The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

If You Ever Needed Proof that Democrats Want Higher Gas Prices… – UPDATED – They Want to Raise the Gas Tax Again!

Posted by iusbvision on July 17, 2008

Updated – see updates below – editor

If statements by Paul Tsongas and other Democrats from the 1980’s who advocated higher gas and fuel taxes, to “progressives” demanding that we “RAISE GAS TAXES NOW” (see photo below), to Barack Obama’s frank admission that current gas prices are fine, but he wished that we had gotten to the current prices a little slower (see video below)… all were not enough to convince you …

Democrats have opposed new drilling off shore, in the arctic tundra, have opposed new nuclear power and have opposed new clean coal and opposed the recovery of oil shale in the west, where we have more oil than the middle east.

Raise Gas Taxes Now! Click to enlarge.

Raise Gas Taxes Now! Click to enlarge.

Youtube has been terminating the accounts of those who post this video – this is the last one left . If anyone has this video please send a link. Transcript HERE. Mort Kondrake asks Obama if he would like to see $4.00 a gallon gas.  

The latest spin, in light of new polls saying that over 70% of the American people want us to expand energy production, Democrats are now adopting the rhetoric of “Drill Now” while legislation they are proposing pushes oil companies to drill at places that all have said are not economical to lease, or drill on leases where getting the oil would not be economically affordable due to reasons such as the oil is too deep to reach etc.

I was going to write a new article about this legislation but our friends over at Hansmast.com had a post that was so good I am just going quote it:

Democratic Energy Strategy

House Speaker Nancy Pelosi’s (D-CA) website on the legislation she sponsored:

The “Responsible Federal Oil and Gas Lease Act of 2008″ would bar companies from obtaining any more federal leases for drilling onshore or on the Outer Continental Shelf, unless they can demonstrate that they are producing oil and gas from the leases they already hold or are in the process of diligently developing the leases they already hold.

Speaker Pelosi's New Drilling Strategy by Michael Rimerez via Powerline.com

Speaker Pelosi’s New Drilling Strategy by Michael Rimerez via Powerline.com

More on why there’s not drilling today on those leases and why drilling in ANWR *will* bring prices down now. Also, in 2005 I posted some research done by a fellow-blogger and engineer (Alton Foley) about how the footprint of ANWR drilling is equivalent to scale of a tic-tac in a football field. The idea of environmental impact is laughable based upon scale alone, not to mention a host of other factors.

One final note: Look at how Obama cleverly shifts the goal posts in this quote: “[Drilling in ANWR] is not something that’s going to give consumers short-term relief and it is not a long-term solution to our problems with fossil fuels generally and oil in particular”. Well duh! But certainly a shifty way to make it sound like it won’t do any good now or later without acknowledging that at the very least it will do good later.  http://hansmast.com/?p=715

The Wall Street Journal reminded us what the The U.S. Minerals Management Service had to say about unused oil leases:

Oil companies acquire leases in the expectation that some of them contain sufficient oil and gas to cover the total costs. Yet it takes years to move through federal permitting, exploration and development. The U.S. Minerals Management Service notes that only one of three wells results in a discovery of oil that can be recovered economically. In deeper water, it’s one of five. All this involves huge risks, capital investment – and time.

http://online.wsj.com/article_print/SB121478199392114387.html

Obama: Tax Energy Companies When They Drill, Tax them When they Cant!

It gets better, Congress isn’t the only one trying to play games with the voters to keep gas prices high, the latest from the Obama Campaign is to tax oil companies for “winfall profits” after they invest billions in getting more oil and tax them if they can’t get oil off the leases they have now, even if it is completely infeasable to do so:

Obama Suggests Charging Oil Companies for Unused Leases

Sen. Barack Obama said that rather than opening up more federal land to drilling, he would instead dun oil companies for the leased lands they are currently sitting on and use the proceeds to fund sustainable energy projects.

Instead of opening more lands to drillers, Obama said he supported a bill in Congress that would levy a fee on oil companies that have rights to exploit federal property but don’t.

Obama’s remarks were mixed in with a host of energy proposals he has pushed recently, including stepped-up investment in renewable energy research and a windfall tax. Aides said it was the first time on the political hustings that Obama has voiced support for a Senate bill that would implement the dunning procedure on fallow federal leased land.

The bill is sponsored by [Democrats] Connecticut Sen. Chris Dodd and Illinois Sen. Dick Durbin.

The Obama campaign says it calculated that 68 million acres of leased land remain untouched, compared with the 1.5 million acres that President Bush would like to see opened to exploration in the Alaska National Wildlife Refuge.

The majority of these unexploited acres are currently inaccessible by pipeline and much of the land has dubious production value.

http://blogs.wsj.com/washwire/2008/06/24/obama-suggests-charging-oil-companies-for-unused-leases/

Indeed there are some leases that have oil that we can get to but aren’t and WHY is that? Because eco-extremists in league with the Democratic Party have prevented the building of pipelines and other needed infrastructure to make use of the oil once we have drilled for it. ANWR by comparison has all of the proper needed infrastructure nearby.

So what have we learned – that having an oil lease and actually getting to a point where you can drill on the lease and being able to economically make use of the oil once you have drilled to it are two totally different things (see at the bottom of this post where I elaborate on this).

Joe Donnelly – What Have You Done?

Our very own Congressman Joe Donelly is playing the same game. He says he supports more domestic energy production and may even reverse his position now that gas is $4.00 a gallon – but his previous votes say the opposite. Luke Puckett has something to say about it:

How long will it take to get that oil in the arctic tundra Luke?

But wait a minute Luke –

Cynthia McKinney, Green Party Candidate for President says, "Isn't ANWR a place with pretty little trees and pretty little squirrils that EVIL REPUBLICANS want to bulldoze over and MURDER??

Cynthia McKinney, Green Party Candidate for President says, “Isn’t ANWR a place with pretty little trees and pretty little squirrils that EVIL REPUBLICANS want to bulldoze over and MURDER??

When Giant Mosquitos Attack!

Ok lets try again and lets see what the arctic tundra really looks like.

Of course, all the oil in the world will do us no good if we don’t build some refineries, that Cynthia McKinney and her friends in the Democratic Party have prevented us from building for 30 years.

Chuck Norton

Related Posts – http://iusbvision.wordpress.com/2008/06/30/wsj-obama-pelosi-and-kerry-lying-about-oil-leases/#comment-17066

UPDATE – I just had a great convo with Reasonable Citizen at his blog here:

http://kindlingman.wordpress.com/2008/07/10/oil-leases-for-the-last-time/#comment-10167

Reasonable Citizen is a liberal guy but he is NOT one of the far left haters or crazy types that used to come here so often. As Reasonable Citizen shows in his blog, there is an accusation (conspiracy theory) from the far left that oil companies are squating on leases in order to keep the price of crude oil high, thus allowing them to do nothing and still make good profits on the crude they are producing.

Chuck: Of course at $140 if the oil companies could get more oil out of these leases economically there is a huge profit motive to do so. But having the oil lease is no good if you are prevented from using the lease because the oil is too deep or too hard to get to, or because eco-extremists have prevented you from building the infrastructure needed on the lease so that making use of that oil once you get it is feasable.

RC: I am not convinced of this. I cannot imagine that any oil company, or combination of oil companies, would spend $37 Billion for leases in March 2008 in which they do not know if oil resides underneath. They have geologists up the wazoo to determine the probability of striking oil and they do this for a living. They are professionals. I do not buy the argument that you buy enough oil leases in the hopes that one pans out. That would be amateurish and unacceptable to any set of stockholders.

They have no incentive to drill for oil if other wells are producing and profits are good.
And they can sell any of their oil leases anytime they want. But they don’t. Because holding them without producing oil keeps the market supply low and the price high. If prices fall too low, then everyone loses. The game is about maximizing profit and not oil production. This is a commodity and unless you can drill cheaper or transport cheaper or crack it cheaper, it is in your best interest to have the highest possible oil prices at your lowest current cost of production.

Chuck: Let me explain why you are mistaken. IF we raise domestic production, OPEC will lower production to keep the prices up [it is more likely that prices will drop some but at a certain price point OPEC would lower production to keep prices from falling below a certain point]. So by expanding drilling and production here, instead of $700 BILLION a year going out of Americans pockets to OPEC, a big chunk of that pie would go to Americans, in American companies and taxed by our government. It would lower our trade deficit BIG time.

RC: Perhaps the whole thing is beyond my understanding. I am familiar with verticalized industries and familiar with senior management thinking yet the oil company logic escapes me.

I agree that eco restrictions are a problem in NEW oil fields but the leases are not for new oilfields. If I could find the map that shows the known oil fields and unused leases I would post it. I did not save that link.

I admit that I do not know enough to continue this. My visceral feeling is that I am right on this but I cannot match my feeling with arguments. Thanks for stopping by and making me think.

Chuck: Oh I forgot – If I am wrong, the oil companies are lying, and the The U.S. Minerals Management Service is wrong…. that getting the oil on these unused leases should be no problem at all – then I have your fix.

Have the government pay oil companies what ever it takes to get the oil from the leases, so the government can sell the oil themselves and keep whatever profits they can make and/or sell it to Americans at a discount.

Use the power of the government to prevent eco-extremists from getting in the way and use the power given to Congress under Article Three of the US Constitution to take the juristiction away from the courts on this issue. They could do it with a majority vote.

If Democrats wanted to make sure that unused leases are used, this is a 100% surefire way to do so…. but such a move would not match their agenda.

Reasonable Citizen is right that there are some leases with oil that go unused that can be drilled. BUT when you consider the costs that come with…

1. Fighting eco-extremists and/or local government in court to build the infrustucture to make use of it once you have drilled to it, complete with even more lawsuits and appeals.

