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The May Petroleum Technology Forum will be held on Tuesday, May 13, 2008 at the Long Beach Petroleum Club. Dave Mercier of the Statle Lands Comission will review the California State Lands Commission’s cash flow sources and revenue distribution. A complete abstract and bio follows.
California State Lands Commission’s
Cash Flow Sources and Revenue Distribution
By Dave Mercier, State Land Commission
Oil and gas production is the largest source of revenue from California’s sovereign lands. Its value to the State goes well beyond the generation of non-tax revenue as it provides employment and benefits to local economies and reduces the need to purchase foreign oil and the risk of a tanker spill from transporting foreign oil. The tidelands portion of the Wilmington Oil Field, primarily the Long Beach Unit (LBU), has produced $4.5 billion in State revenues since 1956. Oil and gas production from offshore leases and from natural gas leases beneath navigable rivers has generated more than $1.6 billion in royalty revenue for the State since 1930. California leads the nation in the use of geothermal energy to generate electricity. The world's largest geothermal field, The Geysers, about 75 miles north of San Francisco and geothermal resources on State lands in the Imperial Valley have generated more than $124 million since 1972. Hard rock mineral resources on State lands also generate royalty and rent. About $10 million has been collected since 1930 from mineral extraction on both sovereign lands and school lands. At present, more than $400,000 is collected annually. The State’s royalty interests and its shares in tidelands net profit interests are estimated to provide the State in FY 2007/08 over $400 million.
This presentation will focus on the various sources of revenue received, how this money is used and its effect on the State’s budget, current and past. And it will cover the impact that this more than $8.0 billion has had on California’s economy and infrastructure.
Mr. Mercier has published numerous technical papers and has presented many papers throughout the United States on maximizing value using a royalty rate that slides with oil price. California was the first state to employ this type of royalty. Prior to his current duties, Mr. Mercier was an Operations Supervisor, where he helped develop and receive funding for California’s Safety Assessment Program.
Prior to joining the State Lands Commission, Mr. Mercier worked as an environmental consultant for TRC, a process engineer for Mobil Oil Company and a Commodity Trader. Mr. Mercier earned a Bachelor’s of Science degree in Petroleum Engineering from USC and an MBA (finance) from CSU and is certified in Financial Risk Management (CRM).
Richard Finken, Forum Chairperson: 562-570-3961 or by email email@example.com
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