4est_4est_Gump
Run Forrest! RUN!
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No, they have Mitt and the McCain strategy.
Winning the hearts and minds of the moderates by taking another piss on their base...
Green Energy
- Thread starter RightField
- Start date
No, they have Mitt and the McCain strategy.
Winning the hearts and minds of the moderates by taking another piss on their base...
RightField
Literotica Guru
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- Jun 30, 2003
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Rising Gasoline Prices: Separating Myth from Fact
March 19, 2012
House of Representatives
Myth: Domestic oil production is up because of President Obama.
Fact: Domestic oil production is up in spite of President Obama. One of the President’s very first initiatives in early 2009 was to cancel oil leases on onshore federal lands and to delay the offshore leasing plan, all to ultimately cancel 5 offshore leases even before Deepwater Horizon. The administration’s hostility toward domestic drilling remains in place to this day with a 2012-2017 Offshore Lease Plan Proposal that imposes by Obama DOI actions the same moratorium voters thought was lifted in 2008. The President likes to boast that American oil production has risen, but that is due to production increases on private and state lands. Production on federally controlled lands actually declined from 2010 to 2011 by 14 percent.
Myth: America has only 2 percent of the world’s oil, so more drilling won’t make a difference.
Fact: The 2 percent figure is deliberately misleading. It represents how much oil the U.S. has if we do not look for any more. Vast onshore and offshore areas have been placed off-limits by the federal government, and as a result, it is not well known how much oil is there.
Every place where we have been allowed to drill – like the Central and Western Gulf of Mexico and Prudhoe Bay in Alaska – the initial estimates of oil reserves proved far below actual production. And technological advances are constantly increasing the amounts that can be tapped – but only if the federal government does not prevent us from exploring.
North Dakota’s Bakken oil field is a perfect example. Thirteen years ago, its proven reserves were 1/25th of what they are today, and that number is growing. If U.S. reserves were allowed by the government to expand by the same amount, our reserves would be over twice those of Saudi Arabia.
A proven oil reserve is a figure that is obtained by an oil producer once they have fully explored and developed an oil field. Using the president’s definition, the U.S. has 28.4 billion barrels of oil. That equates to 2 percent of the world’s oil. But if you look at all the untapped resources, the U.S. holds trillions of barrels of oil. The Obama administration says we have only 2 percent of the world’s oil because that’s all they will let us have.
Myth: The percentage of imported oil has declined thanks to President Obama.
Fact: Oil imports have declined because the weak economy has suppressed demand –14 million Americans don’t have jobs to drive to and others cannot afford gasoline at half the prices of Europe that Energy Secretary Chu said he thought Americans should pay. Increased domestic production from private and state-owned lands has also helped, but government production declined last year. To meet our long-term needs and reduce reliance on oil from unstable and unfriendly countries, we need to increase domestic production on federal lands and waters and approve the Keystone XL pipeline project to allow more Canadian oil to reach the U.S.
Myth: Alternatives like electric cars are a big part of the solution and reduce the urgency to increase oil supplies or take other steps to rein in the price of gasoline.
Fact: These alternatives are simply not available, or affordable, for families today. Research and development of alternative fuels and vehicles is important, but we must be realistic about it. It’s going to take many more years before cost effective and technologically viable alternatives will be ready to gain a significant market share to meet American family needs. All analysis, including the Obama administration’s own, tells us the age of gasoline is going to be with us for quite a while longer, and we need to do all we can to ensure that it is as affordable as possible until such future time as alternatives can carry the load.
Myth: Price gouging by big oil companies is behind the rise in gas prices.
Fact: Past spikes in gas prices have led to numerous investigations by the Federal Trade Commission and other agencies. These investigations have repeatedly exonerated the oil companies of illegal conduct while pointing to the real causes such as costly regulations. While there is nothing wrong with looking into the possibility of price gouging by oil companies, there is something very wrong with obsessing over it to the exclusion of other, more likely causes of high prices.
Myth: Tapping the Strategic Petroleum Reserve (SPR), as the President did last June and may do again, is a good response to rising gas prices.
Fact: The SPR is a stockpile of oil set aside for use in an emergency, such as a disruption of oil imports from the Middle East. It can only last for a matter of months, and then would need to be replenished. Moreover, its use for political purposes threatens our security in the event of a real national security threat. In contrast, increased domestic drilling on federal lands or Keystone XL would provide a genuine addition to the nation’s oil supply, and one that would last for decades instead of mere months. Increased domestic drilling and Keystone XL are real solutions for addressing high prices while tapping the SPR is a short-term political gimmick.
Myth: Regulatory costs are a minimal part of the price of gasoline.
Fact: The Environmental Protection Agency imposes two kinds of regulations impacting motor fuels – measures that seek to reduce emissions from refineries and those specifying the recipe for gasoline. Rather than trying to reduce the cost of existing regulations, EPA is considering adding more of them, such as New Source Performance Standards targeting greenhouse gas emissions from refineries and new Tier 3 regulations mandating ultra-low sulfur gasoline. The cost of current and anticipated future regulations has also contributed to several recent domestic refinery closures.
Myth: EPA’s fuel economy regulations for new cars and trucks are a solution to high gas prices.
Fact: These rules provide no relief until you buy a new vehicle, and are not a substitute for taking steps to reduce gas prices. Further, the higher sticker price resulting from these rules – up to $1,000 by 2016 and $3,000 by 2025 according to EPA, and higher according to outside estimates – raise questions about how many consumers will benefit from them.
Myth: Increased supplies will not bring down prices for years to come.
Fact: The price of oil is not just determined by current supply and demand indicators. It is also set by future expectations of supply. For example, the day President Bush lifted the executive moratorium on the Pacific and Atlantic Coasts, the price of oil dropped $9.26. And prices continued to decline when the Congressional moratorium was lifted. Changes in government policy have significant effects on price, but unfortunately, all signs coming from the Obama administration have assisted in driving up gasoline costs.
Myth: President Obama has approved dozens of new pipelines, including from Canada.
Fact: The Obama administration approved only one oil pipeline from Canada. The disapproval of Keystone XL was the first time a Presidential Permit had ever been denied. It will take more than one pipeline to make sure that the U.S. receives more safe secure supplies from Canada. Unfortunately, his denial may limit the amount Americans will be able to get; the Canadians are now talking to China about exporting their oil there.
Myth: Use it or Lose it. Oil companies are sitting on thousands of unused leases. New areas of exploration shouldn’t be opened until companies drill what they already have.
Fact: Oil and gas leases on federal lands and waters require long lead times to explore and develop — which makes the “Use it or Lose It” argument misleading. Non-producing leases reflect the time – sometimes 5 to10 years or longer – that it takes to identify and drill prospects, evaluate results, to acquire permits, and build and install surface facilities and pipelines.
Just because a company holds a lease does not mean it will ultimately produce energy. In the offshore deep water, the industry commercial success rate is 20%, and in new areas onshore the success rate is 10%. Unsuccessful leases are in the “non-producing” totals. Most unproductive leases already revert to the government, with no return — ever — on investment.
Oftentimes the hold up in moving federal leases from the non-producing category to the producing category is federal government bureaucracy itself. Shell's 6-year plight to explore its Alaska OCS leases is a good example. These leases are classified as “non-producing” by the federal government. According to the Obama DOI, less regulatory burden on state and private lands where the federal government has little to no role is contributing to the dramatic shift in investment away from federal lands. In other words, the federal government is making it too uneconomic to “use it.”
Myth: Wall Street speculators are causing oil and gasoline prices to rise.
Fact: Multiple studies by the federal government and independent economists have demonstrated oil and gasoline prices are determined by fundamental supply and demand. While some assert the growing number of financial speculators in the futures market is evidence of their power to control prices, this repeats the false economic notion that correlation equals causation. Financial participants in the futures market provide crucial sources of liquidity to the marketplace and actually help moderate wild price swings. If physical consumers of oil were the only ones allowed to trade futures contracts, the market would be unable to function.
March 19, 2012
House of Representatives
Myth: Domestic oil production is up because of President Obama.
Fact: Domestic oil production is up in spite of President Obama. One of the President’s very first initiatives in early 2009 was to cancel oil leases on onshore federal lands and to delay the offshore leasing plan, all to ultimately cancel 5 offshore leases even before Deepwater Horizon. The administration’s hostility toward domestic drilling remains in place to this day with a 2012-2017 Offshore Lease Plan Proposal that imposes by Obama DOI actions the same moratorium voters thought was lifted in 2008. The President likes to boast that American oil production has risen, but that is due to production increases on private and state lands. Production on federally controlled lands actually declined from 2010 to 2011 by 14 percent.
Myth: America has only 2 percent of the world’s oil, so more drilling won’t make a difference.
Fact: The 2 percent figure is deliberately misleading. It represents how much oil the U.S. has if we do not look for any more. Vast onshore and offshore areas have been placed off-limits by the federal government, and as a result, it is not well known how much oil is there.
Every place where we have been allowed to drill – like the Central and Western Gulf of Mexico and Prudhoe Bay in Alaska – the initial estimates of oil reserves proved far below actual production. And technological advances are constantly increasing the amounts that can be tapped – but only if the federal government does not prevent us from exploring.
North Dakota’s Bakken oil field is a perfect example. Thirteen years ago, its proven reserves were 1/25th of what they are today, and that number is growing. If U.S. reserves were allowed by the government to expand by the same amount, our reserves would be over twice those of Saudi Arabia.
A proven oil reserve is a figure that is obtained by an oil producer once they have fully explored and developed an oil field. Using the president’s definition, the U.S. has 28.4 billion barrels of oil. That equates to 2 percent of the world’s oil. But if you look at all the untapped resources, the U.S. holds trillions of barrels of oil. The Obama administration says we have only 2 percent of the world’s oil because that’s all they will let us have.
Myth: The percentage of imported oil has declined thanks to President Obama.
Fact: Oil imports have declined because the weak economy has suppressed demand –14 million Americans don’t have jobs to drive to and others cannot afford gasoline at half the prices of Europe that Energy Secretary Chu said he thought Americans should pay. Increased domestic production from private and state-owned lands has also helped, but government production declined last year. To meet our long-term needs and reduce reliance on oil from unstable and unfriendly countries, we need to increase domestic production on federal lands and waters and approve the Keystone XL pipeline project to allow more Canadian oil to reach the U.S.
Myth: Alternatives like electric cars are a big part of the solution and reduce the urgency to increase oil supplies or take other steps to rein in the price of gasoline.
Fact: These alternatives are simply not available, or affordable, for families today. Research and development of alternative fuels and vehicles is important, but we must be realistic about it. It’s going to take many more years before cost effective and technologically viable alternatives will be ready to gain a significant market share to meet American family needs. All analysis, including the Obama administration’s own, tells us the age of gasoline is going to be with us for quite a while longer, and we need to do all we can to ensure that it is as affordable as possible until such future time as alternatives can carry the load.
Myth: Price gouging by big oil companies is behind the rise in gas prices.
Fact: Past spikes in gas prices have led to numerous investigations by the Federal Trade Commission and other agencies. These investigations have repeatedly exonerated the oil companies of illegal conduct while pointing to the real causes such as costly regulations. While there is nothing wrong with looking into the possibility of price gouging by oil companies, there is something very wrong with obsessing over it to the exclusion of other, more likely causes of high prices.
Myth: Tapping the Strategic Petroleum Reserve (SPR), as the President did last June and may do again, is a good response to rising gas prices.
Fact: The SPR is a stockpile of oil set aside for use in an emergency, such as a disruption of oil imports from the Middle East. It can only last for a matter of months, and then would need to be replenished. Moreover, its use for political purposes threatens our security in the event of a real national security threat. In contrast, increased domestic drilling on federal lands or Keystone XL would provide a genuine addition to the nation’s oil supply, and one that would last for decades instead of mere months. Increased domestic drilling and Keystone XL are real solutions for addressing high prices while tapping the SPR is a short-term political gimmick.
Myth: Regulatory costs are a minimal part of the price of gasoline.
Fact: The Environmental Protection Agency imposes two kinds of regulations impacting motor fuels – measures that seek to reduce emissions from refineries and those specifying the recipe for gasoline. Rather than trying to reduce the cost of existing regulations, EPA is considering adding more of them, such as New Source Performance Standards targeting greenhouse gas emissions from refineries and new Tier 3 regulations mandating ultra-low sulfur gasoline. The cost of current and anticipated future regulations has also contributed to several recent domestic refinery closures.
Myth: EPA’s fuel economy regulations for new cars and trucks are a solution to high gas prices.
