The Official TAP Management Blog

Research from the World Economic Forum indicates that economic growth and recovery is strongly correlated with a stable energy sector.

Considering the financial impact that gasoline prices have on Americans and the current economic climate, TAP Management and other domestic oil producers are doing their part to reduce the financial burdens caused by spiraling gas prices.

According to the New York Times, the typical American driver consumes 60 gallons of gasoline each month. When gas prices increase, the amount of discretionary income that consumers have is reduced.

For instance, a 50-cent price increase equates to an additional monthly expense of $30 for every American driver – a yearly increase of $360. This figure is compounded in households that have multiple drivers, and adversely affects the amount of money households can redistribute into the economy.

When gas prices climb, especially over $5 per gallon, evidence suggests that the stock market also suffers. Commodity strategist John LaForge of Ned Davis Research reported that a price increase of 33 percent or more during a six month period results in a weakened stock market performance – a situation that United States has encountered recently.

Furthermore, stocks for airlines, freight carriers and other companies that rely on gasoline are also negatively affected because they lack sufficient pricing power to offset the increased fuel costs. Therefore, as stocks fall, the market and individuals’ portfolios are affected similarly.

Combined data from the Energy Information Administration (EIA) and U.S. Department of Labor shows that there is a strong connection between gas prices and the unemployment rate. When gas prices increase, the unemployment rate also rises sharply.

The spike in fuel prices that Americans have encountered recently has caused a great deal of uncertainty regarding the unemployment rate in 2012. However, experts suggest that the national average will hover around 9 percent this year.

Considering the dire effects that rising gasoline prices have on our national and global economy, providing a stable, long-term energy solution is critical. TAP Management, and companies that share a similar focus, are dedicated to improving the quality of life for Americans.

Increasing the domestic supply of oil will ensure lower gasoline prices for consumers, reduced operational costs for manufacturers, thousands of jobs for Americans, and a more timely economic recovery.

TAP Management Inc.  |  515 Congress Avenue, Suite 2525  |  Austin, TX  |  (512) 527-6000

According to the U.S. Census Bureau, petroleum imports account for over 50 percent of the U.S. trade deficit.

This is just one of many reasons that TAP Management and other domestic oil producers are determined to reduce our dependence on foreign oil. Contact us at (512) 527-6000 to help restore our nation.

Over the past several years, industry officials and environmentalists have argued over the health and environmental impacts of fracking fluids.  A great deal of media attention has been placed on fracking in recent months. The EPA and similar environmentally focused organizations have expressed concerns regarding the types of chemicals used in this innovative extraction method.

However, the chemicals used in fracking can be found in many products that Americans use every day. Such products include soda, printer paper, laundry detergents, hand sanitizer, antacids, and even hot dogs. The chemicals included in these items are used for a variety of reasons. A slideshow created by Fuel Fix, offers a nice visual demonstration and explanation of products that contain fracking chemicals. Review the slideshow by clicking here.

Oil and natural gas producers have experienced criticism in the past for not revealing the chemical make-up of their fracking fluids. However, the Frac Focus Chemical Disclosure Registry website provides a detailed list of the most commonly used hydraulic fracturing chemicals, their purpose and the function each. Review the detailed list here.

Frac Focus is a joint venture of the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. The organization’s website also includes an extensive database of fracking chemicals reported voluntarily by drilling companies.

The educational mission of this organization is to better inform the public about fracking and groundwater protection – an organizational focus that is guarded through stringent well completion requirements and other casing necessities.

Fracking is providing a variety of benefits to local communities throughout the United States. Moreover, results from the Citi GPS Energy 2020 report suggests that the “shale gas revolution,” which has been accelerated by fracking technology, could result in the re-industrialization of America.

