     |
Congress Moves On Energy
THE HERITAGE FOUNDATION August 19th, 2008 Full article The Heritage Foundation Excerpts: The Gang of 10. Sounds like something out of Westside Story. I keep waiting for Riff from the Jets to enter the picture somewhere, but it hasn’t happened yet. In reality, the Gang of 10 is a group of senators, 5 Democrats and 5 Republicans, leading the charge to combat high gas and energy prices. While the plan does suggest it will increase domestic supply, this is a bit misleading. Even worse, the majority of the plan focuses on the same tried and failed tax hikes, tax incentive gimmicks, and subsidies that led us to be in this position in the first place. So, I’m calling it the gangrene plan. The definition of gangrene is the decay of body or tissue that results from a lack of blood supply. In a somewhat similar manner, the Gang of 10 plan will cause our economy to further decay from a lack of energy supply. Okay, the analogy is a stretch – take it or leave it. (On a tangential note, do not Google Image “gangrene” after lunch; it’s just not a good idea.) The Institute for Energy Research (IER) does a thorough job explaining the flaws in the Gang of 10’s plan. Their full analysis can be found here. To summarize, the flaws include: •Removing cars off conventional gas through taxpayer money for research & development and taxpayer credits. Yet, R&D should be left for the private sector to fund, not the taxpayer. IER writes, it would make more economic sense to lower marginal income tax rates and take steps to increase domestic energy supplies, rather than to require taxpayers to use credits on technologies that currently do not pass the market test. Palin's Gas Pipeline Isn't Hot Air INVESTOR'S BUSINESS DAILY Friday, August 15, 2008 Energy: As congressional Democrats dither on a vote for oil drilling, Alaska Gov. Sarah Palin has pushed through a gas pipeline project to bring new supply and price relief to the lower 48. Full article Investor's Business Daily Excerpts: On Aug. 1, the same day the call for a vote on drilling began on the House floor, the Alaska state Senate approved a package of measures to license a new natural gas pipeline. House Bill 3001 lets Palin award the Alaska Gasline Inducement Act license to TransCanada Alaska, a pipeline builder that cast a winning bid of five. The legislature had been trying for 30 years to authorize something like this and, up until now, had blown it. Palin got it through. Getting it off the ground, the state says, will be the biggest construction project in U.S. history. Palin considers the $26 billion project her biggest accomplishment as governor. "It was not easy," she told IBD. "Alaska has been hoping and dreaming for a natural gas pipeline for decades. What it took was getting off the dime and creating a competitive market in Alaska." NEW YORK POST DRILL, & SAVE, NOW ...  Custom Search Full article NEW YORK POST Excerpts: Funny how quickly $4-a-gallon gas can smoke out hypocrites - as last week's Pew Research poll, citing a dramatic spike in the share of Americans demanding more energy sources and less environmental protection, shows. The nation, it seems, now favors developing new sources over "saving the planet" by a hefty 3-2 margin. And get this: The biggest shift came among - yep! - liberals. Seems sanctimonious tree-huggers and caribou-coddlers have their price: $4 gas. NATIONAL REVIEW ONLINE July 2, 2008 5:08 PM An America First Energy Plan McCain must pound the point home.
