TPT May 2007

From the AmericaS

Chevron has been pounding on for a couple of years now is the need for an energy policy that looks at energy conservation holistically. There are a lot of ways of answering the questions. There are multiple answers. There doesn’t have to be a fight about this. It is too important. Q : There is also this notion of energy security that has crept into the debate and the notion that there is a competition for resources from which the United States needs to insulate itself. A : I think that’s the wrong answer. It’s a very simplistic answer. When we are importing two-thirds of the oil we use, and a lot of the gas we use, the best energy security is when the globe is secure. And I mean that broadly, as well as in an energy way. If you have any one of the major players on the demand or supply side feeling threatened or isolated, it’s a bad thing for the globe. We are interdependent. We have gone way past the point of independence in anything. Q : Do you sense a retreat in the US role in the energy world? After all, this was an industry that was invented by Americans. A : The US industry, at times, has played a bigger role. But the reality is that what you’re seeing happening in the oil industry is probably very similar to what you see happening in other elements of the global economy. Companies like ours are bigger than we were 10 years ago, and much bigger than we were 50 years ago. But we’re a smaller piece of the total global energy pie because the pie has grown so much bigger and there are so many more participants in it.

Anadarko Petroleum revives lawsuit to avoid Gulf of Mexico royalties

As a solution to America’s energy problems, offshore drilling may be problematic. One of the biggest oil producers in the Gulf of Mexico is suing the US government for the overturn of regulations that compel companies drilling in publicly owned waters to pay full royalties on oil and gas they produce during times of high energy prices. The lawsuit against the Interior Department by Anadarko Petroleum (Houston, Texas) could, if successful, allow energy companies to avoid as much as $60 billion in royalties due the government over the next two decades. Anadarko, which earned $4.8 billion in profit last year on sales of $10.2 billion, argues that Congress offered oil companies special incentives to undertake deepwater drilling, effectively exempting them from the standard 12 per cent to 16 per cent royalty on much of their production in the Gulf of Mexico. The Interior Department, which leases out millions of acres in the Gulf, maintains that the incentives were never intended to apply when oil prices climbed above about $34 a barrel. The lawsuit was filed in early 2006 by Kerr-McGee Oil and Gas Corp (Oklahoma City), which Anadarko acquired later in the year for $21 billion. But Anadarko held off on the suit to enter court- supervised mediation talks with the Interior Department. On March 1, a federal judge in Louisiana declared that the mediation talks had failed and ordered both sides to start filing arguments in late May.

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M ay /J une 2007