The Not-So-Great Energy Debate
To drill or not to drill -- that is the question. More precisely, that's the question that has set the terms of the debate on whether to lift the ban on oil exploration in the Outer Continental Shelf (OCS) and ANWR. It's also exactly the question the oil companies and their political proxies want us to debate. The fact that those of us who'd like to protect the ban have accommodated them is extremely unfortunate because it's the wrong question.
You see, big oil et al are not really the "drill" team; it's just a land grab, orchestrated while they still have friends in very high places. And it won't do a damn thing to the price of gas at the pump, certainly not in your aged granny's lifetime, and probably not in yours either.
If the oil companies wanted to drill for new oil, they could easily do so right now on the millions of acres of land currently available to them for leasing. As Joseph Romm, editor of the Climate Progress blog pointed out to me, there are thought to be 34 billion barrels of undiscovered oil under lands currently open to drilling, multiple times the amount that might be under the OCS or ANWR.
While big oil demonstrably has no pressing urge to drill, they very much want to lock down access to more leasable lands. What with those crazy leaders running around Russia and South America nationalizing the energy sector, and crazier environmentalists running around this country supporting bans and moratoria, the share of land in which American Big Oil Inc can poke holes is shrinking. And they'd like to close the deal before Bush/Cheney leave the building.
Isn't this just rhetoric? Even if they really plan to take their time about it, if at some point down the road they try to find more oil, what's wrong with the "drill" mantra? And why should those of us on the other side of the debate stress the "lease" point?
Because our only hope of turning this debate around, and it's a thin reed, is to convince the public that lifting the moratorium today would not affect prices at the pump tomorrow (or probably ever, according the EIA--see the blog link above). We can't get them to change their rhetoric from "drill, drill, drill," as Larry Kudlow regales me with regularly, to "lease, lease, lease." But we want to do everything we can to educate the public such that when big oil says "drill," we all hear "lease."
The reason this is so critical is because our only hope of winning this debate may lie in helping people to unconnect the dots between lifting the moratorium and the price of gas. Yes, it's hard to convince folks that drilling today won't lower prices tomorrow. But how about NOT drilling today? Because that's what we're talking about here.
The stakes are very high. Sources on Capitol Hill tell me that the only thing holding the line on the bans right now is Pelosi's ability to block the vote. With the R's pressing this as their sole issue, and the majority of the public solidly in the "lift the ban" camp, she may not be able to control this one, and sources tell me if it comes to a vote, the ban is toast, certainly on the OCS and maybe ANWR too.
If that does occur, our best move may be to go for something like the "gang of 10" compromise. That's a bipartisan group of 10 Senators who propose a limited expansion of OCS leasing with a quid pro quo that both repeals a big tax break from big oil and makes them finally pay royalties they've been avoiding for drilling on public lands.
I'd go further and also hit 'em with a windfall profits tax. ExxonMobil alone cleared almost $12 billion in profits last quarter. Just because they, their lobbyists, and their political puppet troop have bamboozled the public into believing that they'll be spared from $4 a gallon gas, we're supposed to hand them the keys to the OCS and ANWR? If that's where this is headed, then I'd like to see some pretty juicy quids for any quos.
Things could change if the price falls back this month while the Congress is back in their districts, but the more likely scenario is that these pols get an earful about energy prices and come back insisting on a vote.
At that point, the only thing protecting the ban is the spine of the Democrats. Most of them have been holding the line, bless 'em, but the line will break unless public sentiment changes enough to create a lot more support for the keeping the ban intact.
Perhaps there's a rich philanthropist somewhere who cares enough about the planet to sink some serious bucks into a massive information campaign to convince the public that A) these guys don't really want to drill, they just want the leases, and B) even if they did, drilling won't bring down the price today, tomorrow, next week, or next year. Maybe next decade by a few cents...maybe not.
I know. You're thinking: silly man, you still think facts matter. Guilty as charged. I can't help it. And there's got to be a more of us? Right? Hello? Anyone out there...?