Full article Larry Kudlow NRO Excerpts: President Bush was on message Wednesday in a Rose Garden news conference when he kept up the pressure on his a drill, drill, drill offensive. He said he knows Americans are worried about gasoline prices, and said he wants them “to understand fully that we have got the opportunity to find more crude oil here at home in environmentally friendly ways.” He specifically mentioned opening up ANWR, the outer continental shelf, and oil-shale exploration. He also took a whack at lawmakers, saying “the Democratically controlled Congress has refused to budge.” That’s spot-on correct. But it has me wondering. Where in the world is John McCain on this very same issue? It’s simple: Sen. McCain should be pummeling Barack Obama daily on drill, drill, drill. Why? Because oil and gas pump prices are potentially the single-biggest wedge issue in the presidential campaign. Mr. McCain has to pound the point home. According to a new Rasmussen poll, 48 percent of Americans say lower gas prices are the key to an economic recovery, and 60 percent are in favor of off-shore drilling. REAL CLEAR POLITICS June 20, 2008 Understanding 'Speculators' By Larry Kudlow Full article Larry Kudlow RCP Excerpts: The stock market plunged 170 points this morning and oil jumped over $3, allegedly based on a New York Times story that Israel is carrying out military exercises as a rehearsal to bombing Iran. But actually, the Times story, written by the very able war correspondent Michael R. Gordon, is talking about Israeli training exercises from early June, not now. It’s a rehash story with some new details. And it does in fact confirm the market rumors of June 5 and 6 that Israel was planning an Iranian attack to stop the rogue state’s nuclear-weapons program. Recall that oil jumped almost $15 on Thursday, June 5, and Friday, June 6, largely in response to Middle East war worries. In fact, on Friday, June 6, stocks plunged 400 points as oil jumped $11 to close at its peak price of $140 a barrel. It was this oil spike that helped trigger various Washington and presidential-campaign attacks on so-called oil “speculators.” But what the heck? Anybody with half a brain operating in the oil markets who thought there was going to be an Israeli-Iranian war would be buying spot and futures contracts — which is exactly what happened. So far as I know, there is no new news coming out of Israel. Today’s Times story is a look backwards. June 19, 2008 McCain Scores With Offshore Drilling Proposal By Dick Morris and Eileen McGann Full article Dick Morris and Eileen McGann RCP Excerpts: John McCain has drawn first blood in the political debate following Barack Obama's victory in the primaries. His call yesterday for offshore oil drilling — and Bush's decision to press the issue in Congress - puts the Democrats in the position of advocating the wear-your-sweater policies that made Jimmy Carter unpopular. With gas prices nearing $5, all of the previous shibboleths need to be discarded. Where once voters in swing states like Florida opposed offshore drilling, the high gas prices are prompting them to reconsider. McCain's argument that even hurricane Katrina did not cause any oil spills from the offshore rigs in the Gulf of Mexico certainly will go far to allay the fears of the average voter. For decades, Americans have dragged their feet when it comes to switching their cars, leaving their SUVs at home, and backing alternative energy development and new oil drilling. But the recent shock of a massive surge in oil and gasoline prices has awakened the nation from its complaisance. The soaring prices are the equivalent of Pearl Harbor in jolting us out of our trance when it comes to energy. THE WEEKLY STANDARD There's Votes in Them Thar Hills Drill, McCain, drill. by Fred Barnes 06/23/2008 Full article Fred Barnes The Weekly Standard Excerpts: For years now, John McCain has warned of the peril to America in sending $400 billion a year to foreign countries in return for oil. He's been loud and relentless on the subject--and wise. "It's a national security issue," he declared last week at a town hall meeting in New York City. Much of the money goes to countries that "do not like us very much," he noted. That was McCain's understated way of saying the beneficiaries include Iran, Venezuela, and Saudi Arabia, countries in which anti-American forces find aid and comfort. So you'd think McCain would favor an unbridled effort to reduce America's dependence on foreign oil. But he doesn't. There's an intellectual and political hole in McCain's position, a lack of coherence that hurts both his presidential campaign and that of Republican congressional candidates. Republicans have seized on public anger over $4 per gallon gasoline and are calling for domestic oil production in federal lands and offshore areas now closed to exploration and drilling. Since polls show the public agrees with them, Republicans believe "drilling"--the one-word capsulation of the issue--is their strongest political talking point in 2008. Indeed, it may be their only good domestic issue. June 12, 2008 Do the Right Thing - Start Drilling