Saturday, 26 July 2008
Battle Over Oil/Gas Continues To Heat Up
Section 1: Bill Title
The Act has been dubbed the Drill Responsibly in Leased Lands – or DRILL - Act of 2008. However, nothing in its following sections will increase domestic energy production beyond what is already scheduled.
Section 2. Lease Sales in the National Petroleum Reserve – Alaska
This section requires that lease sales be conducted once a year. This is something that is currently allowed, but not done because NPR-A’s Indiana-sized area has no infrastructure. In addition, a history of dilatory lawsuits has made it an area of limited interest to energy producers. This section also seeks to expedite permits in the NPR-A, a positive step. However, it does nothing to tackle the biggest problem with developing new energy: dilatory protests and lawsuits. Any genuine effort must involve putting a stop to the legal blocking and tackling of groups opposed to American energy production. Incidentally, Congress should address this issue nationwide.
Section 3: Pipeline Construction in the National Petroleum Reserve – Alaska
Pipelines in NPRA have been held up by appeals, protests and lawsuits, not energy producers.
Section 4: Alaska Natural Gas Pipeline Project Facilitation
This section authorizes the president to exercise authority he already has to facilitate something he is already facilitating. In short, this section achieves nothing.
Section 5: Project Labor Agreements
A last minute bonus prize for organized labor, but creates no new energy whatsoever.
Section 6: Ban on Export of Alaskan Oil
A nice talking point, but the United States does not export any Alaskan oil, and has not since 2000. California exports more petroleum products than Alaska.
Section 7: Issuance of New Leases
This section was crafted using synonyms to restate existing laws, including:
- The Mineral Leasing Act (for onshore production), which stipulates that an oil company must have a producing well within 10 years or surrender the leases. Source: 30 U.S.C. 226(e)
- The Outer Continental Shelf Lands Act: (for offshore production), which stipulates that an oil company must produce energy between 5 to 10 years (in the government’s discretion) or surrender the lease. Source: 43 U.S.C. 1337(b)
- Penalties in U.S. Code: The federal government can cancel a lease if a producer fails to live up to the terms of the lease, the law or federal regulations. Source: 30 USC 188(a) and (b) and 43 CFR 3108.3 (a) and (b).
Section 8: Fair Return on Production of Federal Oil and Gas Resources
This section restates current law and practice. In fact, the government increased royalties on outer continental shelf leases by 50% last year, making it more expensive to produce energy in America.
Yarmuth! and his Democratic friends in Congress don't want to see an increase in energy production. They want to see the end of capitalism and the rise of eco-socialism. So they wave their hand in the air and make it look like they are doing something when in reality they don't want to do anything. If anything, they would like to see an increase in the gas tax.
Now, lawmakers quietly are talking about raising fuel taxes by a dime from the current 18.4 cents a gallon on gasoline and 24.3 cents on diesel fuel.
I can guarantee that Yarmuth! will be on board for that tax increase as well. It is what Democrats like best: "new sources of revenue" for government. It is the Democratic mentality which makes McConnell's latest television ad effective against Lunsford.
The Courier-Journal and Herald Leader editorial boards dubbed the ad "misleading" which probably means it hit awfully close to home. It turns out that the "automatic adjustments" Lunsford bragged about as a good way to "increase revenue" have cost the tax payers millions of dollars regardless of how the Courier and Herald Leader try to spin it. The ad is effective because it hits at the source of the problem. Democrats like Lunsford and Yarmuth! care more about raising revenue resources rather than the average citizen's or economy's needs.
Of course Lunsford responded to the ad by coming up with his own "energy plan" that can be best described as Democratic Lite.
Open up Strategic Reserve
Gas tax holiday paid for with profits tax on oil companies
Develop oil shale
Develop coal to liquids
Fully close "Enron Loophole"
More consumer protections against gas price gouging
Require drilling on already leased lands
Incentives for R and D of alternative renewable energy sources
Let's go down his list. The Dem's want to open up the strategic oil reserve. While I am glad to see they understand high cost of gas is a supply issue, this isn't the answer. Opening up the strategic reserve won't solve the supply problem because it will have to be replaced at some point in the near future.
I love the gas tax holiday paid for by profits from "Big Oil". This was the "Hillary Plan". So we are shifting the tax burden from consumers to the companies who provide gas. Won't the providers just raise prices to cover the extra taxes? How does this help gas prices exactly?
I am glad to see that Lunsford supports oil shale and coal to liquid plans. These are ideas Republicans like McConnell has wanted for some time now.
Closing the "Enron Loophole" and consumer protections against gas price gouging while sounding noble will do nothing to increase our supply or reduce the price of gas. Requiring companies to drill on already leased lands as noted earlier has been the law for some time. I don't know why we would need another law to say the same thing. Incentives for R and D for alternative renewable energy sources is another Republican idea embraced by Lunsford.
So when we look at his plan it is some quasi mixture between a bad Democratic plan and a reasonable Republican plan. Why would we want some sort of Democrat Lite pan to help solve our energy problems?
My favorite part of Lunsford's attacks on McConnell is his attempt to tie McConnell to "Big Oil". The only problem is people don't look at Big Oil as the problem. They understand by a wide margin that the problem is supply which is why they have overwhelmingly come out in favor of increased drilling. The problem that Lunsford and the rest of the Democrats face is the fact that they can't do anything about the issue. Their hands are tied and all they can do is create smoke and mirrors while do nothing about the problem.
In the meantime, McConnell is doing all he can to help consumers by increasing our supply of domestic oil.
Senate Republicans have threatened to block nearly all other bills pending before the August recess if Democrats refuse to vote with them on expanding offshore drilling.
Senate Minority Leader Mitch McConnell (R-Ky.) said bills that do not pertain to energy can wait until after the August recess, with gas prices now surpassing $4 per gallon. McConnell and top Republicans indicated Wednesday they would oppose any procedural votes to take up other legislation, which require 60 votes to succeed.
“We think there is nothing more important that we can do right now than to deal with the Number One issue of the country,” McConnell said. “This is the biggest issue since terrorism right after 9/11. People are pounding on their desks, saying, Why don’t these people get together and do something about this problem?”
McConnell's leadership in the senate has forced the Democrats to deal with an issue they hope would just go away. Why would we want to replace a senator who is actually working to help us reach energy independence with a guy who's only accomplishment in energy is to create an ever increasing gas tax?
