As I read the business section of a paper, July 3rd, it struck me as very interesting three of the articles were about oil. I think our energy policy is as screwed up as our foreign policy, and that’s saying something. John Stossel has mentioned our million dollar outhouse several times to everyone’s head-shaking laugh, only in America. We’ve spent millions studying billboards and prostitutes in foreign countries. Some funny stuff, makes Leno’s job easier. But when you talk about the policy of the United States, it’s billions, not millions that are in the punch-line. Ex. our foreign policy, the billions we have given away to a world where those nations that like us seem to be the minority. But wait, there’s even more… How many billions(trillions?) have we paid to nations hostile or resentful to the US for the privilege of using their oil instead of our own? Just last week, I read a story about a Dubai diplomat being robbed in London. He had withdrawn some spending money to go “shopping”, two million pounds of spending money. (1)
Those articles:(memory, no links)
China looks to invest in Canada’s tar sands
Cuba set to start deepwater drilling between Cuba and the Florida Keys
Saudia”s post record profit due to high oil prices
Does anyone think China or Cuba cares more about the environment than the US? How many millions of Chinese are trading in their bicycles for automobiles? The US is prohibited by law from assisting Cuba if there is a spill. We are also prohibited from drilling for the oil that by international law, is ours, right next to Cuba’s, including a relief well if they have a blowout. Way to protect those Florida reefs!!!
I think the dominate factor in our energy policy has become the green movement. Pick any form of energy and there’s some tree-hugging group with their lawyers fighting it as if it’s the end of the world. I’m sure you’ve all read some of them making remarks such as humans being the biggest blight on nature or rat=cat=pig=boy, all lives are of equal value. They are as extreme as any terrorist, some even making the FBI’s list on threats to the US. And somehow, these wackos are able to influence our entire nation. ANWR is nothing but a hellhole for every species on earth. A swamp one month out of the year, frozen most other months. Even polar bears avoid it because there’s nothing else there for them to eat. So how is it ANWR had to be protected from anything that might damage it’s ecosystem? The only answer, they don’t care about ANWR, they just want to stop us from getting and using that oil.
Why do our elected officials go along with what they know to be a lie? I will give Pelosi credit, that she probably does believe she was “saving the world.” Most others, I think only consider the cost/benifit to themselves. Remember the Civil War was fought because of the tariffs forced on the south that was breaking their economy. The north used its political power for economic gain. And aren’t Alaska and Texas the main oil producers in the US? Can the US’s screwed up energy policy really be another civil war brewing, blue state vs red state? Obama and Reid keep talking about the obscene profits oil companies make and how we need to eliminate their tax breaks. I’m OK with that, cut out their tax breaks along with everyone else, level that playing field! I wonder how the Honorable Mr. Reid would feel?
Minerals Mined on Federal Land Spared Taxes, Aided by Senator Reid
AP May 17: Senate Majority Leader Harry Reid, D-Nev., speaks to reporters as the Senate votes to continue tax breaks for oil companies, at the Capitol in Washington.
While Democrats rip into oil and gas companies for failing to pay their “fair share” because of tax breaks Congress gave them, another special interest break they’re not talking about is the billions of dollars worth of gold, silver, uranium and other minerals that mining companies take off federal lands for which they pay nothing.
“They don’t pay a dime, not a penny for the gold and uranium they remove from public lands,” says Steve Ellis of Taxpayers for Common Sense. “Virtually every other country in world charges a royalty on hard rock minerals. It is absurd that we don’t do this.”
Both mining and oil companies pay corporate taxes, and both get generous write-offs in the tax code.
But mining companies get two huge subsidies oil companies do not: leases and royalties.
Mining entities pay no more than $5 an acre for land from which they extract billions of dollars worth of minerals. By contrast, multinational oil and gas firms are required to competitively bid against one another just for the right to drill on specific leases. Those bids typically pay taxpayers from tens to hundreds of millions of dollars, depending on how much oil a company believes is in the field.
A royalty or fee represents an annual percentage the federal government charges based on the value of the resource extracted from public lands. For oil and other fuel sources, the numbers are in the double-digits.
The government receives 12.5 percent in royalties for onshore oil and gas while the royalties for offshore drilling amount to18.75 percent. For coal, that number is 8 percent for underground mining and 12.5 percent for surface mining.
For gold, silver, uranium and copper mining: 0 percent
Reformers in Congress tried to raise the last figure but failed.
In 1993, the House passed a bill imposing an 8 percent royalty, but Sen. Harry Reid, D-Nev., helped kill an agreement in the Senate. In 2007, West Virginia Rep. Nick Rahall helped pass a bill in the House that imposed a 4 percent royalty on gross revenue on existing operations and 8 percent on new operations. Again Reid stepped in, saying the House bill “won’t stand over here.”
Since taking office, Reid has received $750,000 in campaign contributions from the mining industry, according to the Center for Responsive Politics. That number includes $127,000 from Nevada’s two largest gold producers in the 2010 election. Together, those two companies had profits of $5 billion last year yet they paid taxpayers nothing for minerals taken off public lands.
According to Yahoo Finance, three of the 10 most profitable industries in the U.S. right now are in mining, including copper, gold and silver, which enjoy a 47 percent net-profit margin. Oil and gas exploration, by contrast, ranks 50th with a net margin of 11 percent.
Yet oil and gas are singled out, particularly by Reid.
“We should all agree, in the interest of fairness, common sense and saving taxpayer money that we can cut out corporate welfare to those big oil firms who need it the least,” Reid said last week.
