Insight
Carbon taxes and other clean energy agenda tax changes threaten investor value
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Will carbon taxes deter oil and gas investment? Would Joe Biden’s proposed increased federal royalties drive investment from the US? What is the financial impact if Congress eliminates immediate expensing of indirect drilling costs? In this follow-up to our first election upstream tax insight, we explore more of the most significant Democratic-supported proposals advancing a clean energy agenda. We examine the structure and impact of recently proposed carbon tax proposals, analyse the US Gulf of Mexico competitiveness with higher royalty rates and quantify the reduced investor value from eliminating indirect drilling costs. A careful balance between environmental and industry objectives is required before any of these policy aspirations are realised.
Table of contents
- Executive summary
- Democrats’ ambitions may be larger than Biden’s
- The legislature proposes carbon taxes – often
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Congressional proposal structure clouds sector and project impacts
- Carbon leakage
- Our methodology for carbon tax comparisons
- Upstream value is at risk to carbon taxes
- Is Norway emissions reduction a fair comparison?
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Other Biden proposals may discourage investment
- Is the end in sight for intangible drilling costs?
- Taxes and tax preference repeals require careful consideration and balance
Tables and charts
This report includes the following images and tables:
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Carbon emissions pricing proposals introduced before the US CongressCarbon price proposals in the 116th United States CongressFinancial impact of proposed plans on US assets
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Durbin carbon tax financial impact on subset of US assetsDurbin carbon tax reserve impact on subset of US assetsDurbin plan NPV impact, carbon intensity and gas as proportion of reservesCarbon intensity of the top 20 petroleum producing countriesEmissions intensity of electric generation by stateGoM competitiveness with royalty increaseValue impact of eliminating IDC, all future costs treated as tangible
What's included
This report contains:
