A Royalty Revenue Forecast Model for Louisiana

Louisiana receives royalty revenue when minerals are produced on state-owned lands and water bottoms, federal properties within the state, and offshore fields underlying federal and state jurisdiction within 3–6 nautical miles from the coastline. Royalty revenue on oil and gas production has averaged $465 million per year and has contributed 3–7% of the state general revenue over the past decade. The purpose of this article is to develop a royalty revenue forecast model to assist in state budgeting and planning purposes. Producing fields are evaluated within a probabilistic framework to capture the uncertainty associated with future capital outlays and operational changes, and a discovery model is used to generate production from fields expected to be discovered in the future. The forecasts are combined with commodity price scenarios and royalty rate assumptions to generate a royalty revenue outlook for the state. We estimate that cumulative royalty revenue during 2012–2017 will range from $704 million to $1,408 million for oil production and from $286 million to $1,145 million for gas production for commodity prices of 60–120 $/bbl and 2–8 $/Mcf. At $80/bbl and $4/Mcf, cumulative royalty receipts from 2012 to 2017 are estimated at $1,510 million.     

A Scenario-Based Hydrocarbon Production Forecast for Louisiana

Conventional oil and gas productions in Louisiana has been in decline for four decades, but in recent years, new technology and capital investment have opened up a significant new resource play in the Haynesville shale, reversing Louisiana’s gas production decline. The need for long-term forecasting has become more important for state planning and for facilitating efficient regulatory development and incentive programs, as the largest oil and gas fields diminish in productivity and the promise of unconventional resources are realized. The purpose of this article is to present a hydrocarbon production forecast for Louisiana using disaggregate resource classes and a transparent analytic framework. A field-level evaluation is employed for producing fields categorized by primary product, resource category, geographic area, and production class. Undiscovered fields are classified according to conventional and unconventional categories and are modeled using a probabilistic and scenario-based forecast. The analytic framework is described along with a discussion of the model results and limitations of the analysis. Louisiana is in the early stages of transitioning to a primarily gas-producing state, and the manner in which the Haynesville shale develops will play a critical role in deliverability and economic prospects in the future.     

A Review of Louisiana Drilling and Production Activity, 1980–2011

Louisiana plays an important role in domestic oil and natural gas production, and in 2012 ranked sixth in oil production and third in gas production in the United States. Conventional oil and gas production in Louisiana has been declining steadily over the past four decades, while unconventional gas production has seen spectacular growth in recent years, effectively doubling the state’s natural gas output over three years. The structural changes impacting Louisiana’s oil and gas industry are complex and dynamic, and to better understand the relationships between activity drivers, a review of drilling and production data between 1980 and 2011 is performed and correlative relationships are developed. Drilling and completion trends, including completion and success rate statistics and drilled footage, are summarized by region. Correlative relationships are established between measured footage and the number of wells drilled, drilling activity, abandonments, and commodity price. We show that drilling activity in North Louisiana is highly responsive to changing oil prices, whereas in South Louisiana, activity is relatively inelastic. Well abandonments are shown to be negatively related to commodity prices. Horizontal, directional, active, idle, and orphaned well inventories are summarized.     

A petroleum discovery-rate forecast revisited—The problem of field growth

A forecast of the future rates of discovery of crude oil and natural gas for the 123,027-km² Miocene/Pliocene trend in the Gulf of Mexico was made in 1980. This forecast was evaluated in 1988 by comparing two sets of data: (1) the actual versus the forecasted number of fields discovered, and (2) the actual versus the forecasted volumes of crude oil and natural gas discovered with the drilling of 1,820 wildcat wells along the trend between January 1, 1977, and December 31, 1985. The forecast specified that this level of drilling would result in the discovery of 217 fields containing 1.78 billion barrels of oil equivalent; however, 238 fields containing 3.57 billion barrels of oil equivalent were actually discovered. This underestimation is attributed to biases introduced by field growth and, to a lesser degree, the artificially low, pre-1970's price of natural gas that prevented many smaller gas fields from being brought into production at the time of their discovery; most of these fields contained less than 50 billion cubic feet of producible natural gas.     

