IOCC: excise tax to cut reserves 490 million bbl. [Interstate Oil Compact Commission]

Journal Article · Mon Aug 04 04:00:00 EDT 1980 · Oil Gas J.; (United States)

OSTI ID:5808805

The US Crude Oil Windfall Profit Tax of 1980 will prevent recovery of at least 490 million bbl of US crude - most of it from stripper wells - by reducing the economic life of producing oil wells, according to the Interstate Oil Compact Commission in a report prepared by Resource Analysis and Management (RAM) Group, Oklahoma City. The reduced recovery will translate into a production loss of up to 131,480 bpd of crude, mainly due to the plugging of more than 13,140 existing stripper wells and premature abandonment of an additional 10,730 wells before stripper status is reached. This loss must be replaced by importer crude at landed prices of $35/bbl or more. Wellhead value loss due to the tax is estimated at more than $17.22 billion, assuming a crude price of $35/bbl. The tax will trim more than $637 million out of state tax revenues, mainly because of premature abandonment of stripper wells. Of the 490.13 million bbl of oil that will be lost because of the tax, 355.69 million bbl will be from stripper wells. Wellhead value of this lost stripper crude would be $12.44 billion. The tax amounts to a price rollback on stripper crude of 16.91% for independent and 33.93% for major companies.

• OSTI ID: 5808805
• Journal Information: Oil Gas J.; (United States), Journal Name: Oil Gas J.; (United States) Vol. 78:31; ISSN OIGJA
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
021000* -- Petroleum-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
293000 -- Energy Planning & Policy-- Policy
Legislation
& Regulation
294002 -- Energy Planning & Policy-- Petroleum
ABANDONED WELLS
ECONOMIC IMPACT
ENERGY SOURCES
FOSSIL FUELS
FUELS
IMPORTS
LOSSES
PETROLEUM
PRICES
TAXES
WELLS
WINDFALL PROFITS TAX