This conclusion is being drawn from the increased number of drilling related jobs and the lowered costs the shale gas boom is providing millions of businesses and consumers nationwide. The boom has also spurred multi-billion dollar investments in “cracking” facilities. These operations convert natural gas into ethylene – a base feedstock for polyethylene and other plastics used in a variety of U.S. businesses. Therefore, production from shale is making U.S. businesses more competitive nationwide and contributing to the overall improvement of our economy.

A healthy energy sector is imperative to both the economic recovery and energy independence of the United States. Nevertheless, it is important for any business of any industry to act responsibly in their efforts.

An article published by Rigzone offers some best practices for companies that engage in fracking techniques. Review the detailed list of these recommendations by clicking here.

By acting in accordance with environmental regulations and utilizing such best practices, TAP Management and other responsible oil and natural gas producers aim to increase the number of drilling projects in the U.S. while respecting the complaints and concerns of environmental organizations.

TAP Management Inc.  |  515 Congress Avenue, Suite 2525  |  Austin, TX  |  (512) 527-6000

With the November election just around the corner, headlines centered on political issues are dominating the mainstream media.  Perhaps the most prominently covered debate focuses on our nation’s future energy policy.

Achieving energy independence by 2020 is the core focus of Mitt Romney’s energy plan. By opening up the Atlantic coast to oil and gas development and providing states control over energy development on federal lands within their borders, Romney aims to create 3 million jobs and add $1 trillion to federal, state and local government revenues.

However, the plan excludes oil and gas production on lands that are specially designated as off-limits. Furthermore, the state’s development decisions would continue to be reviewed and approved by the federal government.

The Romney administration would also seek to energy partnership with Canada and Mexico in order to allow construction of the Keystone XL pipeline from Canada to Texas. The project, which has the ability to create jobs, stimulate economic growth and strengthen our energy relationship with Canada, has been delayed under the current administration.

Industry officials that support Romney’s energy plan describe it as “realistic” and believe that by aggressively developing our nation’s abundant resources, the U.S. can become an “energy superpower.”

According to the Independent Petroleum Association of America, the chairman of Bretagne LLC (an oil and gas company based in Nashville) stated, “The Romney plan demonstrates a very clear understanding of how America’s oil and natural gas companies, like mine, work.”

The proposed energy plan also aims to improve the environmental review process by setting clear deadlines and statues of limitations. These efforts will require more effective coordination between federal agencies and allow state reviews to satisfy federal requirements.

Denver-based Western Energy Alliance (WEA) applauds Romney’s plan, claiming that it “recognizes that empowering states, rather than imposing a one-size-fits-all government approach, is the right way to increase American energy, create jobs, and grow the economy.”

TAP Management and other oil and gas proponents are anticipating and energy policy that promotes the development of our nation’s natural resources. Such a focus has the potential to generate jobs, more stable energy prices and other economic benefits for American citizens.

TAP Management Inc.  |  515 Congress Avenue, Suite 2525  |  Austin, TX  |  (512) 527-6000

Information from the World Economic Forum suggests that a strong energy sector has a great deal of influence on economic growth and recovery. The robust oil and gas boom in Texas and North Dakota is a perfect example of this correlation.

Oil production in Texas exceeded 1.8 million barrels per day in both April and May. This is the highest output level the state has achieved in over 20 years dating back to 1991.

The oil and gas boom in the North Dakota Bakken Shale has been getting a lot of media attention recently because the state’s oil production has increased six-fold over the last six years – becoming the second-leading-oil producer in the United States.

As a result of the boom, the state’s population has increased to record high levels, the unemployment rate is the lowest in the nation and wages throughout the state are significantly higher than the national average.

Although the economic growth and production activity in North Dakota is impressive, the total number of barrels produced by the state in June is only about one-third of the oil output level of Texas in May.

The oil boom in West Texas, the Permian Basin and the Eagle Ford area in South Texas have helped increase the state’s oil production by 66 percent during the past 2 years.