Econometric and learning curve estimation of U.S. potential oil supply

This study employs (1) a simple econometric model to generate a time series of drilling footage to the year 2040 and (2) learning models to estimate the oil reserve additions from that drilling, given scenarios of oil price and projected U.S. population. Reserve additions are estimated separately for the lower 48 states and Alaska regions by estimating separate drilling footage and learning models for each region. Generally, the estimates of potential supply from undiscovered oil fields and from extensions of known fields are more optimistic than recent estimates by others. For a $1989 price of about $20/barrel (bbl), which is similar to recent prices, the potential supply of oil is estimated to be approximately 60.7 billion bbl, with 95-percent confidence bounds of 54.3 and 67.1 billion bbl. For a price of $25.50/bbl, potential supply is estimated to be approximately 82 billion bbl, with 95-percent confidence bounds of 74.5 and 89.5 billion bbl. Although estimates of potential oil supply for the entire United States are more optimistic than other recent estimates, the part of that supply estimated to be forthcoming from Alaska is smaller than other recent estimates: 2.3 and 3.3 billion bbl for prices of about $20 and $25.50 per barrel, respectively. Thus, reserve additions from the lower 48 states through development drilling and through improved recovery and production technologies will become increasingly important to future U.S. oil supply.     

Oil- and gas-resource assessment in certain South American Basins—An application of ARDS (Ver. 5.0) to complex exploration and discovery histories

The modified Arps-Roberts Discovery Process Modeling System [ARDS (Ver. 4.01)] has recently been upgraded [ARDS (Ver. 5.0)] and applied to a wide variety of field discovery and wildcat drilling data with differing characteristics. ARDS is designed to forecast the number and sizes of undiscovered fields in an exploration play or basin by using historical drilling and discovery data. Fields used as input may be grown or ungrown. Two models for field growth—one offshore and the other onshore—have been implemented (Schuenemeyer and Drew, 1996). Uncertainty attributable to field growth is estimated via simulation. This upgrade of ARDS has been designed to handle situations when the data cannot be partitioned into homogeneous regions, but where estimation of the number of remaining oil and gas fields is still meaningful. In this upgrade of ARDS, many restrictions, which include those on the number of fields and wildcat wells required to forecast the size distribution of the oil and gas fields that remain to be discovered in an exploration play, a basin, or other target area, have been removed. In addition, flexibility has been gained by reforming the criteria for convergence of the model. In all, 32 basins and subbasins in South America were examined, 18 of which had sufficient data to be amenable to forecasting the field-size distribution of undiscovered oil and gas resources directly by using the Petroconsultants Inc. (1993) field discovery and wildcat drilling data. Overall, ARDS (Ver. 5.0) performed well in estimating the field-size distribution of undiscovered oil and gas resources in the 18 basins and subbasins. The aggregate volume of undiscovered petroleum resources was characterized by using histograms of the distribution of resources and the following five statistics: the mean, the 80% trimmed mean, and the 10,50 (median), and 90 quantiles. More than 38 billion barrels of oil equivalent (BOE) in fields that contain more than one million BOE individually were forecast as remaining to be discovered. The largest basin, the Campos (Brazil), is forecast to contain nearly 10 billion BOE undiscovered resources. The East Venezuela Basin (excluding the Furrial Trend) is forecast to contain about 8 billion BOE; the Austral-Magallanes Basin (Argentina and Chile), about 7 billion BOE; and the Napo (Colombia and Ecuador) and the Neuquen (Argentina) Basins, between 3 billion and 4 billion BOE. A subset of these basins that illustrate the increased flexibility of ARDS are discussed.     

Estimation of the potential supply of U.S. oil by life cycle and learning models

Two methods of estimating potential U.S. oil supply are reported: life cycle analysis of updated (1987) oil production data, and an analysis based on learning curve modeling of discovery rates. Based on these analyses, potential U.S. (lower 48 plus Alaska) oil supply (ultimate recoverable oil) is estimated to be 222 billion barrels. A rough inference of the economic reference for this potential oil supply is an oil price of about $20/bbl (1989 dollars).     

