Suggestions for lowering gas prices—from an oilmanby Don on Mar. 01, 2012, under Uncategorized
I got addicted to the blogging bug when I began commenting on Redstate. Redstate offers everyday readers the opportunity to “comment” on stories on the blogsite. It’s the conservative version of the liberal (and, admittedly, much-more-highly-trafficked) Daily Kos. Redstate’s comments section is, in my opinion, one of the blog’s strengths. It offers readers the opportunity to go back-and-forth with each other in detail. Popular posts at Redstate routinely have over a hundred comments. Oftentimes, the comments are more insightful and influential than the original blog article. (That’s the commenting environment I’d like to see develop on TucsonCitizen.com—I think we’re on our way to getting there.)
As with TC.com, Redstate’s “front-page” bloggers are volunteers, instead of professional journalists. One of the best, IMO of course, is Steve Maley. Maley started on Redstate under the pen name of “Vladimir,” but now blogs under his own name. Maley also runs his own blog on energy matters. Maley blogs from experience; he’s a petroleum engineer who’s worked for years in oil and natural gas production.
Maley’s latest blog responds to recent Obama Administration comments that there’s no quick and easy answer to lowering gas prices quickly.
Maley disagrees, and made some suggestions on steps the federal government could take to “reduce domestic gasoline prices by November 2012.”
Commit to a strategic goal of North American energy security. That includes reasonable and responsible domestic drilling. That includes taking the lead on the Keystone XL Pipeline; we could find a way to make it happen while addressing the legitimate environmental concerns of Nebraskans. It includes a commitment to maintaining the Trans-Alaska Pipeline System and opening ANWR.
Ditch the anti-industry, anti-capitalist rhetoric. It is not the President’s or the government’s place to decide when an industry’s profitability is “high enough”. High oil company profits fund more drilling; more drilling means more future supply and lower prices. Besides, American oil companies are not owned by a cabal of wealthy executives, but by America’s pension funds, mutual funds and private investment accounts. “They” are “us”.
Stop targeting the oil industry for punitive tax treatment. States such as Texas and Louisiana have production tax abatement programs that have successfully encouraged new drilling. If you don’t believe that the threat of increased taxes discourages drilling, just ask Governor Perry or Governor Jindal.
Realize that Uncle Sam is in the energy business and is a partner in industry’s success. Oil and gas royalties are the federal government’s #2 source of revenue, after the income tax. Offshore slowdowns hurt not only industry and jobs, but government revenue.
Recognize that industry does not need to be led by government; industry needs to be unleashed and encouraged to innovate. The resurgence of the domestic energy sector was rooted in the private sector, not matter how much President Obama and Dr. Chu would like to take credit for it. The growth in North Dakota, Pennsylvania and Texas happened in spite of the federal government, not because of it.
Oil and gas royalties are the federal government’s NUMBER TWO source of revenue? Funny, I thought we were in the midst of a revenue CRISIS at the federal level. Talk about killing the geese that lay the federal treasury’s golden eggs…
To be fair, at least the Interior Department understands the value of oil and gas production. What makes me say that? Well, they’re proposing a 50% rate increase in the royalty rate for new oil and gas leases on federal land. “Higher royalties mean less drilling, poorer economics of production and premature abandonment of wells,” writes Maley. It also means faster-spinning price meters at the gas pump. If oil and gas companies have to pay higher royalties, I wonder who they’ll pass that price increase on to…
“The main thing holding domestic energy companies back from making a stronger commitment to future domestic supplies,” Maley writes “is uncertainty. Capital hates uncertainty, avoids it like the plague.” Fear of excessive and capricious regulation, and a perception of hostility to oil and gas production by the White House, Energy Department and EPA “makes domestic energy producers hold back.”
And, meanwhile, Cuba ramps up oil exploration in the Gulf of Mexico. Let’s hope the Cubans don’t acquire advanced directional drilling that let them tap into underwater oil resources closer to U.S. shores—resources submerged under both domestic politics and ocean water.
CHICAGO (CBS) — Gasoline prices could approach $5 a gallon by Memorial Day and stay a record levels for much of the summer, according to a forecast by GasBuddy.com.
Gas prices always spike in the summer, but the 2012 Gasbuddy.com Price Outlook predicts this summer will break records.
“It looks like it might be the most painful year at the pump that we have ever seen,” senior analyst Patrick DeHaan said.
(All emphasis added).
Just keep telling yourself, as the gas pump price meter keeps spinning and spinning and spinning…”It’s only money.”
I wonder if the Democrats will rue these words that they, and their environmental lobby allies, said for the record ten years ago, when the Bush Administration proposed drilling for oil on a small section of the Arctic National Wildlife Refuge:
“If drilling [in the Arctic National Wildlife Refuge] were approved today, it would be ten years before oil arrived in refineries.” — Sierra Magazine, January-February issue, 2002.
“Oil extracted from the Wildlife Refuge would not reach refineries for seven to ten years and would never satisfy more than two percent of our nation’s oil demands at any one time.” — Senator Maria Cantwell (D., Wash.), April 17, 2002.
Voters may not be able to keep up with the numbers flying at Mach speed through the price meters on gas pumps nowadays. However, everyone will be able to realize that 2002 plus ten years brings us to…today.
Or, they might remember this Jay Leno monologue from 2008 “Well, at his press conference this week, President Bush blasted Congress for not allowing oil exploration in the Alaskan Wildlife Reserve. Democrats said it wouldn’t do any good, because it wouldn’t produce any oil for ten years! You know…the same thing they said ten years ago.” (Democrats controlled both houses of Congress in 2008).
(Hat tip to Instapundit and Robert Bluey for the Leno clip).