Filed under: Economy, Politics, Taxes | Tags: Big Oil, Democrat Demagogues, Gas Prices, Price Gouging
Oh My! The Congressional Democrats are at it again. Today the Senate Judiciary Committee dragged in executives from the American petroleum industry for an imperial inquisition that Chairman Pat Leahy thought would be politically helpful. The price of gas has reached a new high, and Senator Leahy wants to be sure that you are blaming the right people.
They called on the executives to explain high oil prices, and attacked them for their profits and pay packages. ( I’m sure you have noticed the portion of the Constitution that allows Congress to determine how much profit is allowed and to set salaries for businessmen.)
The group from industry was a formidable bunch. John Hofmeister, President of Shell Oil Co., John Lowe, Executive Vice President of Conoco Philips Co., Steven Simon, Senior Vice President of Exxon Mobil Corp., Robert Malone, Chairman and President of BP America, Inc. and Peter Robertson, Vice Chairman of the Board of Chevron Corp. The petroleum executives quickly demonstrated that they were immeasurably better informed and far more public-spirited than their inquisitors.
Because foreign companies and foreign governments control the majority of the world’s oil, most of the price you pay at the pump is what the American oil company has to pay to buy crude oil from someone else. Exxon Mobil refined 2 million barrels per day in 2007. Ninety percent of that was purchased abroad. Exxon Mobil spends nearly $1 billion each day to maintain current operations and make needed capital investments.
On average, Federal and state government taxes account for 15 percent of the cost of gasoline at the pump (And likely much more if you live in Democrat-run state, and much less if you live in a Republican-run state), while oil companies’ profits amount to only 4 percent. So much, senators, for your supposed “price gouging”. Shell’s John Hofmeister explained clearly where the problem lies:
Meanwhile, in the United States, access to our own oil and gas resources has been limited for the last 30 years, prohibiting companies such as Shell from exploring and developing resources for the benefit of the American people.
Senator Sessions, I agree, it is not a free market.
According to the Department of the Interior, 62 percent of all on-shore federal lands are off limits to oil and gas developments, with restrictions applying to 92 percent of all federal lands. We have an outer continental shelf moratorium on the Atlantic Ocean, an outer continental shelf moratorium on the Pacific Ocean, an outer continental shelf moratorium on the eastern Gulf of Mexico, congressional bans on on-shore oil and gas activities in specific areas of the Rockies and Alaska, and even a congressional ban on doing an analysis of the resource potential for oil and gas in the Atlantic, Pacific and eastern Gulf of Mexico.
The Argonne National Laboratory did a report in 2004 that identified 40 specific federal policy areas that halt, limit, delay or restrict natural gas projects. I urge you to review it. It is a long list….
The problem of access can be solved in this country by the same government that has prohibited it. Congress could have chosen to lift some or all of the current restrictions on exportation and production of oil and gas. Congress could provide national policy to reverse the persistent decline of domestically secure natural resource development.(emphasis added)
On Tuesday, the House of Representatives passed a bill that will allow the U.S. government to sue OPEC for conspiring to raise prices. If you think this is sensible, reverse the situation and assume that OPEC wanted to buy our timber, but was demanding that we drop the price and cut more trees. (h/t R. Rapier)
According to the U.S. Minerals Management Service, the outer continental shelf contains as much as 86 billion barrels of oil and 420 trillion cubic feet of gas, 10 times the oil and 20 times the natural gas we use each year. The oil shale formations across the Rocky Mountains and into Canada contain at least 1 trillion, or possibly as much as 2 trillion barrels of crude oil, more than 7 times the amount of crude oil reserves in Saudi Arabia and enough to meet current U.S. demand for over 250 years. Yet Congress prefers to put it off limits. The mud-flats in ANWR would add another 1 million barrels of oil a day.
Why? Well, environmental organizations show you pictures of cute baby animals and tell you that the Earth will die unless you send them money. They use the money to lobby Congress and to sue anyone asking to drill for oil. Or they use it to sue the EPA to demand that the cute animals are put on the endangered species list, to prevent any drilling. They oppose drilling, not for any environmental damage that oil might do, but to destroy our capitalist economy, for they don’t like capitalism.
If this stupidity makes you angry, don’t grumble at the gas station attendant. Call your representatives in Congress. Let them know that you’re mad as hell and you won’t take it any more.
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