A New Reserve Growth Model for United States Oil and Gas Fields

Reserve (or field) growth, which is an appreciation of total ultimate reserves through time, is a well-recognized phenomenon, particularly in mature petroleum provinces. The importance of forecasting reserve growth accurately in a mature petroleum province made it necessary to develop improved growth functions, and a critical review of the original Arrington method was undertaken. During a five-year (1992–1996), the original Arrington method gave 1.03% higher than the actual oil reserve growth, whereas the proposed modified method gave a value within 0.3% of the actual growth, and therefore it was accepted for the development for reserve growth models.During a five-year (1992–1996), the USGS 1995 National Assessment gave 39.3% higher oil and 33.6% lower gas than the actual growths, whereas the new model based on Modified Arrington method gave 11.9% higher oil and 29.8% lower gas than the actual growths. The new models forecast predict reserve growths of 4.2 billion barrels of oil (2.7%) and 30.2 trillion cubic feet of gas (5.4%) for the conterminous U.S. for the next five years (1997–2001).     

An assessment of oil supply and its implications for future prices

This paper examines three issues related to both the U.S. and world oil supply: (1) the nature of the long-term, postpeak production profile for the U.S. and, by inference, other regions (the Hubbert curve is used as a “strawman” model); (2) implications on U.S. energy security of using a modified Hubbert-type conceptual model of prepeak production, testing the adequacy of Latin America to be the primary source of U.S. oil imports; and (3) the cyclic behavior of oil prices. it shows that U.S. production will exhibit a more attenuated decline than that simulated by the Hubbert curve and not decline to zero. it asserts that U.S. production is better predicted by past reserves than past production, but that this argument does not apply to nations that keep a much larger proportion of reserves in the ground. Such nations could considerably expand production without any growth in reserves. The paper concedes that the potential total production for these nations could be examined with a Hubbert curve model linked to reserves, but with great uncertainty. Such an uncertain optimistic forecast predicts that the cumulative production of Latin America could far exceed that of the United States. Nevertheless, a statistical model of oil prices since 1870 implies that real wellhead oil prices in the United States are on a long-term upward path, underlying a much more “noisy” cyclical pattern estimated to include 22- and 27-year cycles. The statistical model predicts a severe oil shock within a few years (of 1998) but also predicts that through 2030, real oil prices will not reach 1981 levels again. The paper examines U.S. and world trends in seismic exploration, drilling locations and depths, drilling costs, oil/gas reserves, oil/gas use rates, and oil demand. After taking these factors into consideration, it concludes that the statistical model of oil prices cannot be disputed, despite its lack of basis in economic theory.     

A Bootstrap Approach to Computing Uncertainty in Inferred Oil and Gas Reserve Estimates

This study develops confidence intervals for estimates of inferred oil and gas reserves based on bootstrap procedures. Inferred reserves are expected additions to proved reserves in previously discovered conventional oil and gas fields. Estimates of inferred reserves accounted for 65% of the total oil and 34% of the total gas assessed in the U.S. Geological Survey's 1995 National Assessment of oil and gas in US onshore and State offshore areas. When the same computational methods used in the 1995 Assessment are applied to more recent data, the 80-year (from 1997 through 2076) inferred reserve estimates for pre-1997 discoveries located in the lower 48 onshore and state offshore areas amounted to a total of 39.7 billion barrels of oil (BBO) and 293 trillion cubic feet (TCF) of gas. The 90% confidence interval about the oil estimate derived from the bootstrap approach is 22.4 BBO to 69.5 BBO. The comparable 90% confidence interval for the inferred gas reserve estimate is 217 TCF to 413 TCF. The 90% confidence interval describes the uncertainty that should be attached to the estimates. It also provides a basis for developing scenarios to explore the implications for energy policy analysis.     

皖南国际文化旅游示范区旅游经济差异分析研究

利用极差、标准差、变异系数、基尼系数、赫芬达尔系数、首位度等方法,以2000~2013年皖南国际文化旅游示范区各地市的国内旅游收入、国际旅游收入以及旅游总收入为分析对象,揭示皖南国际文化旅游示范区区域旅游经济差异的时空特征。结果表明：① 皖南国际文化旅游示范区旅游发展规模呈现不平衡态势,各地市间绝对差异较大,相对差异逐渐减小;② 示范区内各地市的国内旅游收入差异和旅游总收入差异小于国际旅游收入差异;③ 2000~2013年皖南国际文化旅游示范区国内旅游收入和旅游总收入的基尼系数介于0.30~0.41之间,处于相对合理区间,国际旅游收入的基尼系数介于0.50~0.67之间,差距较大,甚至很悬殊;④ 国内旅游收入和旅游总收入城市首位度指数始终介于1.2~2.2之间,相对较大,第1位城市对第2位城市形成稳定的规模优势,而国际旅游收入城市首位度指数大部分时间介于3.0~9.5之间,第1位城市对第2位城市形成绝对的压倒性的规模优势。通过对皖南国际文化旅游示范区旅游经济差异成因进行分析,表明区域旅游经济规模与旅游资源禀赋、旅游基础设施建设、交通区位条件好坏、政府政策支持以及经济发展水平高低之间的关系密不可分。     