Fact: These rules provide no relief until you buy a new vehicle, and are not a substitute for taking steps to reduce gas prices. Further, the higher sticker price resulting from these rules – up to $1,000 by 2016 and $3,000 by 2025 according to EPA, and higher according to outside estimates – raise questions about how many consumers will benefit from them.
Myth: Increased supplies will not bring down prices for years to come.
Fact: The price of oil is not just determined by current supply and demand indicators. It is also set by future expectations of supply. For example, the day President Bush lifted the executive moratorium on the Pacific and Atlantic Coasts, the price of oil dropped $9.26. And prices continued to decline when the Congressional moratorium was lifted. Changes in government policy have significant effects on price, but unfortunately, all signs coming from the Obama administration have assisted in driving up gasoline costs.
Myth: President Obama has approved dozens of new pipelines, including from Canada.
Fact: The Obama administration approved only one oil pipeline from Canada. The disapproval of Keystone XL was the first time a Presidential Permit had ever been denied. It will take more than one pipeline to make sure that the U.S. receives more safe secure supplies from Canada. Unfortunately, his denial may limit the amount Americans will be able to get; the Canadians are now talking to China about exporting their oil there.
Myth: Use it or Lose it. Oil companies are sitting on thousands of unused leases. New areas of exploration shouldn’t be opened until companies drill what they already have.
Fact: Oil and gas leases on federal lands and waters require long lead times to explore and develop — which makes the “Use it or Lose It” argument misleading. Non-producing leases reflect the time – sometimes 5 to10 years or longer – that it takes to identify and drill prospects, evaluate results, to acquire permits, and build and install surface facilities and pipelines.
Just because a company holds a lease does not mean it will ultimately produce energy. In the offshore deep water, the industry commercial success rate is 20%, and in new areas onshore the success rate is 10%. Unsuccessful leases are in the “non-producing” totals. Most unproductive leases already revert to the government, with no return — ever — on investment.
Oftentimes the hold up in moving federal leases from the non-producing category to the producing category is federal government bureaucracy itself. Shell's 6-year plight to explore its Alaska OCS leases is a good example. These leases are classified as “non-producing” by the federal government. According to the Obama DOI, less regulatory burden on state and private lands where the federal government has little to no role is contributing to the dramatic shift in investment away from federal lands. In other words, the federal government is making it too uneconomic to “use it.”
Myth: Wall Street speculators are causing oil and gasoline prices to rise.
Fact: Multiple studies by the federal government and independent economists have demonstrated oil and gasoline prices are determined by fundamental supply and demand. While some assert the growing number of financial speculators in the futures market is evidence of their power to control prices, this repeats the false economic notion that correlation equals causation. Financial participants in the futures market provide crucial sources of liquidity to the marketplace and actually help moderate wild price swings. If physical consumers of oil were the only ones allowed to trade futures contracts, the market would be unable to function.
mercury14
Pragmatic Metaphysician
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Those are just partisan talking points. You said you weren't a partisan person.
http://republicans.energycommerce.house.gov/news/PRArticle.aspx?NewsID=9387
I suggest you get your economic news from a legitimate economic news source and not a political propaganda factory.
http://republicans.energycommerce.house.gov/news/PRArticle.aspx?NewsID=9387
I suggest you get your economic news from a legitimate economic news source and not a political propaganda factory.
Last edited:
mercury14
Pragmatic Metaphysician
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RightField
Literotica Guru
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The article does do a good job of correcting the myth's that the democrats would have you believe around energy. If you smart guys are so smart, please take your time and dispel the counterpoints. It's very easy to say "they're just talking points" or I don't believe them because some Republican person believes them" , but that's intellectually lazy, isn't it? Don't believe the points because they're inconvenient?
Here's the link, it's to the House Committee on Energy and Commerce:
http://republicans.energycommerce.house.gov/news/PRArticle.aspx?NewsID=9387
One of the things it reiterates for me is that the Republican approach is built on an objective assessment of the issues and a serious consideration of the alternatives while the democrat position is based on myth, redirection, emotion and deceipt, not to mention their own raft of irrational special interests.
Here's the link, it's to the House Committee on Energy and Commerce:
http://republicans.energycommerce.house.gov/news/PRArticle.aspx?NewsID=9387
One of the things it reiterates for me is that the Republican approach is built on an objective assessment of the issues and a serious consideration of the alternatives while the democrat position is based on myth, redirection, emotion and deceipt, not to mention their own raft of irrational special interests.
