The Senate held votes this week on competing Democratic and Republican oil bills. The Democratic bill, S. 940, which would raise taxes on big oil companies, was defeated on a vote of 52 to 48. The Republican bill, S. 953, which would force the Obama Administration to increase offshore oil leasing, was defeated on a vote of 42 to 57. Under Senate rules, sixty votes were required to pass either measure.
Senate Majority Leader Harry Reid (D-Nev.) had this to say about those who voted against the bill to raise taxes on the five largest oil companies: “They would rather cut college scholarships, slash cancer research, and end Medicare than take away taxpayer-funded giveaways to oil companies that are raking in billions of dollars in profits.” Three Democrats (Senators Mark Begich of Alaska, Mary Landrieu of Louisiana, and Ben Nelson of Nebraska) voted against the oil tax hike, while the two Republican Senators from Maine (Olympia Snowe and Susan Collins) voted for it. And Senator James M. Inhofe (R-Oklahoma) had this to say about the Republican offshore bill: “The solution to skyrocketing gas prices is simple: increase supply.” The establishment media regularly try to portray Senator Reid as a statesman and Senator Inhofe as a conservative ideologue. These contrasting quotes allow readers to judge for themselves.
House Passes Offshore Drilling Bills
The House of Representatives this week and last passed three bills to force the Obama Administration to increase offshore oil and gas production. H. R. 1229 passed by a vote of 263 to 163, with 28 Democrats voting Yes. H. R. 1230 passed last week by 266 to 149, with 33 Democrats in favor. And H. R. 1231 passed the House 243 to 179, with the support of 21 Democrats.
All three bills were sponsored by Rep. Doc Hastings (R-Wash.), Chairman of the House Natural Resources Committee. You can read brief committee summaries of what is in the bills here, here, and here.
Naturally, the White House opposes all three bills. President Obama and his top energy and environmental officials support policies to raise gasoline and electricity prices for consumers.
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Representative Steve Pearce (R-New Mexico) yesterday removed his name as a co-sponsor of H. R. 1380, which I have dubbed the T. Boone Pickens Earmark Bill. Rep. Pearce is an outstanding conservative Member of Congress, who is policy oriented and held in high regard by his colleagues, so his defection from the Boonedoggle Bandwagon is an important sign that House conservatives may be starting to rethink their support. Pearce deserves special credit because the oil and gas industry, which would benefit from the Pickens-Your-Pocket Plan, is the largest industry in his southern New Mexico district.
Quebec, long an economic basket case kept afloat by Canada’s federal government, has decided to open up its northern interior to resource development. Quebec Premier Jean Charest announced on Monday an ambitious 25-year “Plan Nord” to build highways, airports, and other infrastructure so that the area can be developed.
According to Montreal’s Gazette, “Investments in energy development, mining, forestry, transportation, and tourism in the 1.2-million-square-kilometre region – twice the size of France – will create 20,000 jobs a year, generating $162 billion in growth and tax revenues of $14 billion.” Large parts of northern Quebec are heavily forested, and there are major deposits of iron, nickel, gold, platinum, cobalt, zinc, vanadium, and rare earths.
The Obama Administration should follow Quebec’s good example. The Department of the Interior and the U. S. Forest Service (an agency of the U. S. Department of Agriculture) control nearly 30% of the land in the United States, most of it in the West and Alaska, plus the Outer Continental Shelf. Federal lands and offshore areas contain colossal reserves of energy and minerals plus the most productive forests in the world. But the Obama Administration is locking up more and more federal lands and offshore areas in order to prevent oil and gas production, hardrock mining, and timber production. And they’re trying to block coal mining in Appalachia by inventing new pollutants to be regulated.
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In response to my criticism of conservative Members of Congress for supporting H. R. 1380, which I have nicknamed the T. Boone Pickens Earmark Bill, some conservatives (in which broad category I include libertarians and advocates of free markets) have defended tax credits, even those that benefit only narrow interests. They do, after all, reduce some people’s taxes, and reducing taxes is a good thing. Some even go further and define ending tax credits as raising taxes. Some anti-tax groups thus demand that elimination of any tax credits be matched with tax cuts somewhere else.
The conservatives who make these arguments do so because they have unknowingly accepted the world view of the left. They have forgotten that the Constitution was designed to maintain a nation of citizens rather than to create a government with subjects. They ignore the essential role that the equal protection of the laws fulfils in maintaining the rights of citizens against the encroachments of government.
Tax credits (also known as “tax expenditures”) for buying or producing certain goods and services rather than other goods and services are a species of wealth re-distribution. Tax credits are a particularly obnoxious type of wealth re-distribution because the re-distribution generally flows from the politically less powerful to the politically more powerful.
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Republicans in the House of Representatives are flocking to support a bill to extend and create a number of taxpayer-funded subsidies for manufacturers and buyers of vehicles powered by natural gas. Nearly eighty House Republicans (and a hundred Democrats) have signed up as sponsors of H. R. 1380, the New Alternative Transportation to Give Americans Solutions Act (or NAT GAS Act). Just call it the T. Boone Pickens Earmark Bill.
Many conservative Republicans in the House, particularly a number of new Members with Tea Party connections, have sworn that the fiscal and economic crisis confronting America requires a radical change in federal policies. Out-of-control spending must be stopped; spending earmarks must be abolished; crony capitalists on the prowl for corporate welfare must be sent packing; subsidies for special interests must be abolished; government must stop interfering in the economy and let free markets work.