Changing central local relation in post reform China: a geographical perspective

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SALES TAX AS PROPERTY TAX RELIEF? THE SHIFTING ONUS OF LOCAL REVENUE GENERATION

Local governments are under pressure to develop alternative revenue sources to their already strapped property tax bases. Throughout the 1970s, municipal governments nationwide restructured their local taxes by substituing sales tax for property tax revenue. A tax accounting model identified two sources of sales-for-property tax substitution: changes in the tax rates and normal economic growth and decline. Most of the sales-for-property tax substitution experienced in Illinois city finance was attributable to economic change. The critical determinant of this substitution appreared to be the municipality's share of the regional retail market. Cities in higher density metropolitan areas were less likely to experience sales-for-property tax substitution through economic growth than those cities in lower density, less competitive environments.     

Kansas Energy Sources: A Geological Review

Kansas produces both conventional energy (oil, gas, and coal) and nonconventional (coalbed gas, wind, hydropower, nuclear, geothermal, solar, and biofuels) and ranks the 22nd in state energy production in the U.S. Nonrenewable conventional petroleum is the most important energy source with nonrenewable, nonconventional coalbed methane gas becoming increasingly important. Many stratigraphic units produce oil and/or gas somewhere in the state with the exception of the Salina Basin in north-central Kansas. Coalbed methane is produced from shallow wells drilled into the thin coal units in southeastern Kansas. At present, only two surface coal mines are active in southeastern Kansas. Although Kansas has been a major exporter of energy in the past (it ranked first in oil production in 1916), now, it is an energy importer.     

Oil resources for the next century: What's ahead?

Proven reserves of liquid hydrocarbons are now assessed at between 950 and 1,000 billion barrels, depending on the source. Their life expectancy at the current rate of world production is about 41 to 45 years. This lifetime is much longer than what was predicted in both 1970 and 1980. However, this wealth of resources does not necessarily mean that the security of oil supplies is guaranteed for all countries. Oil reserves are unequally distributed from a geopolitical standpoint. Reserves and output are mainly due to big fields (with more than 500 million barrels of initial reserves).Though oil supplies seem to be ensured for the coming 30 to 40 years, what does the picture look like beyond 2020–20307 The increased lifetime of proven oil reserves has been apparent only in the last 10 to 20 years. The considerable increase in proven oil reserves reported after 1986 is, in fact, mainly due to revisions and extensions, rather than to new sources of oil: conventional oil (with the price per barrel of oil on the order of $20 and recovery rate around 30 percent) remaining to be discovered today; oil resources stemming from an improvement in recovery rate; oil resources resulting from exploitation of new zones, such as deep sea zones; and unconventional types of oil, such as extra-heavy crudes, tar sands, shale oils, and liquid hydrocarbons from chemical-enhanced oil recovery methods.     

Resource taxation and sustainability: A CGE model of the Czech Republic

Resource use by a country is considered in the context of a production relationship. Resources include natural, produced, and human capital. The taxation of each of these resource groups has an impact on the efficient use of these inputs through changes in the relative prices. A computable general equilibrium model (CGE) of the Czech Republic is used to evaluate the impact that various revenue neutral tax structures have on the allocation of economic activity throughout the economy. A Hicksian welfare measure is used to determine the impact on society’s welfare of revenue neutral shifts in taxes. The results demonstrate that the change in the tax structure will result in a welfare improvement by as much as 5% for the Czech Republic. The results provide insight into the role that “getting the prices right” has on sustainability. Although the term “sustainable development” was first introduced in a report by the International Union for the Conservation of Nature and Natural Resources in 1980 it did not gain significant notoriety until the Brundtland Commission report in 1987. For a more detailed discussion see Jamieson, 1998.     

