Arkansas Energy Report: Energy-related CO2 emissions decline, severance tax revenue still falling
by October 13, 2016 1:25 pm 221 views
Editor’s note: The Arkansas Energy Report is produced monthly and is sponsored by the Arkansas State Chamber of Commerce/Associated Industries of Arkansas, and MISO (Midcontinent Independent System Operator). Talk Business & Politics makes every effort to use information current at time of posting.
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U.S. energy-related carbon dioxide (CO2) emissions totaled 2,530 million metric tons in the first six months of 2016, the lowest emissions level for the first six months of the year since 1991, according to the U.S. Energy Information Administration (EIA).
The agency cited mild weather and changes in the fuels used to generate electricity for much of the decline in energy-related emissions. EIA’s Short-Term Energy Outlook projects that energy-associated CO2 emissions will fall to 5,179 million metric tons in 2016, the lowest annual level since 1992.
In the first six months of 2016, the United States had the fewest heating degree days (an indicator of heating demand) since at least 1949, the earliest year for which EIA has monthly data for all 50 states. Overall, total primary energy consumption was 2% lower compared with the first six months of 2015. The decrease was most notable in the residential and electric power sectors, where primary energy consumption decreased 9% and 3%, respectively.
SEVERANCE TAX REVENUE
Arkansas severance tax collections for the first quarter of 2017 fell nearly 33%, but revenue for marketed sales of natural gas in September rose to the highest level in nearly a year as higher commodity prices are drawing some drilling interests back to the Fayetteville Shale.
In fiscal 2016, Arkansas severance tax collections fell to the lowest level since the Arkansas legislature raised the levy on natural gas production, applying tax rates of 1.25%, 1.5%, and 5% depending on the well classification by the Arkansas Oil and Gas Commission.
In September, collections jumped to a solid $3.5 million, well above August’s $2 million tally and only 7.7% below the $3.79 million collected a year ago. Collections for the first three months of fiscal 2017 fell 32.9% to $7.29 million, compared to $10.87 million in the first quarter of fiscal 2016.
Still, the month-to-month and quarterly severance tax collection in fiscal years 2016 and 2017 are well behind the $7.56 million and $23.86 million collected in September and the first quarter of fiscal 2015, respectively.
OTHER ENERGY REPORT HIGHLIGHTS
• For the week ended Oct. 7, the U.S. rig count rose by three to 524 according to Baker Hughes Inc. The number of oil rigs drilling in the U.S., now at 428, have seen 15 straight weeks of positive gains.
• An America Petroleum Institute report on Oct. 10 shows that the estimated oil wells drilled and completed in the third quarter of 2016 remained relatively unchanged from the previous quarter at 2,285. That is a decline of 3.7%, which follows an average of 17.3% in quarterly declines for the past year and a half.
• In Arkansas, pump prices are averaging about $2.05 for a gallon of regular unleaded, five cents higher than prices a week and a month ago and eight cents cheaper than year ago levels. Some areas of the state are seeing prices as low as $1.80 per gallon in the Fort Smith area, according to GasBuddy.com.
Link here for the complete PDF of the October 2016 Arkansas Energy Report.