Posted: 8:17 a.m. Monday, March 5, 2012
Dishonest about drilling
By Neal Boortz
Obama’s dogwashers have a pretty warped view of Obama’s achievements on oil and drilling. Chief lipflapper Jay Carney said just the other day that the idea that Obama wasn’t in support of expanding domestic oil and gas production is “demonstratively, categorically false.” Never mind the fact that oil production is DOWN 40% on federal lands under Obama, not to mention the reserves that Obama’s Interior Secretary Ken Salazar has locked away and the dramatic restriction on drilling in the Gulf.
But Jay Carney wasn’t finished. At a daily press briefing last week, he went on to say, “And suggested that somehow simply by drilling or approving the Keystone XL pipeline that that would lower gas prices. That would lower prices at the pump. And that's the kind of empty promise that politicians make when we face hikes in the global price of oil. That is really is dishonest with the kind of promises that are really dishonest with the American people.”
Oh really? Then perhaps Jay Carney should consider this …
The annual trade deficit on petroleum is about $300 billion. Raising U.S. oil production to its sustainable potential of 10 million barrels a day would cut import costs in half, directly create 1.5 million jobs, and applying Administration economic models for stimulus spending, create another 1 million jobs indirectly. Overall, attaining U.S. oil production potential would boost GDP about $250 billion.
I’m no mathematician, but cutting import costs should make some impact on the overall price of oil. And jobs and economic growth … the horror!
Let me remind you that Obama’s own Energy Secretary Steven Chu said just last week that it was not the goal of the administration to lower gas prices directly! In fact, Obama has since suggested increasing taxes on the oil companies. Is this Obama’s understanding of how to lower gas prices, by increasing taxes that are then passed along to the consumer in the form of higher gas prices?! Only in ObamaWorld is this a viable economic plan. But then again, his administration has stated that lowering gas prices isn’t a goal, so maybe this is exactly what he had in mind.
Obama has asked Congress to end $4 billion in subsidies for oil and gas companies. Just remember the vast majority of these “subsidies” are no different than tax breaks enjoyed by every manufacturing company in the United States. Here are some inconvenient facts for the Obama administration and the green regime:
- They are all tax "breaks," or earnings that oil companies get to keep, not money paid out from the US Treasury.
- The amount of earnings not collected in taxes is about $4.3 billion per year -- about 0.2% of this year's deficit and enough to fund about 10 hours of current US government spending.
- A full $3.55 billion of that amount (82%) is due to the way taxes are treated for all industries or manufacturers. To change these tax laws only for oil companies would require singling them out among all industries for special mistreatment.
- The only tax in which the oil industry seems to get special treatment compared to other industries is intangible drilling costs. The amount of that subsidy? That would be $0.78 billion per year -- enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreign-owned and state-owned oil company for drilling offshore Brazil.
- Oil companies already pay tax rates of 40-50% of income. For one company, Exxon, in one quarter of one year, that amount was over $8 billion, or almost double the so-called tax "subsidy" for all oil companies for an entire year.
While Obama complains that the Republicans solutions of “drill, baby, drill” is old hat, his solution of increasing taxes on the oil industry isn’t exactly revolutionary.
And never forget that it was Obama’s energy secretary, Stephen Chu, who said that somehow we need make Americans pay the same for their gas that they do in Europe.
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