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4est_4est_Gump
Run Forrest! RUN!
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As we just saw in the Coal Power/EPA thread, merc is too busy to go look up facts, he just assumes everything a crazy rw says is a lie and then goes on the attack.
Now, if there are any Democrat talking points floating about the electronic world, he's more than happy to employ them in "debate."
http://forum.literotica.com/showthread.php?t=803947
Now, if there are any Democrat talking points floating about the electronic world, he's more than happy to employ them in "debate."
http://forum.literotica.com/showthread.php?t=803947
Last edited:
U
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Byron In Exile
Frederick Fucking Chopin
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The question isn't how many there are but how large they are.
In the 1940's it was still possible that a war could involve the entire world. Now, the wars are small, and most of the world are merely spectators.
"War" now is much less destabilizing to the world economy than it was seventy years ago.
Saudi Arabia, Russia, and Norway, as the top three oil-exporting countries, are no doubt quaking in their boots right now.
Not really. Not incorrect, just myopic.
RightField
Literotica Guru
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Cool. No more war, only minor skirmishes from now on. Can I write that in marble for posterity?
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mercury14
Pragmatic Metaphysician
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Nope, you can't use un-backed partisan assertions as sound evidence and demand that others counter them with facts. You need to back up and get some facts of your own first. If you want to start this, start it in a rational way.
Did you go to college? What did your professors say when you turned in term papers without factual backing?
I value fact and reason, not un-sourced talking points from political websites from either side of the spectrum. If all these talking points are based in fact why isn't anyone posting them?
Stop with your bullshit accusations against me. You constantly tell me what I think in a pathetic attempt to avoid having to deal with my actual points.
When was the last time you saw me spout off a Democratic talking point without backing it? If you can find me doing as much I will gladly provide backing or withdraw my point to mere conjecture.
What you DO see me doing is serving up source data with my points. Remember when you and RF in the Politics of Medicine thread carried on with heaping helpings of baseless lies about the content of the IPAB legislation - and my response was referencing the actual law itself? That's my strategy bro.
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RightField
Literotica Guru
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Yeah, I get it. Any projection about the future by a Democrat is an absolute fact.
Any person disagreeing is merely a "partisan hack" and not to be believed or thought about at all.
It's a democrat philosophy.
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mercury14
Pragmatic Metaphysician
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No that's not what I've said or thought at all. Here you are again telling other people what their thoughts are.
I JUST TOLD YOU what I think and you choose to ignore it in favor of one of your classic straw man fallacies. Your logic is terrible. Go back and read my post and I'll give you a do-over.
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RightField
Literotica Guru
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I know, you're just so misunderstood. Poor you.
Byron In Exile
Frederick Fucking Chopin
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Say, "minor wars."
Like, Panama, Grenada, Falklands, Iraq I, Iraq II, Kosovo, Somalia, Rwanda, Georgia, etc.
No country will attack the US, Russia, China, UK, Germany, Norway, Finland, Spain, Italy, Japan, Australia, etc.
Understand?
Maybe France, though, just because.
4est_4est_Gump
Run Forrest! RUN!
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merc, you're simply un-fucking-believable...
We just got through nailing you for spouting a Democrat talking point in the other thread and here you are demanding you show us one time, JUST ONE, where you use an unsupported Democrat talking point like the EPA and Obama are not shutting down new coal plants...
... this is why we worry about your mental state. That and the lying.
We just got through nailing you for spouting a Democrat talking point in the other thread and here you are demanding you show us one time, JUST ONE, where you use an unsupported Democrat talking point like the EPA and Obama are not shutting down new coal plants...
... this is why we worry about your mental state. That and the lying.
4est_4est_Gump
Run Forrest! RUN!
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How deep down do miner wars occur?
RobDownSouth
BoycotDivestSanctio
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What's this "WE" shit, chief? Got a tapeworm again?
p.s. You did no such "nailing", unless by "nailing" you meant "screamed like a petulant little child when caught lying".
4est_4est_Gump
Run Forrest! RUN!
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When Crazy met Crazier...
RightField
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Isn't this the same conceit that we had after "the Great War?"
Are you sure that we won't enter into any more wars? Are you willing to gambol your life on it? Your freedom?
lol...I lived in France for a while...I understand.
mercury14
Pragmatic Metaphysician
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Yeah you really nailed the shit out of that Straw Man you created.
