: Background and Issues for Congress [February 6, 2014]
"The rapid expansion of North American oil production has led to significant challenges in transporting crudes efficiently and safely to domestic markets--principally refineries--using the nation's legacy pipeline infrastructure. In the face of continued uncertainty about the prospects for additional pipeline capacity, and as a quicker, more flexible alternative to new pipeline projects, North American crude oil producers are increasingly turning to rail as a means of transporting crude supplies to U.S. markets. According to rail industry officials, U.S. freight railroads are estimated to have carried more than 400,000 carloads of crude oil in 2013 (roughly equivalent to 280 million barrels), compared to 9,500 carloads in 2008. Crude imports by rail from Canada have increased more than 20-fold since 2011. While oil by rail has demonstrated benefits with respect to the efficient movement of oil from producing regions to market hubs, it has also raised significant concerns about transportation safety and potential impacts to the environment. […] Legislation introduced in Congress following the Lac Mégantic disaster would require railroads to have at least two crew members aboard all trains. In addition, policymakers are discussing regulatory changes involving tank car design, prevention of derailments, and selection of preferred routes for transporting oil by rail."
Library of Congress. Congressional Research Service
Frittelli, John; Parfomak, Paul W.; Ramseur, Jonathan L. . . .
2014-02-06
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U.S. Rail Transportation of Crude Oil: Background and Issues for Congress [December 4, 2014]
"The United States now meets 66% of its crude oil demand from production in North America, displacing imports from overseas and positioning the United States to have excess oil and refined products supplies in some regions. The rapid expansion of North American oil production has led to significant challenges in transporting crudes efficiently and safely to domestic markets--principally refineries--using the nation's legacy pipeline infrastructure. In the face of continued uncertainty about the prospects for additional pipeline capacity, and as a quicker, more flexible alternative to new pipeline projects, North American crude oil producers are increasingly turning to rail as a means of transporting crude supplies to U.S. markets. Railroads are more willing to enter into shorter-term contracts with shippers than pipelines, offering more flexibility in a volatile oil market. […] While oil by rail has demonstrated benefits with respect to the efficient movement of oil from producing regions to market hubs, it has also raised significant concerns about transportation safety and potential impacts to the environment. The most recent data available indicate that railroads consistently spill less crude oil per ton-mile transported than other modes of land transportation. Nonetheless, safety and environmental concerns have been underscored by a series of major accidents across North America involving crude oil transportation by rail […] Legislation introduced in Congress following the Lac Mégantic disaster would require railroads to have at least two crew members aboard all trains. In addition, policy makers are proposing regulatory changes involving tank car design, prevention of derailments, and selection of preferred routes for transporting oil by rail. Congress may evaluate these changes in the reauthorization of the Rail Safety Improvement Act of 2008 (P.L. 110-432)."
Library of Congress. Congressional Research Service
Frittelli, John; Andrews, Anthony; Parfomak, Paul W. . . .
2014-12-04
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Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy [April 2, 2012]
"Congress authorized the Strategic Petroleum Reserve (SPR) in the 1975 Energy Policy and Conservation Act (EPCA) to help prevent a repetition of the economic disruption caused by the 1973-1974 Arab oil embargo. EPCA specifically authorizes the President to draw down the SPR upon a finding that there is a 'severe energy supply interruption.' The meaning of a 'severe energy supply interruption' has been controversial. The authors of EPCA intended the SPR only to ameliorate discernible physical shortages of crude oil. Historically, increasing crude oil prices typically signal market concerns for supply availability. However, Congress deliberately kept price trigger considerations out of the President's SPR drawdown authority because of the question about what price level should trigger a drawdown, and the concern that a price threshold could influence market behavior and industry inventory practices. International Energy Agency member countries (which include the United States) have committed to maintaining emergency reserves equal to 90 days of net crude oil imports, developing programs for demand restraint in the event of emergencies, and agreeing to participate in allocation of oil deliveries among the signatory nations to balance a shortage. The Department of Energy (DOE) manages the SPR, comprised of five underground storage facilities, solution-mined from naturally occurring salt domes in Texas and Louisiana. The 2005 Energy Policy Act authorized SPR expansion to a capacity of 1 billion barrels, but physical capacity expansion of the SPR has not proceeded beyond 726.6 million barrels. The SPR's maximum drawdown capacity is 4.4 million barrels per day, based on the capacity of the pipelines and marine terminals that serve it. Legislation restricts SPR sales to no more than 30 million barrels over a 60-day period for anything less than a severe energy supply interruption."