A strong demand for oil coupled with refined hydraulic fracturing and horizontal drilling techniques are allowing domestic producers in the state to reach what were once untouchable, deep reserves. Furthermore, the increased production is providing economic benefits to their surrounding communities.

Shale production in Texas and North Dakota is has the United States on track to reduce crude oil imports to about 42 percent this year. If reached, this will be lowest level of oil imports the United States has achieved in 20 years.

According to information from the EIA, the U.S. relied on imports for roughly 44.8 percent of its petroleum consumption in 2011, down from 60.3 percent in 2005.

Adam Sieminski, the head of the U.S. Energy Information Administration (EIA), recently stated “What’s happening in North Dakota, and in Texas … is a tremendous development for U.S. oil production and economic growth.”

The economic success of Texas and North Dakota demonstrates the potential growth our nation can achieve by increasing the domestic production of oil and natural gas. The U.S. is home to some of the richest known shale formations on the planet and has an abundance of natural resources. Accessing these resources to maximize our energy sector is essential to providing a stable energy prices to consumers.

In addition to providing economic contributions and potentially preventing the economy from another recession, domestic oil and natural gas producers are doing their part to ensure that our nation’s growing energy demands are met. Therefore, investing in oil and natural gas prospects is not only wise, it is an exercise of social responsibility.

With over 50 producing wells in Texas, Oklahoma, Louisiana, Kansas and Wyoming in just seven years, TAP Management is a prominent player compared to other private, independently-owned oil and gas producers. Contact us at (512)527-6000 for more information about our company.

TAP Management Inc.  |  515 Congress Avenue, Suite 2525  |  Austin, TX  |  (512) 527-6000

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A new poll conducted by Harris Interactive interviewed 1,016 registered voters telephonically to determine popular opinions surrounding oil and natural gas related issues. According to the study, American voters show strong public support for energy development and its ability to create jobs and improve the economy.

Roughly 71 percent of voters support increased access to domestic oil and natural gas resources.

About 90 percent of voters agree that increased access to domestic resources could lead to more American jobs.

Almost 9 out of 10 participants agree that increased oil and natural gas production could help lower energy costs for consumers.

Approximately 65 percent of voters agree that increases in energy taxes could drive up energy costs.

Roughly 73 percent of respondents support changing our nation’s energy policy to increase offshore development.

92 percent of voters believe domestic production and America’s energy security are important factors in the upcoming election.

Regarding U.S. energy policy, 63 percent of voters believe that Washington is on the wrong track. Approximately 98 percent of Republicans, 88 percent of Democrats and 87 percent of Independents in the survey said that energy is either very important or somewhat important election issue this November.

Despite complaints of rising energy costs and negative media focus of the oil and gas industry, voters seem to realize the importance of a growing energy sector. TAP Management and other domestic producers are doing their part to improve the economy by creating jobs and more stable energy prices.

TAP Management Inc.  |  515 Congress Avenue, Suite 2525  |  Austin, TX  |  (512) 527-6000

Many energy executives have expressed complaints surrounding the United States future energy plan, stating that it lacks substance and a realistic evaluation. TAP Management and other companies that seek to positively impact our energy policy realize the necessary use of fossil fuels to maintain projected future energy demands.

Population and economic development are key factors behind global energy forecasts. According to ExxonMobil’s Outlook for Energy, the international supply of energy will need to exceed current levels by roughly 30 percent in 2040. This increase in supply is due to the expectation that the global population will reach 9 billion by 2040 – a 25 percent increase from 2010.

On Monday, August 6^th, Republican U.S. Representative David McKinley and Democratic U.S. Senator Joe Manchin co-hosted a forum to discuss the nation’s evolving energy policy. The event was held at the West Virginia University National Research Center for Coal and Energy. The purpose of the event was to obtain feedback from participants, allowing McKinley and Manchin to report the presented statements to legislators in Washington.