Your next assignment: Try addressing my actual position instead of making one up for me.
Byron In Exile
Frederick Fucking Chopin
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Any more... "world wars"? Like the "War to End All Wars," i.e. WWI, continued with WWII? (The period between 1918 and 1939 was just an intermission.)
That was the inevitable outcome of the idea that if there were simply a war big and terrible enough, that everyone would come to the realization that it was just a big hopeless waste and give it up.
But what they actually did was give up on the idea that they could control it.
So the control of war passed into other hands.
More responsible hands.
RightField
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I hope you're right. The middle east has been in a state of war for many years now, sometimes big, sometimes small, but seemingly always going on.
RightField
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March 31, 2012
There Obama Goes Again
By Larry Kudlow
As Ronald Reagan famously said, “There you go again.”
Of course, Reagan was blaming Jimmy Carter for launching false attacks during a debate. And that line was so effective, it not only helped Reagan win the debate, but a presidential election that would change American history.
But “there you go again” can apply equally to President Obama. Once again this week, the president was out on the campaign trail bashing and oil and gas companies. And he continued to spread major falsehoods about this industry, which I guess is the polite way to put it.
Obama is obsessed with oil and gas. He is a prisoner of the left-wing environmental groups. And really, he’s extending his leftist class-warfare attack from rich people to successful oil and gas producers.
What seems to have Obama especially steamed is the fact that the conventional-energy companies are profitable. Especially the five largest. So he wants to tax them. He then wants to redistribute their income to his favorite green-energy firms. Sound familiar? I don’t know which is more important to the president -- the fact that he hates fossil fuel or the fact that he hates success. Or that he wants an energy-entitlement state.
But here’s what I do know, factually.
Oil companies have an effective corporate tax rate well above 40 percent. And they operate within one of the highest-taxed industries in America. According to the Tax Foundation, for more than 25 years, oil and gas companies have sent more tax dollars to Washington and state capitals than they earned in profits. That’s a fact.
Single-handedly, oil and gas companies finance over 10 percent of non-defense discretionary spending within the U.S. budget. According to The Wall Street Journal, ExxonMobil, the world’s largest energy firm, paid out $59 billion in total U.S. taxes over the five years prior to 2010 while earning only $40.5 billion in domestic profits.
And Obama wants to raise taxes on conventional-energy firms by somewhere between $40 billion and $80 billion? Whatever happened to the supply-side principle that if you tax something more, you get less of it?
But with gasoline prices headed towards $5 a gallon, and with oil prices over $100 a barrel, virtually the whole country outside of the White House wants more oil, more retail gas for the pump and more energy supplies everywhere in order to bring prices down. Raising taxes won’t do it.
Make no mistake about it: Fossil fuel is going to drive the American economy for decades to come. Green energy is not.
Obama’s other line of attack is that oil companies shouldn’t get any subsidies. They made too much money for that. Well, I’m against oil subsidies. There’s about $90 billion worth in the federal budget. Better to end them, slash corporate tax rates across the board and let the free market decide energy policy and production.
But on the subject of subsidies, so-called renewable-energy subsidies (think Solyndra) are 49-times greater than fossil-fuel subsidies, according to studies by the Congressional Research Service. And the Congressional Budget Office says renewable green energy received 68 percent of energy-related tax preferences in fiscal year 2011, while fossil fuels got only 15 percent. Additionally, oil, natural gas and coal received 64 cents per megawatt hour in subsidies, while wind power alone received $56.29 per megawatt hour. That’s nearly 100-times what fossil fuels got.
By the way, the so-called subsidies that Obama is talking about are really depreciation write-offs for investment. Oil companies get a 6 percent deduction from income. Most manufacturing industries get 9 percent. And every company in the economy is eligible for faster investment write-offs.
Frankly, the most pro-growth corporate-tax policy would be 100 percent cash-expensing for new investment, a slashed corporate tax rate, and no more subsidies, preferences and carve-outs. That would be an unbelievable job-creator.
But President Obama is too busy spewing falsehoods to support his ideological agenda than to take account of the facts. And while he’s at it, one of the greatest, pro-growth revolutions ever is taking place right under his nose. It’s the oil and gas shale miracle, which if left unfettered will turn America and Canada into an energy-independent New Middle East inside of 10 years.
