STATES HAVE ALSO TAKEN ACTION TO PROVIDE RELIEF TO DOMESTIC OIL PRODUCERS ALABAMA KANSAS - LOUISIANA - - The "privilege tax" on Enhanced Oil Recovery (EOR) production was reduced from 8 percent to 4 percent in 1985. The Kansas Corporation Commission reduced electricity rates for oil and gas leases, cutting MISSISSIPPI The severance tax for carbon dioxide projects was reduced in 1984, as an incentive to EOR production. Severance tax on oil was reduced from 6 percent to 5 percent for conventional oil and from The state is participating in a major study to evaluate the benefits from a tertiary recovery Oil Recovery incentives. The Oklahoma Corporation Commission reduced electricity rates for oil and gas leases, thus The Texas Railroad Commission changed its well-plugging rules to allow inactive wells to remain unplugged for up to 1 year, rather than 90 days. - 15 INTERNATIONAL COOPERATION AMONG OIL-CONSUMING NATIONS IS ESSENTIAL There is but one, integrated world oil market. A barrel of oil or energy conserved, produced (whether nuclear, coal, gas or renewables), or stocked in one nation helps all other nations to reduce collective dependence on insecure oil supplies. Conversely, overdependence on a single source of supply, even by one nation, has a negative affect on the energy security of other nations. - The energy security concerns created by the location of about 60 percent of the world's cheap oil reserves in the Persian Gulf -- a potentially unstable region are concerns for all oil-consuming nations. No individual country, not even one as large and economically powerful as the United States, can insulate itself from the impacts of a major oil supply disruption with attendant oil price increases. To achieve the goal of adequate energy security requires international cooperation among oil-consuming nations. The International Energy Agency (IEA) was established in 1974 to deal with international energy issues. The agency has been instrumental in preparing participant countries to deal with, and preferably prevent, energy security threats by providing a forum for the development and implementation of cooperative policies among member countries. In 1983, IEA member countries agreed to guard against increased vulnerability from reliance on insecure energy supplies and, in particular, to avoid undue dependence on any one source of natural gas imports and to obtain future gas supplies from secure sources. In 1984, IEA participants reaffirmed their commitment to the importance of adequate government oil stocks and early coordinated stock draw in the event of a supply disruption. In 1985, IEA energy ministers, largely in response to a strong stand taken by Secretary of Energy Herrington, made considerable progress toward implementing an effective market-based international energy agenda. The challenge now is to maintain the momentum of the 1985 agreements and actively strengthen them in response to the dramatic energy events in the spring of 1986 the world oil price collapse . - Chernobyl and 16 AGENDA FOR INTERNATIONAL COOPERATION INCREASE IEA GOVERNMENT STRATEGIC OIL STOCKS AND AVOID GOVERNMENT INTERVENTION IN MARKETS AND REMOVE BARRIERS TO ENERGY TRADE AND PRODUCTION - SEEK A BALANCED AND DIVERSIFIED ENERGY SUPPLY SYSTEM INCLUDING DIVERSIFICATION OF OIL AND GAS SUPPLIES FROM INSECURE SOURCES SEEK PRODUCTIVE COLLABORATION ON COSTLY ENERGY RESEARCH AN DEVELOPMENT THE UNITED STATES SUPPORTS A STRONG INTERNATIONAL ENERGY AGENDA The United States supports a strong market-based international energy agenda: - Government Stockpiles The most cost-effective strategy to cope with disruptions - Avoid Government Intervention and Remove Barriers to Trade The U.S. government A Balanced and Diversified Energy Supply System -- The U.S. supports actions to - The U.S. International Collaboration on Energy R & D The U.S. remains a strong supporter o This fall and winter, Secretary of Energy Herrington and other government |