By Victor Davis Hanson Full article Victor Davis Hanson Excerpts: The other day in southwestern Fresno County, a poor part of Central California, I talked with a number of folks at a rural gas station. Most drove second- and third-hand pickups, large cast-off sedans or used SUVs. Their general complaint was twofold: They didn't have the cash to buy a new fuel-efficient Honda or Toyota. And they were now spending a day or two of their wages just to fuel their cars for their long rural commutes. But I also fill up three hours away on the San Francisco peninsula near Stanford University, where I work. High-priced hybrid cars and new more-efficient SUVs are everywhere. Mass transit is available and crammed. After listening to these quite different motorists, I can confirm an obvious rule about energy use: The wealthier and better educated seem less concerned about the price of gas. Indeed, from my informal conversations at two very different gas stations, I would go even further: The wealthy, particularly those who are politically liberal, also like that high-priced gas translates into less burning of fossil fuels by others and will help accelerate research into alternative energies. INVESTOR'S BUSINESS DAILY Thursday, May 29, 2008 4:20 PM PT Full article IBD Excerpts: Politics: Imagine an America where the government decides what profits are acceptable. Imagine our country with the oil industry nationalized. Impossible? Not with Democrats in control of Washington. One California Democrat, saying out loud what many on her side of the aisle have been thinking for some time, has threatened to seize the oil industry. "This liberal will be all about socializing, uh, uh . . . would be about . . . basically taking over and the government running all of your companies," Rep. Maxine Waters told oil executives on May 22 during yet another show-trial congressional hearing. WALL STREET JOURNAL Blame Congress for High Oil Prices By MACKUBIN THOMAS OWENS May 29, 2008; Page A17 Full article WSJ Excerpts: Gasoline prices are through the roof and Americans are angry. Someone must be to blame and the obvious villain is "Big Oil" with its alleged ability to gouge consumers and achieve unconscionable, "windfall" profits. Congress is in a vile mood, and has dragged oil industry executives before its committees for show trials, issuing predictable threats of punishment, e.g. a "windfall profits tax." But if there is a villain in all of this, it is Congress itself. That venerable body has made it impossible for U.S. producers of crude oil to tap significant domestic reserves of oil and gas, and it has foreclosed economically viable alternative sources of energy in favor of unfeasible alternatives such as wind and solar. In addition, Congress has slapped substantial taxes on gasoline. Indeed, as oil industry executives reiterated in their appearance before the Senate Judiciary Committee on May 21, 15% of the cost of gasoline at the pump goes for taxes, while only 4% represents oil company profits. To understand the depth of congressional complicity in the high price of gasoline, one must understand that crude oil prices explain 97% of the variation in the pretax price of gasoline. That price, which has risen to record levels, is set by the intersection of supply and demand. On the one hand, world-wide demand has accelerated mainly due to the rapid growth of China and India. REAL CLEAR POLITICS Coal-Cap Disaster By Lawrence Kudlow May 28, 2008 Full article Lawrence Kudlow RCP Excerpts: Tuesday's Wall Street Journal strongly editorializes against the Warner-Lieberman cap-and-trade plan that allegedly will solve our alleged problem with global warming -- now called climate change. This plan is very similar to the one Sen. John McCain announced two weeks ago. The Journal argues that cap-and-trade "would impose the most extensive government reorganization of the American economy since the 1930s," including a huge tax increase, higher prices across-the-board, and significant losses to economic growth in the decades ahead. But why do we need a planned economy for energy or anything else? Why not a fully deregulated free market for energy where prices allocate production and consumption? And why not allow the current $130-a-barrel oil price to open the door to a full portfolio of energy resources, including offshore drilling, Alaska, nuclear power, oil shale, conversion of coal and natural gas to liquid fuel, and the development of so-called alternative-energy sources such as solar, wind, and various cellulosic investments (although this latter group may never contribute more than 10 percent to our energy needs)? A true free-market approach wouldn't pick winners and losers with heavy subsidies or penalties. WALL STREET JOURNAL Energy and the Executive By PETE DU PONT May 19, 2008 Full article Pete Dupont WSJ Excerpts: This election is notable in many ways. For the first time since 1952, neither the president nor the vice president will be his party's presidential nominee. For the first time since 1960, a sitting U.S. senator will be elected president. And for the first time ever, if the Democrats win, the