In fact, the collapse of natural-gas prices brought on by this revolution could become one of the biggest tax cuts for the economy in history, making all our industries vastly more competitive, revolutionizing transportation and providing more consumer real income at home.
Obama should quit the demagoguery, stop bashing oil and gas, stop taxing success and let our ingenious, creative, free-enterprise private economy spur America to a new generation of prosperity.
There Obama Goes Again
By Larry Kudlow
As Ronald Reagan famously said, “There you go again.”
Of course, Reagan was blaming Jimmy Carter for launching false attacks during a debate. And that line was so effective, it not only helped Reagan win the debate, but a presidential election that would change American history.
But “there you go again” can apply equally to President Obama. Once again this week, the president was out on the campaign trail bashing and oil and gas companies. And he continued to spread major falsehoods about this industry, which I guess is the polite way to put it.
Obama is obsessed with oil and gas. He is a prisoner of the left-wing environmental groups. And really, he’s extending his leftist class-warfare attack from rich people to successful oil and gas producers.
What seems to have Obama especially steamed is the fact that the conventional-energy companies are profitable. Especially the five largest. So he wants to tax them. He then wants to redistribute their income to his favorite green-energy firms. Sound familiar? I don’t know which is more important to the president -- the fact that he hates fossil fuel or the fact that he hates success. Or that he wants an energy-entitlement state.
But here’s what I do know, factually.
Oil companies have an effective corporate tax rate well above 40 percent. And they operate within one of the highest-taxed industries in America. According to the Tax Foundation, for more than 25 years, oil and gas companies have sent more tax dollars to Washington and state capitals than they earned in profits. That’s a fact.
Single-handedly, oil and gas companies finance over 10 percent of non-defense discretionary spending within the U.S. budget. According to The Wall Street Journal, ExxonMobil, the world’s largest energy firm, paid out $59 billion in total U.S. taxes over the five years prior to 2010 while earning only $40.5 billion in domestic profits.
And Obama wants to raise taxes on conventional-energy firms by somewhere between $40 billion and $80 billion? Whatever happened to the supply-side principle that if you tax something more, you get less of it?
But with gasoline prices headed towards $5 a gallon, and with oil prices over $100 a barrel, virtually the whole country outside of the White House wants more oil, more retail gas for the pump and more energy supplies everywhere in order to bring prices down. Raising taxes won’t do it.
Make no mistake about it: Fossil fuel is going to drive the American economy for decades to come. Green energy is not.
Obama’s other line of attack is that oil companies shouldn’t get any subsidies. They made too much money for that. Well, I’m against oil subsidies. There’s about $90 billion worth in the federal budget. Better to end them, slash corporate tax rates across the board and let the free market decide energy policy and production.
But on the subject of subsidies, so-called renewable-energy subsidies (think Solyndra) are 49-times greater than fossil-fuel subsidies, according to studies by the Congressional Research Service. And the Congressional Budget Office says renewable green energy received 68 percent of energy-related tax preferences in fiscal year 2011, while fossil fuels got only 15 percent. Additionally, oil, natural gas and coal received 64 cents per megawatt hour in subsidies, while wind power alone received $56.29 per megawatt hour. That’s nearly 100-times what fossil fuels got.
By the way, the so-called subsidies that Obama is talking about are really depreciation write-offs for investment. Oil companies get a 6 percent deduction from income. Most manufacturing industries get 9 percent. And every company in the economy is eligible for faster investment write-offs.
Frankly, the most pro-growth corporate-tax policy would be 100 percent cash-expensing for new investment, a slashed corporate tax rate, and no more subsidies, preferences and carve-outs. That would be an unbelievable job-creator.
But President Obama is too busy spewing falsehoods to support his ideological agenda than to take account of the facts. And while he’s at it, one of the greatest, pro-growth revolutions ever is taking place right under his nose. It’s the oil and gas shale miracle, which if left unfettered will turn America and Canada into an energy-independent New Middle East inside of 10 years.
In fact, the collapse of natural-gas prices brought on by this revolution could become one of the biggest tax cuts for the economy in history, making all our industries vastly more competitive, revolutionizing transportation and providing more consumer real income at home.
Obama should quit the demagoguery, stop bashing oil and gas, stop taxing success and let our ingenious, creative, free-enterprise private economy spur America to a new generation of prosperity.
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