Page 11 - NorthAmOil Week 39 2021

NorthAmOil POLICY NorthAmOil

US reportedly considering extending

MLPs to renewables

US TAX-ADVANTAGED partnerships typically They are publicly traded.
used to benefit the US’s oil and gas industry are Advocates of extending MLPs to renewable
being considered for renewable energy, Reuters energy say that an MLP ensures that benefits
has reported. flow through to the developer, even if they do
The news service, citing knowledgeable not have the taxable income to benefit from tax
sources, reports that the White House is backing credits.
a plan by Congressional Democrats to extend President Ronald Reagan authorised MLPs in
master limited partnerships (MLPs) to renew- the Tax Reform Act of 1986 in order to increase
able energy. investment in capital-intensive energy infra-
This is important because oil and gas has long structure and in real estate.
Oil and gas has long benefited from MLPs to build out billions of dol- “An expansion [into renewables] could allow
benefited from MLPs lars of pipelines and storage facilities. retail investors to directly invest in renewable
to build out billions of “This is about fairness and equity. This change energy projects, rather than only being able to
dollars of pipelines and could really jump-start plenty of projects and invest in companies that may deal in renewa-
storage facilities. help support lower carbon fuels,” Geoff Cooper, bles,” Clark Sackschewsky, tax market leader at
head of the Renewable Fuels Association, told BDO USA in Houston, told Reuters.
Reuters. Such a plan, if implemented, would cost the
President Joe Biden has set a goal of a car- US Treasury almost $1bn in lost tax revenue over
bon-pollution free power sector by 2035 and is a decade.
pushing the Democrat’s $3.5 trillion spending Some environmentalists, however, have
legislation, which includes MLPs for renewable instead called on Biden to end MLPs for oil
energy such as wind, solar and biofuels. The leg- and gas because of the need to lower carbon
islation also extends production and investment emissions.
tax credits for wind and solar. The Alerian MLP Index, which measures
The MLP expansion would enable the interest in energy infrastructure MLPs such as
renewables industry to form the partnerships, the sizeable Enterprise Products Partners and
which combine the tax advantages of partner- Energy Transfer entities, is valued at nearly
ships with funding advantages of corporations. $200bn, said Reuters.™

PROJECTS & COMPANIES

BP starts up Thunder Horse expansion

GULF OF MEXICO BP announced this week that it had brought its block 822, south-east of the Thunder Horse
Thunder Horse South Expansion Phase 2 project platform in 6,350 feet (1,935 metres) of water.
online in the US Gulf of Mexico. With the project now online, BP’s programme
The initial two-well tieback at the Phase 2 of five major project start-ups that were planned
project is anticipated to have peak gross average for 2021 has been completed, the super-major
production of 25,000 barrels of oil equivalent per noted. Indeed, it also brought a sixth venture
day (boepd). BP’s senior vice-president of pro- online with the early start-up of the Matapal
jects, production and operations, Ewan Drum- project in Trinidad in late September.
mond, described the project as a “great example The start-up of the latest Thunder Horse
of the type of fast-payback, high-return tie-back expansion comes as UK-listed BP pursues a plan
opportunities we continue to deliver as we focus to grow its Gulf output to around 400,000 boepd
and high-grade our portfolio”. on a net basis by the mid-2020s.
Thunder Horse is BP’s largest production “Bringing high-margin, resilient barrels
platform in the Gulf, with a capacity to process online in basins we know best is central to BP’s
up to 250,000 barrels per day (bpd) of oil and strategy,” stated BP’s senior vice-president for the
200mn cubic feet (5.7mn cubic metres) per day Gulf of Mexico and Canada, Starlee Sykes.
of natural gas. It is located roughly 150 miles (241 BP is also pursuing a net-zero greenhouse gas
km) south-east of New Orleans. BP operates (GHG) emissions goal, set for 2050 at the latest,
Thunder Horse with a 75% stake, while Exxon- but its recent start-ups illustrate that it continues
Mobil holds the remaining 25%. to see potential for oil and gas projects, at least in
Phase 2 is located on Mississippi Canyon the shorter term.™

Week 39 30•September•2021 www. NEWSBASE .com P11