President Obama weighed in on Saturday, noting that the “American people shouldn’t be subsidizing oil companies at a time when they’re making near-record profits.”
Gold and silver both closed last week near record highs.(2)
Harry Reid is demogoguing the issue to death:
“My Republican colleagues have walked away from the negotiating table when we were nearing a solution and so close to disaster,” Senate Majority Leader Harry Reid said Tuesday. “Why? To protect oil companies. To protect the owners of yachts and corporate jets. To protect corporations that ship jobs overseas. To protect millionaires and billionaires from paying their fair share.”
Except, as Politico points out, the cuts Reid is skewering the GOP for not making don’t amount to a hill of beans:
The reality is that yacht and jet provisions add up to very little – hardly a hill to government bean counters – and they’re certainly not the magic key that will unlock a deal to raise the nation’s debt limit.
Cuts to oil company subsidies could bring in between $20 billion and $40 billion over 10 years, taxing hedge fund managers’ earnings as regular income would amount to roughly $20 billion more over a decade, and the much-heralded jet tax would yield an additional $3 billion, according to various estimates from Democratic and Republican sources.(3)
Another funny for Lenno & co, global warming advocates are now blaming China for recent global cooling. Do they know about China offering to build Canada’s new oil pipeline to the Pacific? Since the Obama administration has not approved the pipeline project for several years, could be others want that tar sand oil.(4)
And then the President released 30 million barrels of oil from the Strategic Petroleum Reserve. Why do we have a “strategic reserve”? Sounds very military and important, doesn’t it? Not something one would use for political games. President Obama explained it was to offset the reduced supply brought about due to the Libya conflict. He failed to mention Saudi Arabia increased their production when the conflict began to prevent any disruption of the oil supply, They later reduced their output because demand had dropped.
White House officials said the oil-sale decision was prompted by the Libyan civil-war, which cut the flow from the Libyan oil-fields. “We’re focused on the disruption of supply,” said a White House official said June 23. “140 million barrels have been taken off the market since the Libyan disruption… it has had effect on the tightness of the market,” he said.
The oil-sale was intended to offset the normal price increases that come during summer, as people take summer vacations, said the White House official. (5)
Oh, that makes a little more sense, the normal price increase around the 4th is now a strategic issue. Will Labor Day require 60 million to be released? Hey, any excuse to party is good with me!. BUT, it’s gonna cost you and me. We think about the cost every time we fill out tank, we don’t think about the cost of the strategic reserve oil. All taxpayer paid for that, did we get a good deal?
* The SPR’s release of 30 million barrels of oil was sold to oil refiners and traders at more than $10/bbl BELOW market. Can the US taxpayer afford the $300mm subsidy?(5)
Happy Fourth of July everyone, we just added three hundred million dollars to our debt. Was it good for you?
President Barack Obama’s sale “did not make a damn bit of difference,” said Dan Kish, vice president for policy at the Institute for Energy Research. Eight days after the announcement, “the price of oil was higher than it was the day he announced” the release of oil from the reserve, Kish said.
Oil prices fell roughly $4 a barrel to roughly $91 a barrel when the announcement was made. Since then, prices have climbed up to near $100 a barrel, according to an July 7. Gas prices rise and fall in line with oil prices, and the national average price nudged up 1.4 cents on Thursday to reach $3.58 a gallon, according to AAA and the Oil Price Information Service. That’s a price increase of 4.2 cents per gallon from a week ago.
“Crude prices are back to where they were,” said Rayola Dougher, senior economic adviser at the American Petroleum Institute. “It was just a temporary blip.”
Prices won’t come down, she said, until the federal government allows greater use of new energy resources being found in the United States and Canada. We need policymakers to face the facts, and make sure we have reliable, affordable supplies of fuel,” she said.(6)
I think I’ve expressed my opinion before that words matter. This is especially true of the supposed “leader of the free world”. I have stated Obama announcing his troop draw-down from Afghanistan was a mistake, you don’t tell your enemy what you plan to do. Anyone noticed the increase in attacks? American soldiers are dying because he wants to help his re-election bid. I can’t recall him saying anything about the US increasing its domestic oil production, sunshine and windmills are all the only energy source for his positive words. Ya’ll remember that warmonger that got congressional approval for his wars? Maybe Obama should borrow a few of his speeches….
In June 2008, President George W. Bush pushed down oil prices by $9.26 a barrel during his speech in which he announced vigorous new onshore and offshore oil-exploration and production initiatives, said Kish. Prices continued downwards, he said, because “people said ‘Finally the United States is getting off its ass, and instead of just talking about increasing oil production, they’re doing something about it.’”
The administration recognizes that increased supplies reduces prices, but they continue to restrict U.S. energy supplies, said Dougher. For example, Obama’s restrictions on oil-drilling in the Gulf of Mexico has reduced oil-supply by roughly 60 million barrels, and its refusal to approve a planned oil-pipeline from Canada is cutting future oil-supplies by nearly one million barrels a day, she said.(6)
So SUFA, have I made a decent case? Oil companies are not good or evil, but they are paying much more than their fair share of taxes. This cost is passed on to you and I, while WallStreet, gold miners and others get their special favors. And then there is all those Middle East countries with oil providing them extravagant revenue, which I would not mine except it seems to somehow also aid the terrorists. How many Saudi’s were in the 9/11 attacks? Maybe if they had less revenue, they might find other interest than attacking the US? America can choose it’s pathway, and we are right now. Door #1, Reid and Obama say we have to punish big oil. Is there a door #2?
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