BROADCASTS.com

b'Oil demand to buckle in India as COVID-19 surge wreaks havoc
https://financialpost.com/news/oil-demand-to-buckle-in-india-as-covid-19-surge-wreaks-havoc

Crude runs, oil demand feel pain as India\'s COVID-19 crisis hits like never before
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/042621-crude-runs-oil-demand-feel-pain-as-indias-covid-19-crisis-hits-like-never-before

- Is Covid in India going to destroy oil demand?
- India consumes 4 million bpd
- Percapita oil use isn\\u2019t that much
- Run cuts might not be substantial because India can sell unused products to others in the region
- How will this impact OPEC+ later this week?

Newsom, State Attorney General among those challenging sale of oil and gas leases in Kern
https://bakersfieldnow.com/news/local/newsom-state-attorney-general-among-those-protesting-sale-of-oil-and-gas-leases-in-kern
- will this go through if Newsom is renewed

Prof. James Coleman
- fossil fuel subsidies mean different things to different people
- IMF study used in many news reports that give a value on how much oil companies should be taxed on carbon
- How much income in theory does the company have and how much should they pay based on corporate income tax rate? Are we letting them take deductions on this?
- How are they taxed compared to other industries?
- If goal of tax system is to be neutral, does it meet that neutrality standard?
- It is pretty neutral - there are some incentives but not larger than any other industry. But are they taxed at their full income level?
- President Biden says he wants agencies to \\u201cget rid of fossil fuel subsidies\\u201d (whatever that means)
- Federal agencies do things that impact profitability of oil companies, but don\\u2019t do the taxes. Real issue is Congress. Have tried to change it over past 70 years and have been changes to make it less favorable to fossil fuel companies.
- What is meant by oil and gas companies?
- There is a lot that could impact this on the margins \\u2014
- Severance taxes could be reduced. They have been reduced before on shale wells and that amounts to a subsidy. A severance tax goes over all other taxes. Wind and solar don\\u2019t have a severance tax, for example. Similar to royalties. Biden admin can have a lot of influence on how royalties are calculated on Federal Land. When come out of \\u201cleasing pause\\u201d they may have new policies. On older leases they can change how the royalty is calculated based on interpretations, etc.
- US royalty system is VERY antiquated. Leaves a lot of corners where its not very rational.
- Individual landowners have much more sophisticated process for extracting revenue from oil and gas companies than the federal government does.
- Hard to believe that Fed gov will get more money without a complete overall. But if the goal is to end fossil fuel production then just slap more severance taxes on it.
- For upstream oil and gas, they get to deduct intangible costs of building wells sooner. But there are so many tax incentives allowing companies to deduct expenditures sooner that this special provision for oil and gas isn\\u2019t really all that necessary. Reason for it was that when you used to drill a well you didn\\u2019t know if it would produce enough to cover costs. But now with technology we have a much better idea of whether it will produce.
- Is there any tax benefit to not completing a well (DUC)? As soon as get income, have to pay tax, but want income. Going to get the deduction when you have the income. No reason to worry about deductions if not paying tax. But if you want to carry forward deduction from an investment. Have to choose whether will capitalize expense or not, but must do it by end of year.
- Congress is constantly playing with these.
- You are allowed to deduct a percentage of your income because oil from well has been sold and its not longer there. But those are very limited fo big oil companies. Most of the provisions just benefit small companies and independent producers. Depletion deduction percentage has gone down from 27% to 15% recently. But very hard to get rid of depletion percentage overall because it applies to all manufacturers.
Follow him @EnergyLawProf on twitter and Clubhouse

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit energyweek.substack.com'