Library of Congress. Congressional Research Service
Andrews, Anthony; Pirog, Robert L.
2012-04-02
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Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy [August 27, 2013]
"Congress authorized the Strategic Petroleum Reserve (SPR) in the Energy Policy and Conservation Act (EPCA) of 1975 to help prevent a repetition of the economic disruption caused by the 1973-1974 Arab oil embargo. EPCA specifically authorizes the President to draw down the SPR upon a finding that there is a 'severe energy supply interruption.' The meaning of a 'severe energy supply interruption' has been controversial. The authors of EPCA intended the SPR only to ameliorate discernible physical shortages of crude oil. Historically, increasing crude oil prices typically signal market concerns for supply availability. However, Congress deliberately kept price trigger considerations out of the President's SPR drawdown authority because of the question about what price level should trigger a drawdown, and the concern that a price threshold could influence market behavior and industry inventory practices. As a member of the International Energy Agency--a coalition of 28 countries--the United States agrees to support energy supply security through energy policy cooperation, commit to maintaining emergency reserves equal to 90 days of net petroleum oil imports, develop programs for demand restraint in the event of emergencies, and participate in allocation of oil deliveries among the signatory nations to balance a shortage."
Library of Congress. Congressional Research Service
Andrews, Anthony; Pirog, Robert L.
2013-08-27
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Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy [April 25, 2012]
"Congress authorized the Strategic Petroleum Reserve (SPR) in the Energy Policy and Conservation Act (EPCA) of 1975 to help prevent a repetition of the economic disruption caused by the 1973-1974 Arab oil embargo. EPCA specifically authorizes the President to draw down the SPR upon a finding that there is a 'severe energy supply interruption.' The meaning of a 'severe energy supply interruption' has been controversial. The authors of EPCA intended the SPR only to ameliorate discernible physical shortages of crude oil. Historically, increasing crude oil prices typically signal market concerns for supply availability. However, Congress deliberately kept price trigger considerations out of the President's SPR drawdown authority because of the question about what price level should trigger a drawdown, and the concern that a price threshold could influence market behavior and industry inventory practices. As a member of the International Energy Agency-a coalition of 28 countries-the United States agrees to support energy supply security through energy policy cooperation, commit to maintaining emergency reserves equal to 90 days of net petroleum oil imports, develop programs for demand restraint in the event of emergencies, and participate in allocation of oil deliveries among the signatory nations to balance a shortage. […] The 30.64 million barrel SPR sale in 2011 reduced the SPR's inventory from 726.6 million barrels to 695.9 million barrels. The SPR currently holds the equivalent of 80 days of import protection (based on 2012 data of 8.72 million barrels per day of net petroleum imports)."
Library of Congress. Congressional Research Service
Andrews, Anthony; Pirog, Robert L.
2012-04-25
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Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy [June 18, 2012]
"Congress authorized the Strategic Petroleum Reserve (SPR) in the Energy Policy and Conservation Act (EPCA) of 1975 to help prevent a repetition of the economic disruption caused by the 1973-1974 Arab oil embargo. EPCA specifically authorizes the President to draw down the SPR upon a finding that there is a 'severe energy supply interruption.' The meaning of a 'severe energy supply interruption' has been controversial. The authors of EPCA intended the SPR only to ameliorate discernible physical shortages of crude oil. Historically, increasing crude oil prices typically signal market concerns for supply availability. However, Congress deliberately kept price trigger considerations out of the President's SPR drawdown authority because of the question about what price level should trigger a drawdown, and the concern that a price threshold could influence market behavior and industry inventory practices. As a member of the International Energy Agency--a coalition of 28 countries--the United States agrees to support energy supply security through energy policy cooperation, commit to maintaining emergency reserves equal to 90 days of net petroleum oil imports, develop programs for demand restraint in the event of emergencies, and participate in allocation of oil deliveries among the signatory nations to balance a shortage."
