Excise tax will impair US crude production

Journal Article · Mon Apr 14 04:00:00 EST 1980 · Oil Gas J.; (United States)

OSTI ID:6127820

Sumpter, R

The US petroleum industry characterizes President Carter's crude oil price decontrol/excise tax package as counterproductive. Industry officials say the phased decontrol of crude prices will flatten the country's historic production decline curve, yielding by 1990 another one to 2 million bpd above what output would have been if price controls had continued. More oil could have been developed and produced, as much 1.7 million bpd by the mid to late 1980s, if Carter's excise tax on additional producer revenue had not been coupled with price decontrol. Other industry sources speculate the tax may have halved the potential production gain that decontrol alone would yield. For oil already in free market categories, the tax amounts to a sharp rollback in wellhead prices. Placing the excise tax of $227 billion into government coffers, which otherwise would have gone to producers and been available for reinvestment, is not the way to encourage domestic production. Oil companies also warn that the excise tax's varying rates will induce some producers to invest where they can make the most profit, i.e., tertiary recovery and heavy oil projects, not necessarily where they could produce the most crude, i.e., workover and infill drilling.

• OSTI ID: 6127820
• Journal Information: Oil Gas J.; (United States), Journal Name: Oil Gas J.; (United States) Vol. 78:15; ISSN OIGJA
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
DEREGULATION
ECONOMIC IMPACT
ENERGY SOURCES
FINANCIAL INCENTIVES
FORECASTING
FOSSIL FUELS
FUELS
INDUSTRY
NORTH AMERICA
PETROLEUM
PETROLEUM INDUSTRY
TAXES
USA