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Lets see some other companies profits:
Exxon SALES $138 BILLION
Exxon PROFITS $11.68 BILLION
Exxon profit 8.4%
Microsoft SALES $15.84 BILLION
Microsoft PROFIT $4.3 BILLION
Mircosoft profit 27%
UPS SALES $11.6 BILLION
UPS PROFITS $1.06 BILLION
UPS profit 9.1%
Obama should make Microsoft and UPS pay a windfall of $1,000. Free laptops and free shipping for all!!
Arn't Microsofts profits outrageous (27%)especially for a semi-monopolistic corporation.
Especially when computers are so important to children and schools. Many have a hard time paying for them.
Where is the outrage and calls for windfall taxes against Microsoft?
You are right - no additional windfall taxes for anyone.
and
Tell them to stop asking for handouts at our expense
End corporate welfare checks now - no more subsidies, not to Exxon, not to wealthy ranchers, not to any business. NO SUBSIDIES
End all corporate tax breaks now. Exxon has to pay every penny in tax that they owe without adding a windfall tax.
When the automobile business goes under because people can't afford to buy cars - NO BAIL OUT
When oil companies start to earn less money because people are using energy efficient vehicles and other modes of transportation - NO BAIL OUT
Don't care about the business or the type of business but am tired of these corporate life draining parasites that feel entitled to handouts from the taxpayer who doesn't earn in a year what they make in 1 minute.
ExxonMobil paid more in taxes last year than half of all Americans combined (over $30 billion).
AHC,
Are Microsoft's products taken, ready-to-use, from beneath public land?
How about UPS? Does UPS mine their trucks out of a hole in Yellowstone park?
As soon as UPS and Microsoft get their product, at cents on the dollar, from public (read:OUR) lands, I will demand a portion of their profits, also.
Outrage IS justified!
Oil companies pay royalties which are used to fund many Federal Government and State Government programs. You could even argue that Yellowstone Park (managed by Department of the Interior which collects mineral royalties) is funded by oil companies.
http://www
And do we fight wars on behalf of UPS?
You get a portion...
The argument is that they (Oil companies) are making so much money that the government should steal some of it. Nothing about the use of public resources to make that money. If where the product came from mattered, this 'windfall tax' would have been more important for many years. In fact, it wouldn't be a windfall tax, it would be a royalty (which they pay) or an increase in that royalty.
The argument is that they (oil co) should pay more because their nominal profit (the actual number of dollars) is so large.
Taxing windfall profits is a stupid idea. And you have just proven that Exxon's profits are not out of line with its sales. Incidentally, I am not so fond of the oil companies. For example, I think it was outrageous that Exxon slithered out of paying the fines that were levied because of the disaster in Valdez, Alaska. However, retroactively levying a "excess profits" tax is totally ridiculous. It sends the message that the left (in America) is more like the Russian Communists. I.E. Hard work or cleverness or good luck will be taxed away. This may make for good short term knee jerk politics for consumers who are angry about high prices at the gas pumps but it is foolish economic policy.
Consumer's have got to be made aware that the stratospheric increase in prices for oil have to do with the catastrophic decline in the American Dollar. International investors were voting with their money saying that America is a risky place to do business in. The real culprit behind the high price of gas, has more to do with the huge American debt, and the collapse of the American financial system than anything else. If the public realized this then they would realize that the only way to solve the problem is to get the people who were responsible for this mess (the Republicans) out of office.
You forgot Bershire Hathaway (11.6% ROI) and not one has calculated the Federal Gov't's windfall on higher prices. What about the corn farmer"s should we skim off of their ethanol profits?
Pretty silly.
Thank you for explaining the matter in such clear terms. I have a much better understanding of the issue than I did before I read this.
Same here. I don't understand how the public can be so dumb to want offshore drilling; that's what happens when we let education go to hell.
I can't understand either why people want offshore drilling. if Norway saw us quit offshore drilling they might shutdown their offshore drilling too along with the other oil production in the North Sea.
Can't they see it just isn't worth it?
