Posted by
theoilpatchplug on Wednesday, May 07, 2008 9:04:31 PM
Barack Obama's Fuzzy Gas-Tax Math
Energy Policy: Barack Obama thinks a federal gas-tax holiday is a political ploy. But when he was in the Illinois Senate, he voted for a state holiday three times. These days, he prefers a holiday on gasoline production.
In an ad that aired before the Indiana and North Carolina primaries, candidate Obama said: "I'm here to tell you the truth. We could suspend the gas tax for six months, but that's not going to bring down gas prices long-term. You're gonna save about 25, 30 dollars, or half a tank of gas."
Speaking in Indianapolis before the ad was aired, Obama threw different numbers to a swooning crowd. "I know it polls well," he said, "but here's the truth: It would save the average family 30 bucks over the course of three months — $28, or more precisely, 30 cents a day — which is less than (a) cup of coffee at the 7-Eleven."
If that's his idea of math, we don't want him in charge of the federal budget or U.S. energy policy. So which is it — $30 over three months or over six? And he must think we don't drive very much.
The federal gas tax is 18.4 cents a gallon, so accepting his 30 cents a day figure, he must think we use a little more than a gallon and a half a day, including weekends, driving to our jobs, to the mall, to our kid's soccer games, even to the 7-Eleven.
If he's talking $30 over six months or 180 days, he's talking about 16 or 17 cents a day, which means he thinks the average American family uses less than a gallon a day.
Obama took a different view on the issue when he was an Illinois legislator, voting at least three times in favor of temporarily lifting the state's 5% sales tax on gasoline. The tax holiday was finally approved during a special session in June 2000, when Illinois motorists were furious that gas prices had just topped $2 a gallon in Chicago. Seems he was for a gas-tax moratorium before he was against it.
Today he opposes it because he thinks those evil oil companies will simply raise prices and pocket the 18.4 cents themselves. Apparently it's better for American consumers to outsource their money by paying Hugo Chavez $120 a barrel while we leave oil in the ground. That's a tax on consumers Obama doesn't itemize.
At least the oil companies would take that 18.4 cents and use it to find more oil in the few places Obama and his ilk have not placed off-limits. As we've noted, according to Ernst & Young, from 1992 to 2006 the U.S. oil industry spent $1.25 trillion on long-term investment vs. profits of $900 billion.
The man who had a Che Guevara poster in one of his campaign offices doesn't mind if Cuba, with Chinese assistance, explores for oil 45 miles off Florida while U.S companies are blocked from further Gulf of Mexico production.
Congress has also put off-limits vast areas in the Gulf, Alaska, the Outer Continental Shelf and elsewhere. The Arctic Wildlife Refuge contains more than 10 billion barrels of recoverable oil. Its output would equal 5% of current U.S. oil use, or enough to replace 15 years of imports from Saudi Arabia.
The Chukchi Sea, a vast area off northwestern Alaska, is estimated to contain 15 billion barrels of oil and 76 trillion cubic feet of natural gas. The Bakken Shale formation in North Dakota and Montana is conservatively estimated by the U.S. Geological Survey to contain 3.65 billion barrels of oil.
A gas-tax moratorium may not be a cure-all. (Heaven forbid that motorists should get a little tax relief or that members of Congress should be denied funds for their bridges to nowhere.) But if we do it, let's not stop there. Let's also end the hidden tax that Obama and his brethren impose by refusing to expand domestic supply, the surest way to put downward pressure on oil prices.
By INVESTOR'S BUSINESS DAILY | Posted Wednesday, May 07, 2008 4:20 PM PT