That big talk doesn’t seem to apply when the spending is being earmarked for a crony capitalist who is one of the biggest contributors to Republican candidates in history–billionaire T. Boone Pickens. Apparently, some subsidies are good if they benefit the right special interests. And government interference in the economy is wonderful if it is done in the name of reducing oil imports.
H. R. 1380 would extend the tax credit of 50 cents per gallon of liquid natural gas (or its equivalent of compressed natural gas) when used for fueling vehicles and provide purchasers of natural gas vehicles with credits ranging from $7,500 to $64,000. The lower end is for passenger cars and the upper end for big trucks. There are also credits for natural gas vehicle manufacturers and for installing natural gas fueling stations.
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The stunning victory by Stephen Harper’s Conservatives in Canada’s election means the death of cap-and-trade or a carbon tax in Canada. The Conservative Party’s platform firmly opposed both cap-and-trade and carbon taxes. The Liberal Party, which was annihilated in the election, equally strongly supported imposing a cap-and-trade scheme to reduce greenhouse gas emissions.
Conservatives won a clear majority of 167 seats in the 308-member federal Parliament. They had formed a minority government since 2007. For the first time in Canadian history, the Liberal Party dropped to third place with 34 seats. The hard left New Democratic Party (NDP) wiped out the Bloc Quebecois in Quebec and will become the official opposition with 102 seats. The NDP and the Bloc Quebecois also support cap-and-trade. The Green Party won its first seat in Parliament.
This is another clear sign that public support for cap-and-trade and other energy-rationing policies is waning. Cap-and-trade has been dead in the United States since the Waxman-Markey bill narrowly passed the House of Representatives on June 26, 2009. And in Australia, the Labour Party government is in deep trouble as a result of proposing a carbon tax. The global warming fad appears to be fading fast.
Professor Matthew Nisbet of American University published a report last week that concludes, among much else, that environmental pressure groups spent a lot more money trying to pass cap-and-trade legislation than opponents spent trying to defeat it. The report, “Climate Shift: Clear Vision for the Next Decade of Public Debate,” is part of the Climate Shift Project of American University’s School of Communications.
As someone who has been engaged in the global warming debate for over a decade, the conclusion that the cap-and-traders had more money than their opponents is not at all surprising. In fact, it is obvious and recognized by everyone who has been paying attention.
But rabid attack dog Joe Romm of the hilariously-misnamed Center for American Progress, who got hold of a copy of the report before it was published, naturally attacked it viciously. That’s because Nisbet’s analysis destroys the environmental movement’s carefully-cultivated mythology that they are a bunch of little citizen groups up against mammoth industry special interests led by Big Oil and King Coal.
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The White House has finally realized that there is a close correlation between rising gas prices and dropping presidential popularity ratings, and so President Barack Obama has begun flailing around to try to deflect the blame. Normally, I would sympathize with the President’s predicament. Oil prices go up and down as a result of global supply and demand. But in this case, I think the President deserves all the blame he’s going to get from the American people.
President Obama and his Administration have done everything they can to reduce domestic oil and natural gas production. The Department of the Interior has cancelled leases on federal land in the West, delayed and denied permits necessary to start drilling on leases (which, remember, are awarded by competitive bid and have already been paid for), restored an executive moratorium on leasing most federal offshore areas, denied a permit to a lease off the Alaska coast for which Shell paid $2.2 billion and has already invested $4 billion, and placed a moratorium on new drilling in deep and shallow waters in the western Gulf of Mexico (the only major offshore oil field in the U. S.). Since lifting the western Gulf moratorium earlier this year, Interior has been slow-walking the approval of drilling permits. The President also steadfastly opposes opening the coastal plain of the Arctic National Wildlife Refuge to oil and gas exploration.
Although President Obama said in a recent speech that the U. S. was going to have to produce more oil, the Department of Energy’s Energy Information Administration has projected that domestic oil production is going to decline significantly in the next few years as a result of Administration policies. The dropoff would be much steeper were it not for the rapid expansion of production in the Bakken field in North Dakota and Montana. The Obama Administration has not been able to slow production there because all the land is privately owned.
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House Committee Acts To Stop President’s de facto Drilling Moratorium
The House Natural Resources Committee marked up three bills on Wednesday that would require the Obama Administration to stop its obstructive tactics and start producing more oil and natural gas from federal Outer Continental Shelf areas. Committee Democrats dragged out the mark-up for nine hours by offering and insisting on recorded votes on a series of amendments to weaken or gut the three bills—H. R. 1229, 1230, and 1231. None of their amendments was adopted.
It is expected that the House will pass all three bills in May. Committee Chairman Doc Hastings (R-Wash.) plans to introduce additional bills in the next few months to increase domestic oil and gas production on federal lands in Alaska and the Rocky Mountains as part of House Republicans’ American Energy Initiative.
House Leadership Tacitly Endorses Excellent EPA Strategy
Environment and Energy News reported this week that House Speaker John Boehner (R-Ohio) did not rule out attaching something like the Energy Tax Prevention Act (H. R. 910) to the bill to raise the federal debt ceiling. H. R. 910 would block the Environmental Protection Agency from using the Clean Air Act to regulate greenhouse gas emissions. It passed the House last week on a 255 to 172 vote, but failed as an amendment in the Senate on a 50 to 50 vote.
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