Fearing Fuel
By INVESTOR'S BUSINESS DAILY | Posted Friday, October 26, 2007 4:20 PM PT
Energy: With oil reaching an all-time high of $92 a barrel, it's long past time for more investment in domestic production. Yet the Democratic Congress is keen on reducing investment with new taxes on oil companies.
Democrats Seek Control, Not Wealth for the Rest of Us
The House of Representatives approved a bill that rescinds tax incentives for oil and gas companies, increasing taxes on the industry by $15 billion.
The Senate Finance Committee one-upped that measure with a package that sticks it to energy companies to the tune of $31 billion in more taxes.
Senate Republicans have prevented that measure from being attached to the Senate's energy bill, and some Republicans have been blocking Senate Majority Leader Harry Reid from bringing the measure to a House-Senate conference to iron out differences.
In sum, Republicans are trying to stop Democrats from further reducing America's production of its own fuel, placing us even more at the mercy of Middle East Arab states and oil-rich thugs like Venezuela's Hugo Chavez.
They're also trying to stop Democrats from doing something that would raise gasoline prices at the pump to an even higher level than they are now.
The 8% rise in the price of oil seen in the latter half of last week — up $7 to reach a record $92 — came in the wake of new U.S. sanctions on Iran and a rebel attack on an oil vessel off the coast of Nigeria.
Why should the supply and cost of the U.S. economy's most valuable commodity be dependent on geopolitics in some of the most unstable regions of the world? Boosting our domestic supply is the key to lessening that dangerous dependence.
Senate Minority Whip Trent Lott, R-Miss., and others in the Senate GOP leadership would prefer a House-Senate conference to take place so that Democrats don't succeed in bulldozing Republicans on an energy bill.
But just like Sens. John Cornyn of Texas, Jim DeMint of South Carolina and the others opposing a conference, Lott was all fighting words.
"I don't know what they've worked out or who they've worked it out with, but if it's anything close to what we had in the Senate bill, it will not happen," Lott promised, as quoted in Congress Daily. "We will filibuster it and/or the president will veto it, and we will sustain the veto."
Lott called the Senate Democrats' plans "a total waste of time," adding: "If they think they can just ram us, they can't."
It's encouraging to see Republicans fight for something worth fighting for. It isn't "Big Oil" they're defending here; it's the U.S. economy and national security.
Consider the certain effects of the Democrats' plans:
• Going after the five biggest oil and gas companies in America would directly reduce the record levels of investment they've been making in finding, extracting, refining and delivering new domestic sources of oil — for instance, Chevron plans to spend $500 million to boost gasoline output by 10%, or 600,000 gallons a day, at its huge Mississippi refinery by 2010. Mobil Oil recently estimated that it had spent $279 billion on capital spending and exploration since 1985 — an amount exceeding its profit of $267 billion. Guess what will get cut if profits shrink?
• If implemented, the Democrats' plans would actually let the many foreign oil companies with U.S. production pay a lower tax rate on U.S. income than American companies.
• Both the Senate and House plans would change the nearly decade-old lease contracts for Outer Continental Shelf energy production by imposing taxes and fees after the energy industry has invested billions in the projects.
The oil and gas sector is one of the most capital-intensive parts of the U.S. economy. Companies use profits to invest staggering amounts in new technologies to extract oil from places where it was impossible just a few years ago — without harming the environment.
When will Democrats stop fearing the domestically produced fuel that will save consumers money and make our country safer?