We have a huge lost opportunity to produce our own oil, have security there, balance our trade deficit and make our dollar stronger, gain tax revenues to help balance the budget, and to produce lots and lots of jobs. The cost of not doing this is immense.
Obama is a "good guy", with generallly good motives, but often he crosses over the line of reality into taking credit and twisting the facts. I can't help but feel some trepidation about his placing politics above truth...
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TAKING CREDIT WHERE HE HAS DONE THE OPPOSITE
The President appears to be posturing, to take credit for causing something when he was actually only present. Unfortunately for all of us, the opposite is true, and not just minorly but significantly so.
And, in what I call "wrong targeting", the oil companies are made to be the bad guys, which causes further divisiveness, though it may excite some of the voter base. We need to address the problem and not get distracted with blame and characterization.
It is very difficult to get the facts, so his claims are believed by most. Only a distinct information campaign can offset that. See the actual facts below.
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BOTTOMLINE
OVERALL ASSESSMENT
Obama is hurting jobs, our security, and the dollar - dramatically, not just a little.
FACTS
Oil production is barely at its highest, all increases due to past administrations.
Obama's policies and regulations and permitting process are dramatically reducing oil production, federal permits down by 40%.
The increases are entirely due to private and state lands - Federal lands are flat, which also reduces revenue to the government!
Gulf oil is way down and dropping, many rigs have left to go to another part of the world;
Alaska's Chukchi not allowed to drill a single well;
Rockies, leasing down 70%; overall permits on Federal Lands, down 40%
The punting of the Keystone pipeline is harmful and political (both sides recognize that!)
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"PRODUCTION IS UP, IMPORTED LESS THAN HALF"
President says: "Right now, American oil production is the highest that it’s been in eight years.”
Facts say:
U.S. oil production is up today because of development on private and state lands.
Oil production on federal lands is flat, and oil production on federally controlled offshore areas is down.
EIA (government) estimates that oil production in the Gulf was down 22% in 2012 and projected to be down 30% in 2013 with respect to production forecasts before President Obama’s moratorium policies were put in place.
Today, leasing and permitting are slow, which could depress future production. In the Gulf of Mexico, rigs have left to work in other parts of the world taking jobs with them. In Alaska in 2008, the industry spent $2.6 billion to obtain 487 leases in the Chukchi Sea, yet so far the administration has not allowed a single well to be drilled on any of these leases. In the Rockies, leasing is down by 70 percent since President Obama took office, and the number of wells drilled is down by 40 percent, according to a new study by EIS Solutions.
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President says: “Not only that – last year, we relied less on foreign oil than in any of the past sixteen years.”
Facts: Unfortunately, some of the credit for this goes to the nation’s struggling economy, which of course uses less oil(!)..
The economy is requiring less oil, and less is imported as a result. Less is also imported because the industry has increased overall domestic oil production despite less production from federally managed areas.
THE TAKE-CHARGE POSTURING: I'M DIRECTING... TO...
President says: “I’m directing my Administration to open more than 75 percent of our potential offshore oil and gas resources.”
Facts:
The administration is defining the status quo as progress.
The resources identified are restricted to areas in the Gulf of Mexico and the Alaska OCS that have already
been leased and where the industry is already active. In fact, the administration’s latest plan for offshore development scales back on the previous plan by removing the Eastern Gulf of Mexico and
areas in the Atlantic.
The 75 percent number is deceiving because it includes only the areas we have already explored. It excludes the entire Atlantic Coast, the entire Pacific Coast, and nearly all of the Eastern Gulf of Mexico, which have been little explored. But, if the administration would allow leasing in these areas, exploratory work would proceed, and we would have a better sense of what’s out there (probably a lot more than the administration assumes).
The fact remains that under the president’s policies, more than 85 percent of all offshore areas remain off-limits.
BLAMING AND SUBSIDIES
President says: “We have subsidized oil companies for a century. That’s long enough.”
Facts say: The U.S. oil and natural gas industry does not receive tax subsidies.
It delivers $86 million a day to the federal government in revenue, mostly income taxes.
There is not a single targeted tax credit in the Internal Revenue Code available to the oil and natural gas industry. The industry is allowed to take deductions to recover costs of doing business, which has
been allowed to all businesses since the inception of our country’s income tax system.
The proposal: What the administration is proposing – an $85 billion tax hike – will impede investment in U.S. energy resources, stifle job creation, drive up imports and increase the volatility of gasoline markets.
US RESERVES
President says: “But with only 2 percent of the world’s oil reserves, oil isn’t enough.”
Facts say: The U.S. is home to three times the amount of reserves as Saudi Arabia.
The “2 percent” number is misleading at best. “Reserves” is a technical term that refers to oil that drilling has proven to be available. According to a recent report by the Congressional Research Service, our “recoverable” conventional oil resources are nearly six times that. And our unconventional oil resources are close to six times larger than our conventional oil resources.
