Page 7 - NorthAmOil Week 15 2021

NorthAmOil COMMENTARY NorthAmOil

The infrastructure
proposals include a
$16bn initiative to
employ oilfield workers
that have lost their jobs
to plug abandoned
wells across the US.

the heaviest hydrocarbons, Canadian oil sands need unanimous support from Democrats in
producers, and those refiners on the US Gulf the narrowly divided US Senate in order to be
Coast that process their output, could be among pushed through. Additionally, Biden said this
the main beneficiaries of this aspect of the plan. week that he would engage with Republicans in
“The asphalt industry should be elated with an effort to win their support for his proposals.
Biden’s plan to upgrade 20,000 miles of roads in He noted, though, that he would move ahead
the US,” a Baker & O’Brien senior consultant, without their support if necessary, as he consid-
Charles Kemp, was quoted by Bloomberg as ers the plan to be essential for job creation in the
saying. “However, this announcement favours wake of the coronavirus (COVID-19) pandemic.
heavier oil production from outside of the US, Biden said he was prepared to negotiate on
which contains roughly double the amount of both changes to the plan, and how it would be
asphalt versus the asphalt content in light crudes funded.
from US domestic production.” The response from the oil and gas industry, The proposal to
Another boost for the oil and gas industry – at meanwhile, has been mixed. Oil and gas indus-
least in the short term – would come from the try groups have welcomed the incentives for eliminate oil and
$16bn Biden has earmarked for employing oil- investing in CCS, but have called on the federal gas subsidies
field workers that have lost their jobs as a result government to recognise the role hydrocarbons
of the recent energy sector downturns to plug will still continue to play in the US energy sys- is likely to be
abandoned wells across the US. tem, as well as the importance of pipelines.
Few details of this initiative have been pro- “While ambitious and aimed in the right strongly resisted.
vided so far, but it was touted as a way of cre- direction – bolstering America’s infrastructure –
ating jobs, with Biden saying orphaned wells President Biden’s American Jobs Plan overlooks
across the country number in the hundreds of the backbone of America’s energy system: pipe-
thousands. lines,” said the Texas Independent Producers &
“The well-capping support is great for Royalty Owners Association’s (TIPRO) presi-
well-servicing companies and will add jobs,” an dent, Ed Longanecker. “Pipelines are the most
Evercore ISI analyst, James West, was quoted reliable and efficient means to transport the
by Bloomberg as saying. “However, the corpo- oil and natural gas that powers families across
rate tax hike adds another burden to the US oil America.”
industry, which probably overwhelms the good Additionally, the proposal to eliminate oil
news.” and gas subsidies is likely to be strongly resisted.
Whatever the plan ends up looking like once it
What next? is finalised, it seems that the oil and gas industry
Analysts have noted that Biden’s plan would needs to brace itself for significant changes.™

Week 15 15•April•2021 www. NEWSBASE .com P7