Transverse Eco-compensation Standards for Water Conservation: A Case Study of the Middle Route Project of South-to-North Water Diversion in China

In China, the distribution of water resources is incompatible with the development of productivity. The construction of South-to-North Water Diversion Project has achieved inter-basin water diversion, and the project can alleviate the uneven distribution of water resources phenomenon effectively. However, in recent years, the aggregate effects of water pollution and water resource shortages have been serious. Establishing transverse eco-compensation mechanisms becomes the key method to achieve sustainable use of water resources. Based on statistical and questionnaire data, this paper uses the Opportunity Costs Method and Willingness to Pay approach to establish a transverse eco-compensation standard calculation model for the Middle Route Project of the South- to-North Water Diversion. The results show that the upper and lower limits of the transverse eco-compensation standard for the Middle Route Project is $2.52 billion and $2.20 billion every year, respectively. However, the paying and receiving standards varied widely among different compensation payers and compensation receivers. Meanwhile, the significant factors influencing the paying willingness of the receiver area citizens were age, education level, average revenue per month, knowledge about the South-to-North Water Diversion Project and recognition of the importance of eco-environmental integrity. This study began with a theoretical analysis, then analysed related problems related to calculating transverse eco-compensation standards for the Middle Route Project of the South-to-North Water Diversion by an empirical study. This empirical study helps to establish effective transverse eco-compensation mechanisma and promotea the development of effective policies and legislation.     

Assessment of Alaska’s North Slope Oil Field Capacity to Sequester CO2

The capacity of 21 major fields containing more than 95% of the North Slope of Alaska’s oil were investigated for CO₂ storage by injecting CO₂ as an enhanced oil recovery (EOR) agent. These fields meet the criteria for the application of miscible and immiscible CO₂-EOR methods and contain about 40 billion barrels of oil after primary and secondary recovery. Volumetric calculations from this study indicate that these fields have a static storage capacity of 3 billion metric tons of CO₂, assuming 100% oil recovery, re-pressurizing the fields to pre-fracturing pressure and applying a 50% capacity reduction to compensate for heterogeneity and for water invasion from the underlying aquifer. A ranking produced from this study, mainly controlled by field size and fracture gradient, identifies Prudhoe, Kuparuk, and West Sak as possessing the largest storage capacities under a 20% safety factor on pressures applied during storage to avoid over-pressurization, fracturing, and gas leakage. Simulation studies were conducted using CO₂ Prophet to determine the amount of oil technically recoverable and CO₂ gas storage possible during this process. Fields were categorized as miscible, partially miscible, and immiscible based on the miscibility of CO₂ with their oil. Seven sample fields were selected across these categories for simulation studies comparing pure CO₂ and water-alternating-gas injection. Results showed that the top two fields in each category for recovery and CO₂ storage were Alpine and Point McIntyre (miscible), Prudhoe and Kuparuk (partially miscible), and West Sak and Lisburne (immiscible). The study concludes that 5 billion metric tons of CO₂ can be stored while recovering 14.2 billion barrels of the remaining oil.     

Recent Trends in Geography Education in Louisiana

Geography at elementary and middle schools in Louisiana, USA., remains a social studies strand along with civics, economics, and history, with no state-required geography course at any level. But because schools may require more geography than the state standard, this research examines the extent to which K–12 students are exposed to geography in Louisiana, using an electronic survey and an interview with state department of education officials. Results suggest that geography remains underemphasized, but the 2011 implementation of new social studies standards, the Advanced Placement Human Geography course, and other initiatives offer promise for more geographically literate Louisiana citizens.     

The impact of slow growth policies on local economies: Through housing boom and bust

This case study considers the economic implications of various growth policies in the Sacramento region over the last decade. Counties and cities throughout the Sacramento region have varying policies and attitudes toward residential and commercial growth. Over the last decade we have seen extremes in development in the region, from the Roseville area which experienced a residential and retail explosion, to Davis, which has restricted growth to relatively few projects. Growth has impacted property and sales tax revenue, and city and county expenditures. Changes in the housing market and the economy over the past few years have had a large impact on new construction activity. This paper examines how cities and counties in the Sacramento region have weathered the housing boom and bust, based on their growth policies during the past decade. The relationship between growth policies, measured by building permits, local government revenue, housing markets, and employment is assessed. Comparisons are presented through charts and panel data regression. Rapid development leads to higher levels of sales tax revenue, coupled with greater volatility in sales tax revenue. Employment rises more quickly in areas that have a high level of non-residential construction relative to residential construction.