Library of Congress. Congressional Research Service
Andrews, Anthony; Pirog, Robert L.
2012-06-18
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Strategic Petroleum Reserve: Mandated Sales and Reform [Updated October 1, 2019]
From the Summary: "The Strategic Petroleum Reserve (SPR), administered by the Department of Energy (DOE), has played a role in U.S. energy policy for over 40 years. Over that time, its primary focus has changed from its original intent as world oil market conditions have changed. Originally intended to offset the market power of cartels and prevent economic damage from oil supply disruption, it has become primarily a tool for combatting the fuel market effects of domestic natural disasters like hurricanes. Most recently, U.S. net imports of oil and petroleum products have decreased as a result of the increase in domestic oil production. Because of lower reliance on imports, some stakeholders see less need for an oil stockpile, and view the SPR more as a mechanism for providing funding for a wide variety of legislative purposes, ranging from health care, to highways, and general purpose revenues. Over this period, the SPR has expanded its potential usefulness to cover all of these purposes."
Library of Congress. Congressional Research Service
Pirog, Robert L.
2019-10-01
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Strategic Petroleum Reserve: Mandated Sales and Reform [Updated April 16, 2019]
From the Introduction: "The Strategic Petroleum Reserve (SPR), administered by the Department of Energy (DOE), has been a part of U.S. oil security policy for over 40 years. Originally intended as a reserve to replace oil that might be withdrawn from the world market to forward political purposes and objectives, its rationale has evolved with the changing world oil market and the role of the United States in the market. In addition to replacing oil lost to political turmoil, as in Libya in 2011, in recent years it has been more commonly used to replace oil supplies curtailed due to natural disasters, mainly hurricanes. The effects of hurricanes, especially those of the magnitude of Katrina, Rita, and others, has threatened to disrupt oil production, refining, and distribution, creating potential economic dislocation. Use of oil from the SPR has helped to minimize the economic effect of those events. [...] This report addresses the questions of mandated sales and 'right sizing' the SPR, as well as strategies to make optimal use of the reduced need for oil storage capacity."
Library of Congress. Congressional Research Service
Pirog, Robert L.
2019-04-16
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Strategic Petroleum Reserve: Mandated Sales and Reform [Updated July 24, 2019]
From the Introduction: "The Strategic Petroleum Reserve (SPR), administered by the Department of Energy (DOE), has been a part of U.S. oil security policy for over 40 years. Originally intended as a reserve to replace oil that might be withdrawn from the world market to forward political purposes and objectives, its rationale has evolved with the changing world oil market and the role of the United States in the market. In addition to replacing oil lost to political turmoil, as in Libya in 2011, in recent years it has been more commonly used to replace oil supplies curtailed due to natural disasters, mainly hurricanes. The effects of hurricanes, especially those of the magnitude of Katrina, Rita, and others, has threatened to disrupt oil production, refining, and distribution, creating potential economic dislocation. Use of oil from the SPR has helped to minimize the economic effect of those events."
Library of Congress. Congressional Research Service
Pirog, Robert L.
2019-07-24
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Strategic Petroleum Reserve: Mandated Sales and Reform [March 8, 2019]
From the Document: "The Strategic Petroleum Reserve (SPR), administered by the Department of Energy (DOE), has played a role in U.S. energy policy for over 40 years. Over that time, its primary focus has changed from its original intent as world oil market conditions have changed. Originally intended to offset the market power of cartels and prevent economic damage from oil supply disruption, it has become primarily a tool for combatting the fuel market effects of domestic natural disasters like hurricanes. Most recently, U.S. net imports of oil and petroleum products have decreased as a result of the increase in domestic oil production. Because of lower reliance on imports, some stakeholders see less need for an oil stockpile, and view the SPR more as a mechanism for providing funding for a wide variety of legislative purposes, ranging from health care, to highways, and general purpose revenues. Over this period, the SPR has expanded its potential usefulness to cover all of these purposes."
Library of Congress. Congressional Research Service
Pirog, Robert L.
