Insight
Carbon taxes and other clean energy agenda tax changes threaten investor value
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 10 images and tables including:
- Carbon emissions pricing proposals introduced before the US Congress
- Carbon price proposals in the 116th United States Congress
- Financial impact of proposed plans on US assets
- Durbin carbon tax financial impact on subset of US assets
- Durbin carbon tax reserve impact on subset of US assets
- Durbin plan NPV impact, carbon intensity and gas as proportion of reserves
- Carbon intensity of the top 20 petroleum producing countries
- Emissions intensity of electric generation by state
- GoM competitiveness with royalty increase
- Value impact of eliminating IDC, all future costs treated as tangible
What's included
This report contains:
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