next president will be female or black. We are also at a fork in the policy road, for any of the three major candidates would lead us in very different directions on major public policy issues, from spending and taxation on the one hand, to international relations and the war on terror on the other. Equally critical will be their direction on how we generate the energy America needs. Over the past 20 years, have our presidents and Congresses allowed us to drill for the additional offshore oil available to fuel our economy and reduce imports? No. Have they encouraged the building of nuclear power plants that would generate pollution-free energy? No. Are they now supporting the building of coal-fired power plants to generate the electricity our economy needs? No. We have an abysmal national energy policy, and as our population grows and our economy expands, energy needs will increase. From 1980 to 2006 America's annual energy usage increased from 78 to 100 quadrillion British thermal units, and the figure is estimated to grow to 118 quadrillion BTUs by 2030. If our regressive energy production policies continue when the next administration takes office, our economy and the personal lives of Americans will be severely affected. REAL CLEAR POLITICS May 17, 2008 Striking Out on Energy By Lawrence Kudlow Full article Lawrence Kudlow RCP Excerpts: President George W. Bush and Sen. John McCain went to bat on energy policy this week. And guess what? They both struck out. Mr. Bush went hat in hand to the Saudis to ask for more oil production in order to bring down world prices. He whiffed. They said no for the second time this year. ExxonMobil chairman and CEO Rex Tillerson said it's "astonishing" that Mr. Bush keeps asking Saudi Arabia to pump more oil, rather than working harder for increased oil production at home. Mr. Tillerson called this "terribly upside down," and went on to say the president should be fighting to open U.S. coastal waters to drilling and production on the outer continental shelf. He correctly wants to end the federal moratorium on such off-shore drilling, where kajillions of barrels of oil and natural gas are being completely ignored. Motorists are furious with oil at $125 a barrel and a $4 pump price for gas. And they seem to be taking it out on the GOP. That may not be fair, since Mr. Bush does favor a pro-production energy policy that includes off-shore drilling, building refineries, clean-coal development, oil sands, natural gas, and nuclear power. But Democrats in Congress stridently oppose these ideas, as does Hill-Bama on the campaign trail. They want an excess-profits tax. Brilliant. Visit: Club For Growth Visit: Club For Growth HOUSE Key Vote Alert - Housing Amendment Key Vote Alert KEY VOTE ALERT "NO" on Frank Amendment to the New Direction for Energy Independence, National Security and Consumer Protection Act (H.R. 3221) The Club for Growth urges all House members to vote "NO" on the Frank amendment to the New Direction for Energy Independence, National Security and Consumer Protection Act (H.R. 3221). This key vote will be part of our 2008 Congressional Scorecard. Part of this proposal would give the Federal Housing Administration (FHA) the power to guarantee refinanced mortgages up to $300 billion. This amendment would be disastrous to taxpayers if it became law. It would create the moral hazard environment of people purposely defaulting so that they can become eligible for a FHA-backed mortgage. And since a person can't be denied coverage because of a low credit score, taxpayers could be on the hook for billions of dollars in defaulted mortgages. This could ultimately lead to higher taxes that would only worsen the housing situation even more. In its explicit veto threat, the White House correctly identified this amendment as a bailout, calling it irresponsible. This amendment should be vigorously opposed. Our Congressional Scorecard for the 110th Congress provides a comprehensive rating of how well or how poorly each member of Congress supports pro-growth, free-market policies and will be distributed to our members and to the public. INVESTOR'S BUSINESS DAILY One Answer To Energy Needs Is Spelled LNG By BEN LIEBERMAN Monday, April 28, 2008 Full article Investor's Business Daily Excerpts: Environmentalists love natural gas — except when they hate it. This schizophrenic approach is costing the rest of us a bundle and is standing in the way of badly needed sources of supply like liquefied natural gas. Green activists and legislators love natural gas relative to its dirtier fossil-fuel competitor, coal. Tough measures in the 1990 Clean Air Act amendments targeted new coal-fired power plants, and very few have been built ever since. In effect, new coal plants were declared "out of bounds" — along with new nuclear plants — as an option for generating additional electricity. But while these power sources were consigned to the sidelines, America's electricity needs kept expanding. ### Investors Business Daily Undoing America's Ethanol Mistake By SEN. KAY BAILEY HUTCHISON Friday, April 25, 2008 Full article Senator Kay Bailey Hutchison IBD Excerpts: The Nobel