2019-03-08
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Winter Fuels Outlook 2010-2011 [October 29, 2010]
"The Energy Information Administration (EIA) in its Short-Term Energy and Winter Fuels Outlook (STEWFO) for the 2010-2011 winter heating season projects that American consumers should expect to see heating expenditures rise by 2.5% on average compared to last winter. Average expenditures for those heating with natural gas are projected to see an increase of 3.6%, while those heating with electricity are projected to see a decline in expenditures of 1.9%. These two fuels account for the heating for approximately 88% of all U.S. households. Propane and home heating oil consumers are projected to see cost increases of 7.5% and 11.5%, respectively. Within the U.S. average projections, differences exist with respect to region of the country and type of fuel. Economic conditions of slow growth and high unemployment suggest that lower consumption of all fuels is likely, especially in the context of milder winter weather conditions that have been forecast by the National Oceanic and Atmospheric Administration (NOAA). The price of oil has been increasing in the months leading up to the 2010-2011 winter heating season. If the price of oil continues to increase beyond the projected level of $85 per barrel, heating costs might be expected to rise above projected levels for all consumers."
Library of Congress. Congressional Research Service
Pirog, Robert L.; Yim, Eugene
2010-10-29
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Winter Fuels Outlook 2017-2018 [December 5, 2017]
"The Energy Information Administration (EIA), in its 'Short-Term Energy and Winter Fuels Outlook' (STEWFO) for the 2017-2018 winter heating season, projects that American consumers should expect to see heating expenditures that will be higher than last winter. However, the winter of 2016-2017 was relatively warm. Average expenditures for those heating with natural gas are projected to increase by 12%, while those heating with electricity are projected to see an increase of about 8%. These two fuels serve as the heating source for about 87% of all U.S. household heating. Propane and home heating oil consumers are also projected to see increased costs. Within the United States, average expenditures projections differences exist with respect to region of the country. Differences in weather conditions and fuel prices contribute to differing regional expenditures."
Library of Congress. Congressional Research Service
Pirog, Robert L.; Yim, Eugene
2017-12-05
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Winter Fuels Outlook 2013-2014 [December 18, 2013]
"The Energy Information Administration (EIA), in its 'Short-Term Energy and Winter Fuels Outlook' (STEWFO) for the 2013-2014 winter heating season, projects that American consumers should expect to see heating expenditures that on average will be somewhat higher than last winter. Average expenditures for those heating with natural gas are projected to increase by 13.4%, while those heating with electricity are projected to see an increase in expenditures of about 2.1%. These two fuels serve as the heating source for about 89% of all U.S. household heating. Propane and home heating oil consumers are also projected to see increased and decreased expenditures, respectively. […] While the price of natural gas is expected to increase, the price of oil has been relatively high over the past year. If the price of oil spikes for an extended amount of time, or if the price of natural gas increases more than projected, heating costs might be expected to rise above projected levels for many consumers. Lower prices could reduce seasonal heating expenditures. Uncertainty exists with respect to the status of funding for the Low Income Energy Assistance Program (LIHEAP), the key federal program assisting low-income households with heating expenditures."
Library of Congress. Congressional Research Service
Pirog, Robert L.; Yim, Eugene
2013-12-18
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Winter Fuels Outlook 2011- 2012 [November 14, 2011]
"The Energy Information Administration (EIA), in its 'Short-Term Energy and Winter Fuels Outlook' (STEWFO) for the 2011-2012 winter heating season, projects that American consumers should expect to see heating expenditures that on average will be somewhat higher than last winter. Average expenditures for those heating with natural gas are projected to increase by 2.6%, while those heating with electricity are projected to see a decline in expenditures of about 0.6%. These two fuels serve as the heating source for about 88% of all U.S. household heating. Propane and home heating oil consumers are also projected to see increased expenditures. Within the U.S. average projections, differences exist with respect to region of the country and type of fuel. Economic conditions of slow growth and relatively high unemployment suggest that lower consumption of all fuels may occur, especially in the context of milder winter weather conditions as forecast by the National Oceanic and Atmospheric Administration (NOAA). While the price of natural gas has been relatively low, the price of oil has been relatively high over the past year. If the price of oil spikes for an extended amount of time, or if the price of natural gas increases, heating costs might be expected to rise above projected levels for many consumers. Lower prices could reduce seasonal heating expenditures. Uncertainty exists with respect to the status of funding for the Low Income Energy Assistance Program (LIHEAP), the key federal program assisting low-income households with heating expenditures. Funding for the Department of Labor and the Department of Health and Human Services has to be resolved by Congress (S. 1599, H.R. 3070). It has not been announced whether the CITGO [Citgo Petroleum Corporation] program to assist some U.S. heating oil consumers will be continued."