2. Fight eco-extremists and/or local government to build an oil pipeline to move it, complete with lawsuits in every juristiction the pipe goes through and lets not forget about appeals.

3. The time and money it takes to get through federal red tape to do anything on the land that you have the oil lease for – oh and did I mention that the eco-extremists sue every step of the way and claim that the federal regulation isnt being complied with or that it would disturb the habitat of the Red Chested Nut Scratcher Bird? … and lets not forget when the eco-extremists lose in court they appeal.

4. Ok how many years and millions upon millions have just been blown and you still havent moved 1 drop of oil yet? And by the way, if you lose in court or have some federal agency stop you, congrats you just bought an oil lease for nothing.

5. When you finally start to drill, IF the geologists got it right – hope and pray that something you didn’t detect prevents you from getting to it on the spot where you built the oil rig or doesn’t drive up the costs considerably.

6. Oh by the way we need a refinery to make this oil into gas and other useable products.

7. Do you get the risks that energy companies have to deal with yet?

UPDATE II – ARE THEY NUTS? DEMOCRATS TRYING TO RAISE GAS TAXES AGAIN! (Hat Tip Hotair.com)

Oberstar, D-Minn., said his committee is working on the next long-term highway bill. He estimated it will take between $450 billion and $500 billion over six years to address safety and congestion issues with highways, bridges and transit systems.

“We’ll put all things on the table,” Oberstar said, but the gas tax “is the cornerstone. Nothing else will work without the underpinning of the higher user fee gas tax.”

At the very least, the gas tax should be indexed to construction cost inflation, DeFazio [D-OR] said.

http://www.foxnews.com/story/0,2933,386643,00.html

The American people keep having to go without and Congress raises its spending every year. It is no wonder why this Congress’  approval rating has dropped to 9% since the Democrats took over in 2006. Democrats blocking almost all new domestic energy production was bad enough and now this. Is it possible to be any more out of touch?

Update III – Factcheck.org  Parrots Our Analysis On Unused Oil Leases. Once Again The Vision Gets it Right

Remember what we said just above on the years federal red tape you have to go through before a company can drill on the land it has the lease for.

That’s because these leased lands that don’t contain productive drilling operations likely are not lying idle as Obama implies. There are a lot of steps and procedures involved in setting up a productive oil well on leased land, both onshore and off. The Bureau of Land Management’s Web site lists the regulatory hurdles that need to be cleared as part of the larger five-step life cycle of a well. The path to setting up an offshore drilling operation is even longer, as shown in a large flow chart developed by the MMS.

And there is a lot of activity occurring on leased lands that does not qualify as “production.” For 2006, the BLM reported that there were 77,257 productive holes onshore in the U.S. Beyond that, there were 6,738 applications for drilling permits, 4,708 holes in which companies had begun drilling and 3,693 where drilling had ended among onshore lands. That’s a total of more than 15,000 holes that were being proposed, started or finished that do not count as “productive” holes. And that doesn’t even include holes that might have been continually drilled throughout the year for exploratory reasons.

http://www.factcheck.org/askfactcheck/are_the_democrats_correct_in_stating_that.html

What can we say folks – NEVER doubt the Vision.

UPDATE IV - Pelosi and House Democrats Pass Bill to Allow Offshore Drilling..Where the Oil ISN’T!!

Guess where most of the oil is folks…. you guessed it, it’s within 50 miles of the shore line.

House Passes Bill To Expand Drilling, Fund Renewables
Republicans Say Measure Isn’t Enough

By Paul Kane
Washington Post Staff Writer
Wednesday, September 17, 2008; A10

The House approved a package of energy initiatives yesterday, including measures that would allow oil drilling as close as 50 miles off the Atlantic and Pacific coasts and finance the long-term development of alternative energy sources.

In the first substantive votes since gasoline prices rose above $4 a gallon this summer, the House divided largely along party lines, 236 to 189, with most Republicans rejecting the Democratic-sponsored legislation because it would prohibit exploration of much of the known oil reserves closer to the coasts and in the Gulf of Mexico.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/16/AR2008091601216_pf.html

4 Responses to “If You Ever Needed Proof that Democrats Want Higher Gas Prices… – UPDATED – They Want to Raise the Gas Tax Again!”

  1. A friend of mine just emailed me one of your articles from a while back. I read that one a few more. Really enjoy your blog. Thanks

  2. Opec said

    Nevertheless industry sources believe they could be as high as 20 percent for gas and 17 percent for electricity customers. Opec

  3. none said

    Repeal “prevailing wage” and “Davis Bacon”, which requires government to overpay on infastructure contracts. This would increase the budgets by 20% or so.

    Do this before even considering more unnecessary tax hikes.

  4. mrthawatch said

    I want to say thank you that you have made your
    web site very good to visit and also very helpful for many people.

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