According to an article by the San Francisco Chronicle, chief executive officer Tony Alexander of FirstEnergy in Ohio blasted an “all-in policy” suggestion made by Joe Manchin, claiming that trying to include all forms of energy will result in a plan that lacks direction. Alexander contended that any national policy should focus on domestically produced coal, natural gas and electricity. Furthermore, he explained that subsidies should not give one industry an advantage over another because they “create inefficiencies, lead to higher prices, assume customers can’t make decisions on their own and, more importantly, are a tax on the economy and the people.”

Paul Koonce, chief executive officer of Dominion Virginia Power, argued that regulatory stability is also critical. He claimed the cost of environmental compliance for a typical U.S. power plant is “astronomical,” and stated that utilities need stability to function.

The chief executive officer of Pennsylvania-based Consol Energy, Brett Harvey, suggested that there’s no point in debating whether fossil fuels will continue to be used. He argued that energy demands are expected to increase by 55 percent in the next two decades and secondary energy sources such as wind, solar and water all require a mechanical means to capture, and therefore, are inherently “less efficient on the front end.” Harvey also argued that India and China aren’t phasing out any particular source of energy and neither should the U.S.

Environmentalists that attended the forum also acknowledged that fossil fuels will remain part of our energy plan in the foreseeable future. However, Kit Kennedy of the Natural Resource Defense Council, expressed complaints about these statements, claiming that renewables and energy efficiency programs can create job opportunities as well.

“We can do better,” she said. However, “it doesn’t mean saying goodbye to fossil fuels. That’s not how it’s going to work.”

Another speaker, David Kreutzer of the Heritage Foundation, warned that subsidies and legislation impose energy efficiency standards. He stated that market prices will driver consumers’ choices and whatever saves consumers money is what will be embraced.

“When the economics work out, people will switch,” he stated. “They’re greedy.”

The forum panel, which consisted of nearly a dozen speakers, debated a number of issues regarding energy policy. We hope the debate will help policy makers in Washington take a realistic and pragmatic approach to American energy policy – a plan that fosters job growth and satisfies the economic interests of our nation.

TAP Management Inc.  |  515 Congress Avenue, Suite 2525  |  Austin, TX  |  (512) 527-6000

Despite consumer complaints and the unfavorable perceptions of oil and gas companies, evidence suggests that major players in the industry ranked well compared to global counterparts in transparency. Both Statoil and ExxonMobil took two of the top five spots among Transparency International’s listing of 105 of the world’s largest publicly listed multinational companies.

The Transparency International (TI) ranking system is based on a scale of 0 to 10, with an index score of 10 being the most transparent and 0 being the least transparent. This scoring system, which is consistent regardless of the industry and regulatory regime under which the company operates, considers three factors.

These factors include how openly a company reports its anti-corruption efforts, how clearly a company is structured and where it is located, and the level of transparency a company exhibits in making financial and non-financial contributions to the countries where they are located.

After nearly three months of declines, gasoline prices rose by 17 cents a gallon in July – an increase of 5.1 percent. According to AAA gas gauge, this spike marks the largest monthly rise in the month of July over the past dozen years.

AAA predicted with “medium-high” confidence that gas prices would remain flat, or experience a relatively small increase between now and Labor Day. Historically, gas prices have fallen after Labor Day as the summer driving season ends and refineries transition to less expensive fuel blends. However, a key section of one of the nation’s largest oil refineries was recently damaged and is undergoing repairs. This is expected to add to the cost of gasoline in the upcoming months.

The more recent price increase is due to rising crude and ethanol costs, geopolitical concerns in the Middle East and mixed economic signals surrounding the global economy. Other factors that could affect gas prices in the near future include an increase in demand, unfavorable U.S. unemployment data, European debt developments and the Atlantic hurricane season.

A variety of factors affect the price consumers pay at the pumps. However, misconceptions and popular myths surrounding gas prices are commonplace in the U.S. Below are a few examples of such fallacies:

“Politicians can directly impact gasoline prices.”