If they would explain it to their population correctly I am sure they would finally understand also that it is bad.
There are plenty of us listening to you, Jared, but who is listening to us? Not the media, not senators, not congress, not the presumptive nominees, and definitely not the president. I feel powerless--mainly due to the weak Democrats. Does anyone have any suggestions?
Third party - leave the Dems because they don't want us anyway.
You are right...th
once again, the repugs and the dems are doin' a 'good-cop / bad-cop' routine on the american public. and once again, the american people are fallin' for it.
'we' are doomed - cuz 'we' are so damn dumb.
The energy quarrel (i refuse to dignify it by the term 'debate') has revealed to me just how much trouble our country is in.
We are not going to fit a rational energy policy on a bumper sticker. Yet it seems our political culture is incapable of assimilating nothing else. All the keynotes of this quarrel are all worthless. The dimwitted gas tax holiday, the silly ignoring of basic easily researched facts which show America will NEVER solve the energy problem with domestic drilling, the witch hunt calls for windfall profit taxes on oil companies, all WORTHLESS.
Once again it's going to take the 2x4 of a major crisis to make Americans act rationally (like reducing driving almost 10 billion miles in a month AFTER gas is $4 a gallon). American hubris and exceptionalism has become nothing short a an actual mental illness, and the energy quarrel is yet another in a long list of proofs of this.
I generally agree, but would not lump calls for windfall profit taxes into the category of "witch hunt." The tax laws setting them up would have to be enacted correctly, however, and that may be too much to expect.
You'd think that for all the money the public has handed the Democrats, you'd hope that they'd use some of it to try to straighten out this story by the Republicans.
We need to change the game on the ground.
If utah and Colorado can save tax money and fuel by going to a 4 day work week for public employees, all federal, state, and local governments should be required to do the same.
That can be mandate with little lag time, and, if it works, it can be extended to private sector as well.
That would save 8 million barrels of imported oil a week according to one study.
http://pog
Big Oil is doing all they can to suggest that our problems with high priced gasoline are due to a lack of oil. The Real problem is that the high prices of gasoline are due to the lack of refining capacity. Check our Senator Ron Wyden's investigative report on the internet dated June 14, 2001. The situation he describes has not changed since then--it has only gotten worse. He says his documents "suggest that major oil companies pursued efforts to curtail refinery capacity as a strategy for improving profit margins; that competing oil companies worked together to subvert supply, that refinery closures inhibited supply" as well as other actions to maintain the high prices of gasoline. He quotes from an internal Chevron document as follows "A senior energe analys at the recent API(American Petroleum Institute) convention warned that if the U.S. Petroleum industry doesn't reduce its refining capacity, it will never see any substantial increase in refining margins...
Later he lists numerous refinery closings for the period from 1995 t0 2001. The oil industry knows how to control the flow of crude oil into gasoline and when they want to slow down the flow and pump up prices all they have to do is reduce refinery capacity. Everyone should read this report. Also, Senator Syden's report is not the only one found on the internet to tak this position. There are many others.
We have two problems: high fuel prices and global environmental risks. More oil, and more refinery capacity won't address both.
The only thing that will is a reduced work week. And, it costs nothing to implement.
That should be the focus of progressive efforts - conservation, and more free time!
http://pog
"That should be the focus of progressive efforts - conservation, and more free time!"
I'm all for more free time to spend with family. But will we spend it sitting around the house ... or on foot or bikes? to spend our "stimulus check"?
WE nee to tell Congress to call congressional hearings to get to the bottom of high fuel prices. We need them to tell us why they won't drill on the land they already have. Then they will finally admit that they really have 33 billion barrels that I read earlier in the thread they have and can start production immediately.
I can't wait to see the republicans faces when 33 billion barrels or whatever it is, is produced from our public land. It will be wild when they see that the 10 billion barrels in ANWR and the 20 billion barrels or whatever those numbers are had been there the whole time.
Won't it be HOOT when the whole conspiracy comes tumbling down?
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