Now the war against the big bad oil industry is being continued by the Obama Administration. They think they can raise additional revenue by eliminating "tax breaks" for the oil industry. As the following article points out, America needs oil and gas, very much so. To damage this industry will be disastrous for the American economy, people's jobs and the overall source of government revenue. However, that doesn't matter to many politicians who truly just want to expand their power and control over the oil and gas industry. They will use every means possible to achieve these goals, including extortionist tactics like those used against British Petroleum, creating lies about global warming as witnessed by "ClimateGate", and now the Obama Administration is using the EPA (Environmental Protection Agency) as their enforcer to control and hinder the production of gas from shale rocks around the country.
Meanwhile there is a constant and continual propaganda effort to scare the public about first global warming and now "climate change". The fact that they think they can fool the public shows their contempt for the very people who voted them into office in the first place. Shame on them is too soft a punishment. They prove the phrase "dirty politics".
06 August 2010
The White House, along with certain members of Congress, has declared war on Big Oil. This animosity is evidenced not only by the current ban on offshore drilling, which may well force the industry to relocate to other parts of the world, it is also reflected in the myriad of proposals to hike the industry's taxes and use the additional revenues to pursue the administration's green agenda.
President Obama's 2011 budget would do away with $4 billion in accelerated depreciation, depletion allowances and other long-established incentives for oil and gas drilling. Sen. Robert Menendez, D-N.J., has introduced a bill that would remove another $20 billion of industry "tax breaks."
According to the American Petroleum Institute, over the next decade tax hikes on the industry could exceed $80 billion. But both the president and Sen. Menendez argue that because profits are so high, removing these tax preferences will not be a disincentive to robust domestic production. They're dead wrong.
Without question, hiking the tax burden on America's oil and gas companies will mean less, not more, domestic energy production. And though the "enemy" is Big Oil, according to the Independent Petroleum Association these tax increases will fall disproportionately on small drilling companies and could potentially reduce domestic oil and gas production by 20% to 40%.
In exchange for at best a small reduction in greenhouse gas emissions, thousands of jobs will be destroyed, billions of potential investment dollars will flow overseas, imports of fossil fuels will increase, energy prices will rise, and many states and localities that derive revenue from oil and natural gas production will witness further declines in their tax receipts.
What's more, these tax hikes would be at odds with the administration's own carbon-reduction goals since they would discourage production of natural gas, the cleanest fossil fuel.
Here's the problem. While the Obama administration argues we can satisfy virtually all future energy needs from conservation, efficiency and renewables such as wind and solar, in reality we can't simply dismiss fossil fuels from the nation's energy future.
Indeed, the Energy Information Agency estimates that fossil fuels will still account for 79% of energy demand in 2030, regardless of how many tax incentives are thrown at solar, wind, algae, bio-diesel and other renewables. These incentives are already huge, amounting to about $2.82 per million British thermal units for solar and $1.35 for coal, compared with only three cents for oil and natural gas.
At a time when every respected study agrees on the need to increase all sources of domestic energy, we should be pursuing public policies designed to enhance, not retard, the domestic production of oil and gas. Since the Gulf oil spill, new offshore exploration and production have ground to a virtual halt.
New technologies now enable us to potentially extract trillions of cubic feet of natural gas from domestic shale formations, but development of these fields may be stymied in the face of higher taxes as well as possible EPA oversight of hydraulic fracturing.
Thirty-five years ago, before the OPEC embargo, America was importing about 30% of its oil needs. Today, we import more than 60%, some from countries that aren't necessarily friendly to the United States.
Oil and gas companies already pay billions each year in federal, state and local taxes. Adding to the industry's tax burdens at this time will destroy high-paying domestic jobs, shift more production overseas and retard the pace of economic recovery.