Library of Congress. Congressional Research Service
Pirog, Robert L.; Yim, Eugene
2011-11-14
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United States and Saudi Arabia Energy Relations [November 19, 2018]
"Following the murder of journalist Jamal Khashoggi at a Saudi Arabia consulate in Istanbul, Turkey, some Members of Congress have expressed interest in taking action against Saudi Arabia for its apparent role. The purpose of this In Focus is to provide a non-comprehensive overview of the U.S.-Saudi Arabia energy relationship that dates back to at least 1933, when Saudi Arabia granted an oil concession to Standard Oil Company of California (now Chevron). Since then, this relationship has witnessed the creation--founded by U.S. oil companies--of the Arabian American Oil Company (Aramco), nationalization and ownership transfer of Aramco to Saudi Arabia (renamed Saudi Aramco), a Saudi-supported embargo of crude oil shipments to the United States, and various periods of energy cooperation. Today, the U.S.-Saudi energy relationship includes interests within three general categories: (1)energy trade, (2) business operations, and (3) global petroleum prices."
Library of Congress. Congressional Research Service
Brown, Phillip (Specialist in Energy Policy); Pirog, Robert L.
2018-11-19
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Import Taxes on Mexican Crude Oil [February 9, 2017]
"In 2016, the United States imported approximately 588 thousand barrels per day (m/d) of Mexican crude oil valued at approximately $7.6 billion. Recently, the Trump administration raised the possibility of imposing of a 20% tax, or fee, on imports from Mexico, presumably including imports of crude oil, to provide funding for the construction of a wall along the U.S.-Mexican border. If imposed, a tax on crude oil imports from Mexico could have important implications for the North American oil market. The relative prices of crude oil in the region could be affected enough to create market inefficiencies and change the incentives for related investment, production, and consumption. This Insight does not attempt to analyze a broader 20% border adjustment tax levied on imports from all destinations, nor does it address
possible World Trade Organization issues related to this tax proposal."
Library of Congress. Congressional Research Service
Pirog, Robert L.; Parfomak, Paul W.
2017-02-09
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Cross-Border Energy Trade in North America: Present and Potential [January 24, 2017]
"The United States, Canada, and Mexico in many ways comprise one large, integrated market for energy commodities. [...] Altogether, the value of the energy trade between the United States and its North American neighbors exceeded $140 billion in 2015, with over $100 billion in U.S. energy imports and over $40 billion in exports. The United States' energy trade relationships with Canada and Mexico are increasingly complex. They have been undergoing fundamental change in recent years--largely due to technological advancements in the petroleum and natural gas sectors creating new competition for energy supplies and new market interconnections. Consequently, while energy policies in one country have inevitably affected the others, their cross-cutting effects in the future are difficult to predict. Nonetheless, a review of the recent trade data highlights several key market developments. [...] To date, Congress has favored a growing North American energy partnership--but ensuring that this partnership continues to be as mutually beneficial as possible will likely remain a key oversight challenge for the next decades. Congress has been facing important policy questions in the U.S.-Canada and U.S.-Mexico energy contexts on several fronts, including the siting of major cross-border pipelines, increasing petroleum supplies from Canadian oil sands, exporting natural gas production from United States' shales, and meeting commitments to increase renewable energy supplies and reduce atmospheric emissions of greenhouse gases. Legislative proposals in the 115th Congress could directly influence these developments."
Library of Congress. Congressional Research Service
Parfomak, Paul W.; Campbell, Richard J.; Pirog, Robert L. . . .