Prize-winning economist Milton Friedman once said, "One of the great mistakes is to judge policies and programs by their intentions rather than their results." When Congress passed legislation to greatly expand America's commitment to biofuels, it intended to create energy independence and protect the environment. But the results have been quite different. America remains equally dependent on foreign sources of energy, and new evidence suggests that ethanol is causing great harm to the environment. THE CHRISTIAN SCIENCE MONITOR Ron Scherer Full article Ron Scherer Christian Science Monitor Excerpts: New York - Americans cannot avoid the soaring price of oil. They pay for it at the pump, with gasoline at a record $3.42 a gallon. They get hit by fuel surcharges when they book airline flights. Higher fuel prices are a major reason for rocketing food prices – in part, because corn is being diverted from the food supply to make ethanol, in part because of higher fuel costs to produce and transport food. Now, rising energy prices – oil hit records above $115 a barrel this week – are causing concern about the potential damage to the economy. Americans are spending a larger share of their income on energy than at any time since 1986. That has crimped pocketbooks and helped dampen consumer sentiment. Purchases of everything from cars to clothing are falling. NEXT ENERGY NEWS Massive Oil Deposit Could Increase US reserves by 10x Full article Next Energy News Excerpts: America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed. Thanks to new technology the Bakken Formation in North Dakota could boost America’s Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC’s short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant. In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving an accurate resource assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951. The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels were present but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel. From: Family Security Matters A Primer on Oil Prices Alan Caruba Full article Alan Caruba Excerpts: "The tripling of oil prices since the summer of 2003 has unleashed forces that within the next two or three years will bring oil prices tumbling back down to below $50 a barrel." So said John Cassidy, writing about "The Coming Oil Crash" in the January issue of Conde Nast Portfolio. Yes, the price of oil will come down, though no one knows exactly when. It has topped $100 a barrel and there are indications it could go higher.
There are vast forces at work regarding the price per barrel of oil and one of them is the speculation that has driven up the cost despite the fact that there are ample supplies. The problem is not lack of oil, but whether it can be shipped to a waiting world. The potential for conflicts in the Middle East and elsewhere worries the marketplace.
Sebastian Abbot, an Associated Press reporter, points out that, "Hedge funds and other financial institutions have been buying and selling oil contracts in an attempt to generate profits." Such trading has little to do with actual supply and demand and more to do with the kind of gambling that led to the sub-prime mortgage meltdown. And what goes up will go down. The cost of a barrel of oil is also tied to the value of the U.S. dollar whose decline against other currencies adds to the cost at the pump. From: Real Clear Politics Congress Punishes American Oil By Steve Forbes Full article Steve Forbes Real Clear Politics Excerpts: In a relentless resolve to craft national energy policy, House Democrats last week passed an energy tax bill for the third time and the bill is headed to the Senate. With oil clearing the $100 benchmark and ongoing instability in key oil producing regions of the globe, politicians in Washington want credit for some form of energy legislation, even if it is wrong for the country. What Congress has really concocted is a transfer of wealth scheme that raises taxes on oil companies to provide subsidies to "alternative energy." The bottom line on their latest energy fiasco is that it raises taxes on select oil companies, spares foreign oil companies the same tax increases and hands over subsidies to some of the largest companies in the country who will benefit from the "renewable" tax credits. This $18 billion tax increase concocted by Congress includes a provision that takes away a manufacturing tax credit - which companies across the board can use - from only the five largest oil companies. As bad as it is to raises taxes for the energy industry during an economic slowdown, a tax increase that's only aimed at specific companies undermines energy security by putting a handful companies at the mercy of competitors across the globe. Missing: Media Criticism of OPEC After oil spikes above $100 a barrel, condemnation of OPEC's decision to put less oil on the market nowhere to be found. By Jeff Poor From: Business & Media Institute 2/20/2008 11:39:36 AM Full article To Jeff Poor Business & Media Institute Excerpts: Remember the resentment the media showed toward oil companies when they announced record profits?