Nevertheless, the administration and opponents of domestic energy development continued to use the misleading “2 percent” number. Companies believe in the long-term potential of U.S. oil development. That’s why they are willing to invest many billions of dollars in new projects here at home.
EVERY ACTION TO SAFELY DEVELOP...
President says : “My Administration will take every possible action to safely develop this energy [natural gas]... America will develop this resource without putting the health or safety of our citizens at risk.”
Facts say: Strong industry standards already exist and natural gas production from shale is highly
regulated at the federal and state levels.
API’s more than 600 standards are widely used by companies in the U.S. and around the world and are frequently referenced in federal, state and international regulations.
[Current regulations cover well design, spacing, and operation; water use; waste management and disposal; air emissions; wildlife protection; surface impacts; and health and safety. Federal laws that already apply to shale gas production include the Clean Water Act, the Safe Drinking Water Act, the Comprehensive Environmental
Response, Compensation and Liability Act (Superfund), the Clean Air Act, the National Environmental Policy Act, the Emergency Planning and Community Right to Know Act, and the Occupational Health and Safety Act. Are those getting close to being enough...????]
Nevertheless, ten federal agencies are now studying, considering new limits, or in the process of layering on additional regulations and requirements directed at hydraulic fracturing, an indispensable technology used in most natural gas development. This potential avalanche of new rules will discourage further natural gas development (if not outright prohibit it), reducing investment, reducing energy production and costing jobs. In addition, the administration’s corporate tax proposals would increase taxes on the industry by many billions of dollars, discouraging investment and harming production and jobs.
My opinion The President is "unsure", so he is overdoing it to be on the safe side - and he is hurting the nation. He needs to make practical decisions based on real facts. He is hurting the economy, jobs, the trade balance of payments, and our potential independence. If he did "let it all loose", then the prospect of so much oil coming on line would reduce the price in the futures market and we would all have lower oil prices, plus alot more royalties income to help pay for the government. There are 100's of thousands of jobs that could be added.
TAX PREFERENCES TO OTHER INDUSTRIES
President says: “If you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deductions you get for making your products here.”
Facts say: The oil and natural gas industry manufactures most of the nation’s energy products, yet the administration has been arguing that this industry – and this industry alone among American businesses – should pay more taxes.
In fact, it already does under the Section 199 deduction, which allows all U.S. manufacturers to take a 9 percent deduction of their costs, while limiting the oil and natural gas industry to a 6 percent deduction.
The president has proposed doubling the existing deduction for a company like Apple – which manufactures its
products overseas and whose profits are equal to those of some of the largest oil and natural gas companies – while taking it away from oil and natural gas companies, which provide millions of U.S. jobs.
Opinion and comment: Logically, if we desire to have more jobs, it makes no sense to not encourage more investment in this area. And the President is, in opposition to his desire, losing us jobs. And he is creating another "bad guy".
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PERSPECTIVE ON ALTERNATIVE ENERGY SOURCES AND DEMAND
"Experts predict a 26% increase in demand for electricity in the United States by 2030. In practical terms, that means an equivalent increase in demand for coal and gas, at least for the next decade: Electricity generating plants now consume two-fifths of U.S. energy from all sources, including about 90% of America’s coal and nearly 30% of its natural gas.
Altering that situation poses considerable challenges. According to EIA (government) projections, during the next two decades, renewable sources such as solar, wind, and geothermal are unlikely to substantially change the mix of our energy supply. And integrating the energy from many of these renewable energy sources would likely require expansion of the electric transmission system, such as the addition of more power lines. While nuclear generation is a zero-atmospheric-emissions alternative that already produces one-fifth of America’s electricity, efforts to increase that capacity face two large, though not insurmountable, hurdles: high capital investment costs associated with the construction of new nuclear power plants and resistance from citizens groups that oppose the use and storage of radioactive material."
It appears that it is false hope to expect the too costly (or otherwise restricted) alternative energy sources to increase enough to take away the need for oil We must face that fact and not be impractical about it, or we will suffer consequences that will be huge, including a large reduction in the economic growth if we push too much for alternative energy. And this will hurt the pocketbooks and the prosperity of all Americans substantially.
RAISING PRICES TO FORCE ALTERNATIVE ENERGY
The strategy to force energy costs up so that people will be forced to use more alternative energy. What is forgotten here and not explained to the public well enough is that this would be like a huge tax on them, where their expenses, in an already tight budget for many, will rise significantly (doubling or more). (Energy costs for your vehicle plus for your house, plus there will be the energy cost increase in manufacturing costs and transportation costs for the goods, causing increases in the cost of all of our purchases. And this in turn will cause job losses and a reduction in economic growth.
Everything has its tradeoffs, and sometimes we are willing to accept them - but we should at least be informed of them so that we are making our own decisions, with the government then doing what we want. An example is the doubling of gas mileage for vehicles by 2025. Cars would cost an average of $8,000 extra to be able to meet that goal and the projected job loss would be 250,000 jobs. That may be worth it, but eventually we must face the future effects of what we decide now - there is no free lunch.
MASS TRANSIT REALITY