2017-01-24
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Role of Federal Gasoline Excise Taxes in Public Policy [September 11, 2009]
"American drivers, compared to those in other industrialized nations in Europe, pay relatively low federal, state, and local gasoline and diesel excise taxes. The Federal taxes are used specifically to fund annual highway construction, maintenance, and mass transit. Over the years, proposals have come forth to raise the federal tax as a way to address long-standing national policy concerns, including U.S. dependence on imported oil and various environmental problems related to large volumes of gasoline consumption. Policy attention on the role of the gasoline tax has also increased recently due to three major developments. First, the 2008 oil and gasoline price run-up and subsequent economic downturn have led to a decline in gasoline tax revenues available for needed highway construction and maintenance. Second, the possibility of enacting some form of binding climate change legislation in the next several years will eventually mean an increase in the relative price of fossil fuels, including oil and gasoline. Third, the volatility of gasoline prices has affected investment planning (e.g. for alternative fuels) and arguably contributed to the troubles facing domestic automobile manufacturers. In the above context, this report outlines some of the macroeconomic and microeconomic pros and cons of using the federal gasoline excise tax for policy purposes in addition to the funding of highway infrastructure."
Library of Congress. Congressional Research Service
Pirog, Robert L.
2009-09-11
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Gasoline and Oil Prices [August 20, 2008]
"During the summer of 2008, American consumers faced gasoline prices that attained record high levels of over $4.00 per gallon, and oil prices of over $140 per barrel. These high prices have contributed to a downturn in economic growth, and an increase in inflation. They have forced consumers to make difficult choices concerning spending patterns, while their general economic well-being declined. The record prices have raised costs and adversely affected a wide variety of industries, including transportation, automobiles, and agriculture. Because there does not seem to be one, easily identifiable, factor that has caused these high prices, and because prices rose so quickly from mid-2007 to mid-2008, consensus on how to mitigate the situation through policy has been lacking. Calls for increased exploration and drilling in Alaska and currently restricted offshore areas, energy conservation, increased reliance on alternative energy sources, curbing speculation on oil futures markets, releasing oil from the Strategic Petroleum Reserve, suspending the federal tax on gasoline, and taxing the profits of oil companies have all been debated. This report examines the extent of price increases in gasoline and oil, focuses on the linkage between the two, and analyzes the causes of the price increases, and the likelihood that they might be reversed through market responses, or policy measures."
Library of Congress. Congressional Research Service
Pirog, Robert L.
2008-08-20
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Use of Profit by the Five Major Oil Companies [June 19, 2007]
"The five major integrated oil companies operating in the U.S. market have earned net incomes totaling $308 billion since 2004. In the previous four years, from 2000 to 2003, they earned net incomes of $171 billion. This 80% increase in profit has attracted public attention and raised the issue of whether 'windfall' profits had accrued to the firms. At the same time that these oil companies were earning increased profits, U.S. gasoline consumers were facing prices that rose above $3.00 per gallon, raising concerns that the increased profits might be tied to 'price gouging' by the oil companies. This report analyzes the uses of accrued profits by the five major integrated oil companies from 2004 through 2006. Although the oil industry is composed of thousands of firms involved in many different aspects of the business, these five firms represent the visible face of the oil industry to the American public. These companies also earned 90% of the total earnings of integrated oil companies, and 74% of the earnings of all the integrated oil companies, the independent oil and gas producers, and the independent refiners and marketers in 2006. Because of their size, the decisions they make with respect to utilizing profits will largely determine how the industry's use of profit is viewed by the public."
Library of Congress. Congressional Research Service
Pirog, Robert L.