When gas prices were hitting their highs back in 2007, there were reports of a death threat to an oil company executive, media personalities voicing suspicions of price gouging and pleas to just “cut back” on profits so people wouldn’t have to spend their grandchildren’s college money on gas.
But, after oil exceeded the $100 a barrel mark on February 19, industry analyst this time blamed OPEC’s reluctance to increase output as one of the key factors. Last week Senate Majority Leader Harry Reid was the chief sponsor of legislation to increase fuel economy to 35 miles per gallon for SUV'S and regular size autos over 13 years. This will make cars lighter and more dangerous in the event of a collision. This will cause the price of autos to increase by at least several thousand dollars and even more for those with more that one child who have more seatbelt concerns than those with no children. Senator Reid drives a Chevy Suburban which gets 15 miles per gallon but heck he earns $185,000 a year, almost 5 times per capita income in the U.S. Like too many in congress, or like Al Gore preaching Global Warming fears while being a huge polluter himself, double standards are rampant among Lawmakers. It now looks as though, the U. S. Senate will pass a bill that will open 8.3 million acres in the Gulf of Mexico to oil and natural-gas exploration. Passage of the bill could come as early as next week, under rules which would limit changes. "This is an American solution to an American problem," said Sen. Pete Domenici (R., N.M.), chairman of the Senate Energy Committee. He predicted that the passage of the bill will bring natural-gas futures prices down almost immediately because it is adjacent to proven gas-rich producing areas of the Gulf. On June 30th The U.S. House voted to lift bans on oil and gas drilling on most of the federal undersea tracts off the Atlantic and Pacific coasts and in parts of the Gulf of Mexico. "Many of America's well-intentioned conservation laws have resulted in dire consequences for our economy and the American work force," said Rep. Richard Pombo (R., Calif.), chairman of the committee, [ House Committee on Resources]. He said the chemical industry, which uses natural gas to make a wide variety of products from paints to plastics, has lost more than $60 billion of business to foreign competitors because soaring U.S. gas prices have made their products too costly. The House Bill would open 356 million acres to exploration as compared to the 8 million in the Senate Bill. Although the distance between the House and Senate is formidable, several Republican Senators said they support the House measure. It is not known how much oil and gas could be found in these areas. There are no recent surveys on which to rely. An earlier Department of Interior study estimated there may be as much as a 15 year supply of natural gas near Alaska. The energy situation could probably be referred to, without exaggeration, as a crisis, because of events in the Middle East. Since the oil embargo of the 1970’s, we’ve had endless promises of solving this crisis. We may finally have started the ball rolling. Stay tuned. Look for an update, when the Senate takes up another vote during the first week in August UPDATE On August 1, The Senate approved the measure explained at the top of this page. A serious battle seems likely with a House measure that wants to open up 356 million acres, up and down the Atlantic Coast. So with one body wanting 356 million acres opened up and the other body wanting that figure limited to 8.3 million acres, a reconciliation will take a serious compromise between the two bodies. Senate Democrats have vowed to block any compromise, insisting that the House accept the Senate version. Energy To The Heritage Foundation: For More On The House and Senate Bills
|