Crude oil prices account for the majority of gasoline prices. Crude oil prices are set by a global market, not individuals. Although it is true that politicians can indirectly affect gasoline prices, they have very little direct impact on the global market.

“Gas stations make large profits off gasoline.”

Although many drivers believe that gas stations are raking in the profits, gas stations make only a few cents on the dollar.  

“Tapping into the Strategic Petroleum Reserve could lower gas prices.”

President Obama tapped the reserve a year ago and the impact went relatively unnoticed by drivers. 

“Oil companies produce less in spring.”

The price of gasoline usually increases during the spring months. However, this is not due to oil companies decreasing their production levels. The increase usually occurs because refineries are switching from winter to summer blends and refinery maintenance is causing a tighter supply.

Other popular gas myths relate to erroneous fuel saving tips that promise better fuel efficiency for consumers. Here are a just a few:

“Fill up in the morning.”

Although there is a bit of truth to this, it really depends on where you live. Gasoline expands as it warms. In other words, you get less gas volume when the weather is warm. Colder climates should be less concerned with this tip. However, filling up in the morning or at night, during cooler periods in warmer climates, can provide you added value at the pumps.

“Turn off the air conditioner and roll down the windows.”

This actually creates additional drag on your vehicle, lowering your vehicle’s fuel efficiency. Moreover, traveling at higher speeds will further increase drag. However, you can save fuel by turning off your air conditioner and keeping your windows up.

“Gas savings products increase gas mileage.”

Be wary of these products. The Federal Trade Commission has tested more than 100 “fuel saving” devices and found 25 percent did not improve gas mileage. A few even damaged the engines.

As you can see, there is a great deal of misinformation surrounding the topic of gas prices, causing a variety of consumer complaints. TAP Management is determined to help improve the exchange of information surrounding energy-related issues. In doing so, we hope to help our nation solve the real issue at hand – providing more stable energy prices for consumers.

TAP Management Inc.  |  515 Congress Avenue, Suite 2525  |  Austin, TX  |  (512) 527-6000

In March, North Dakota surpassed Alaska in oil production, becoming the second-leading oil-producing state in the U.S.  Although the state is not expected to exceed Texas’ oil output levels, state officials claim that the North Dakota oil and gas boom will get even bigger in the upcoming years.

According to the state tax commissioner, North Dakota’s oil tax revenues could top $3.5 billion when the state’s current two-year budget ends.  Oil prices have stayed close to the Legislature’s original forecasts, but production levels have been significantly higher than expected.

The state’s 2011-2013 budget, which was completed in the spring of last year, estimated that western North Dakota’s oil fields would eventually generate 425,000 BPD. However, in May, the average daily output was nearly 640,000 barrels.

Oil regulators in the state are predicting higher production levels in the very near future. Lynn Helms, the director of North Dakota’s mineral resources department, emphasized that oil production in the Bakken Shale formation is growing by 15,000 to 20,000 BPD every month.

Helms also explained that thousands of additional wells will be drilled in the coming years. According to several news sources, Helms stated, “We’re seeing back-to-back 5 percent increases in production. And we’ve got 35,000 wells left to drill in this Bakken reserve.”

Thirty percent of the revenue being generated by North Dakota’s oil and gas boom goes into a state oil tax fund, which cannot be touched for another five years. However, a share of the money goes to trust funds that benefit schools and water projects. Another portion goes to a state fund aimed at cutting property tax rates, and another share is allocated to local governments in the western counties where the oil is being extracted.

The energy plan that North Dakota officials developed almost a decade ago appear to be paying off for the state. The Eagle Ford shale boom and other shale production regions are also providing economic benefits to both state and local agencies around the nation. TAP Management and other oil and natural gas producers are expecting the shale boom to help the U.S. become an energy independent nation.

TAP Management Inc.  |  515 Congress Avenue, Suite 2525  |  Austin, TX  |  (512) 527-6000