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To: Charles A. King who wrote (10423)	2/5/1999 8:41:00 AM
From: Charles A. King	Read Replies (1) \| Respond to of 13091

Low oil prices lop 25,000 jobs in U.S. energy industry Copyright © 1999 Nando Media Copyright © 1999 Reuters News Service NEW YORK (February 4, 1999 7:40 p.m. EST nandotimes.com) - The U.S. energy industry has sliced nearly 25,000 jobs since oil prices began to collapse 15 months ago, and thousands more will be lost unless prices recover soon, according to a study released Thursday. The study, conducted by the Independent Petroleum Association of America (IPAA), comes after one of the worst years on record for the oil industry, with prices dropping as much as 50 percent. In 1998, the average price of crude oil at the wellhead was about $11.25 a barrel, the trade group said in its study, based on a survey of 720 oil and gas companies. The Washington D.C. trade group warned that unless prices rise to an average of $14 a barrel for the next six months, another 208,000 oil and gas wells will be closed while 17,000 more U.S. jobs could be lost. Such losses have shut down an estimated 136,000 oil and 58,000 natural gas wells in the United States since November 1997, or about one-fifth of the nation's total producing wells, the study found. "These numbers are significant not only in terms of economic impact and employment, but also because once these wells are abandoned, access to the resource base tapped by these wells is gone forever," Gill Thurm, president of the IPAA said in a statement. The survey results indicate that 360,000 barrels per day, or about six percent of nation's total crude oil production, has been lost because of low prices, and that some two million bpd could be at risk. Meanwhile, Thurm applauded a plan unveiled by the U.S. Interior Department Thursday designed to aid low-volume oil producers with wells located on federal lands. The plan would allow companies operating "stripper" wells, those producing less than 15 barrels per day, to suspend operation on federal lands for up to two years without losing their leases. But Thurm cautioned more still needs to be done. "We are urging the Clinton administration and Congress to find a way to save this industry, which is dying on the vine." nandotimes.com House chairman leans toward oil loss write-offs Copyright © 1999 Nando Media Copyright © 1999 Reuters News Service By TOM DOGGETT WASHINGTON (February 4, 1999 5:28 p.m. EST nandotimes.com) - The chairman of the House Ways and Means Committee said Thursday he would back allowing U.S. oil producers, who have been battered by low energy prices and competing crude imports, to write off their losses for the previous five years. "The oil industry is facing low cost imports...The economic impact is that low cost imports, that are a major portion of the market, are undermining the ability of the oil and gas industry to be profitable," Rep. Bill Archer, a Texas Republican, said. A so-called "five-year carryback" would be similar to what President Clinton has proposed to steel companies, permitting them to write off losses against taxes paid in the previous five years, instead of two years as allowed under current law. Archer is considering including such a tax break for oil producers in a much bigger tax relief bill he is working on, a spokesman for the Ways and Means Committee said. "If the government's going to take from you when you are prosperous and then say you can't deduct your losses when you lose money, that's an unfair situation," Archer said. The price of oil is at the lowest level in a generation, making a gallon of gasoline the cheapest liquid sold at many service stations. (snip) Oil producers have been begging Congress and the Clinton administration for some kind of relief. The White House responded on Thursday when the Interior Department announced that low-volume oil producers would be able to suspend their operations while crude prices are low and not lose their leases on federal lands. Normal policy requires operators to promptly plug wells that are not producing and not paying royalty fees to the federal government. The relief will apply to wells that produce less than 15 barrels a day, and would be in effect for two years or until the cash price for West Texas crude stays at $15 a barrel for 90 consecutive days. In addition, the Energy Department is expected to unveil a plan later this month for filling the nation's Strategic Petroleum Reserve with oil Oil producers hope removing extra crude from the market may boost oil prices. A number of bills are also pending in Congress to provide tax credits for producers and authorize $300 million to buy oil for the nation's emergency crude stockpile. nandotimes.com Charles