2007-06-19
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Keystone XL Pipeline: Overview and Recent Developments [November 13, 2014]
"In May 2012, TransCanada (a Canadian company) submitted to the U.S. Department of State an application for a Presidential Permit authorizing construction and operation of pipeline facilities for the importation of crude oil at the United States-Canada border. The Keystone XL Pipeline would transport Canadian oil sands crude extracted in Alberta, Canada, and crude produced from the Bakken region in North Dakota and Montana to a market hub in Nebraska for further delivery to Gulf Coast refineries. A decision to issue the Presidential Permit would be conditioned on a State Department determination that the pipeline project would serve the national interest. Members of Congress remain divided on the merits of the project, as some have expressed support for the potential energy security and economic benefits, while others have reservations about its potential environmental impacts. There is also concern over how much crude oil, or petroleum products refined from Keystone XL crude, would be exported overseas. Though Congress, to date, has had no direct role in permitting the pipeline's construction, it has oversight stemming from federal environmental statutes that govern the review. Further, Congress may seek to influence the State Department's process or to assert direct congressional authority over approval through new legislation. This report describes the Keystone XL Pipeline Project and the process that the State Department must complete to decide whether it will approve or deny TransCanada's permit application. The report also discusses key energy security, economic, and environmental issues relevant to the State Department's national interest determination. Some of these issues include perspectives among various stakeholders both in favor of and opposed to the construction of the pipeline. Finally, the report discusses the constitutional basis for the State Department's authority to issue a Presidential Permit, and opponents' possible challenges to this authority."
Library of Congress. Congressional Research Service
Fergusson, Ian F.; Pirog, Robert L.; Vann, Adam . . .
2014-11-13
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Transportation Fuel Taxes: Impacts of a Repeal or Moratorium [May 7, 2008]
"Legislation that would repeal or otherwise provide for a summer-long moratorium of federal transportation fuel taxes has been introduced in the 110th Congress. Simultaneously, Senators McCain and Clinton are proposing a summer fuel tax collection moratorium as part of their Presidential campaigns. Fuel prices have risen rapidly in 2008 for a variety of reasons. Those seeking to alter federal fuel tax collection are doing so in the belief that a reduction in fuel taxes would give Americans a modest level of economic relief from high pump prices. Current market conditions and the marginal amount of tax relief incorporated in most proposals, however, raise uncertainty as to whether prices to individuals and businesses would fall and whether any price decline would be meaningful to consumers in economic terms. Also of concern is the possible impact of any repeal or moratorium on the overall federal budget deficit. A reduction in transportation fuel taxes would result in a decrease in spending for Highway Trust Fund-supported federal programs, unless Congress designated alternate sources of funding for these programs. As a result of the structure of the federal programs, the effects of a fuel tax repeal on federal transportation programs would not necessarily be immediate, but depending on the length and scope of the repeal or suspension, they could be substantial."
Library of Congress. Congressional Research Service
Fischer, John W. (John Werner); Pirog, Robert L.
2008-05-07
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U.S. Crude Oil Export Policy: Background and Considerations [March 26, 2014]
"During an era of oil price controls and following the 1973 Organization of Arab Petroleum Exporting Countries oil embargo, Congress passed the Energy Policy and Conservation Act of 1975 (EPCA), which directs the President 'to promulgate a rule prohibiting the export of crude oil' produced in the United States. Crude oil export restrictions are codified in the Export Administration Regulations administered by the Bureau of Industry and Security (BIS)--a Commerce Department agency. The President has some powers to allow certain crude oil exports if an exemption is determined to be in the national interest. In 2009, a decades-long U.S. oil production decline was reversed due to the application of advanced drilling and extraction technologies to produce tight oil. The Energy Information Administration (EIA) 2014 reference case projects that total U.S. crude production will be 9.6 million barrels per day by 2019--up from 7.7 million in 2013. Nearly all of this growth is expected to come from tight oil production. This anticipated growth is resulting in calls to lift or otherwise ease U.S. crude oil export restrictions. However, crude oil imports are projected to range from 6 million to nearly 8 million barrels per day for the period out to 2040. This apparent disconnect between import needs and the desire to export can be explained when considering the following: (1) geographic location of tight oil, (2) tight oil quality characteristics, (3) refinery configurations, (4) oil transportation network, and (5) price discounts in different regions."
Library of Congress. Congressional Research Service
Brown, Phillip (Specialist in Energy Policy); Pirog, Robert L.; Vann, Adam . . .
2014-03-26
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Oil Industry Profits: Analysis of Recent Performance [August 4, 2005]
"High prices for crude oil in 2004 and into 2005 have reduced consumers' purchasing power and raised costs for businesses while providing billions of dollars to the oil industry and oil exporting countries. The industry's increased revenues have led to record profit levels. As the 109th Congress engages in oversight of recent broad energy legislation which aims to increase the domestic supply of crude oil to mitigate oil price increases in the longer term, another key factor in determining increased supply is how oil companies decide to allocate their profits between shareholder returns and investment in oil production. This report is written in response to a number of requests from Congress concerning profits in the oil industry. This report provides background information concerning the level of oil industry profits, the sources of those profits, and a discussion of the potential uses of profits. In response to the increased price of crude oil since the fall of 2004, profits of virtually all firms in all segments of the oil industry have increased. However, the greatest increases have been in the downstream, or refining and marketing, segments of the industry. These increases in profit are apparent whether the major integrated oil companies, the independents, or refiners are considered, lending some credence to the viewpoint that industry profits are the result of factors beyond the elevated price of crude oil. Historically, the current combination of high oil prices and high profits have been seen before, and periods of low prices and profits tended to follow."
Library of Congress. Congressional Research Service
Pirog, Robert L.
2005-08-04
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Oil Industry Profit Review 2007 [April 4, 2008]
"Increases in the price of crude oil that began in 2004 pushed the spot price of West Texas Intermediate (WTI), a key oil in determining market prices, to nearly $100 per barrel in the third quarter of 2007. Tight market conditions persisted through the remainder of 2007, with demand growth in China, India, and other parts of the developing world continuing. Uncertain supply related to political unrest in Nigeria, Venezuela, Iraq, and other places continued to threaten the market and contribute to a psychology that pushed up prices. The decline of the value of the U.S. dollar on world currency markets, as well as the investment strategies of financial firms on the oil futures markets, has also been identified by some as factors in the high price of oil. The profits of the five major integrated oil companies remained high in 2007, as they generally accounted for approximately 75% of both revenues and net incomes. For this group of firms, oil production led the way as the most profitable segment of the market, even though oil and gas production growth was not strong. The refining segment of the market performed relatively poorly. Independent oil and natural gas producers are small relative to the integrated oil companies, and their financial performance was weaker, with more than half of the firms reporting declines in net income."
Library of Congress. Congressional Research Service
Pirog, Robert L.
2008-04-04
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Keystone XL Pipeline Project: Key Issues [April 9, 2013]
"TransCanada's proposed Keystone XL Pipeline would transport oil sands crude from Canada and crude produced in North Dakota and Montana to a market hub in Nebraska for further delivery to Gulf Coast refineries. The proposed pipeline would consist of 875 miles of 36-inch pipe with the capacity to transport 830,000 barrels per day. Because it would cross the Canadian-U.S. border, construction of Keystone XL requires a Presidential Permit from the State Department. A decision to issue or deny a Presidential Permit is based on a determination that a project would serve the national interest, considering potential impacts on the environment, the economy, energy security, foreign policy, and other factors. Environmental impacts are evaluated and documented in an Environmental Impact Statement (EIS) under the National Environmental Policy Act (NEPA). […] Development of the Keystone XL Pipeline has been controversial. Proponents base their arguments supporting the pipeline primarily on increasing the diversity of the U.S. petroleum supply and economic benefits, especially jobs. Pipeline opposition stems in part from concern regarding the greenhouse gas emissions associated with the development of Canadian oil sands, continued U.S. dependency on fossil fuels, and the risk of a potential release of heavy crude. The Energy Production and Project Delivery Act of 2013 (S. 17), the Keystone for a Secure Tomorrow Act (H.R. 334), a bill to approve the Keystone XL Pipeline (S. 582), and the Northern Route Approval Act (H.R. 3) would all effectively approve the Keystone XL Pipeline. The Strategic Petroleum Supplies Act (S. 167) would suspend sales of petroleum products from the Strategic Petroleum Reserve until the pipeline is approved. On March 22, 2013, the Senate passed an amendment to the Fiscal 2014 Senate Budget Resolution (S.Con.Res. 8) that would provide for the approval and construction of the Keystone XL Pipeline (S.Amdt. 494)."
Library of Congress. Congressional Research Service
Parfomak, Paul W.; Pirog, Robert L.; Luther, Linda G. . . .
2013-04-09
