oil

PG&E Pipeline Explosion Hushed by Calif. Public Utilities Commish?

One has to wonder why the media in California are not talking about the results of the investigation into the 2010 pipeline explosion that killed 8 people in San Bruno? It would seem like a natural story of a public utility's arrogance and negligence, but somehow few people are aware of the details.

You may recall the disaster that befell San Bruno, California when a 54-year-old pipeline exploded killing eight people and destroying dozens of homes. Afterward the California Public Utilities Commission (CPUC) was charged with investigating the incident and some of its findings are nothing short of shocking. (Download reportHERE)

The report seems to be going unnoticed by many, sadly, but it shows that Pacific Gas & Electric failed in so many areas that it almost seems criminal. Safety was ignored even back in 1956 when the pipeline was first laid.

According to the report, the original welds on the pipeline did not even meet the standards and engineering specifications in 1956.

Apparently, PG&E has a complete breakdown of records keeping, too. According to the report PG&E classified the pipeline that blew up as a "seamless pipe," instead of welded construction. Not only were the records wrong but it wasn't even possible for the pipe to be seamless. Because of the size of the pipe and the age it is impossible for it to have been of seamless construction.

These sort of errors in record keeping appear to be endemic with PG&E and this puts many such facilities at risk not to mention the people that live near them.

PG&E had been fined many millions already before the accident yet none of the problems endemic in its operations had been fixed. Naturally, PG&E has been claiming it needs more money, but even so the company had no problem spending $46 million on the Prop 16 campaign aimed at awarding the company a monopoly for providing California's energy needs.

So, why has this damning report been ignored so much? Why haven't politicians been screaming about this? Why has the media been so silent?

Congress needs to act now to spend $1.2 Billion

Now this is goining to have the sound of "man bites dog" on this blog, but Congress ought to set to in the lame duck session this week and insist that the Energy Department immediately spend $1.2 billion.

It's the best bargain for public money I've seen in a long while.

The Strategic Petroleum Reserve is short 26 million barrels from its 727 million barrel capacity.

http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve

It had been filling at the rate of 70,000 barrels/day when noted energy experts like Senator Chuck Schumer insisted this be stopped so as to keep the feds from adding to oil demand, thus boosting oil prices. This was when the price of crude was going to infinity and beyond.

At the time, eminently reasonable But of course, they then passed legislation forbidding the Bush administration from buying any more oil.

In order to take advantage of the oil bubble's collapse (prices are down around $40/bbl) the legislation needs to be repealed. NOW.

The window to take advantage of this historical crash in oil prices may be short. OPEC meets on December 17 and almost cretaintly will shut in lots of production to try and drive the price back up.

Acting now in the lame duck session to repeal the SPR purchase ban is good for taxpayers, good for consumers and  improves our energy independence. And as soon as the ban is lifted the Energy Department ought ot buy up as much oil as it can immediately.

If they don't act; I do not want the likes of Reid, Pelosi and Schumer bleating next year about energy independence--topping off SPR is a quick cost -effective way to improve the situation now, not some green pipe dream decades away from market.

While we are at it; maybe DOE ought to lock in oil futures for December 2009 delivery.  We might like to emulate Southwest Airlines and set a fixed price for future fuel needs for the Pentagon and the Low Income Energy Assistance Program.  I'd love to see us get heating oil to the northeastern non-profits cheaper than the tinhorn dictator Hugo Chavez and his lefty Kennedy friends.     

It's an idea that makes perfect sense. So, don;t expect anyone in Congress to do this. 

Obama's Boundaries for Year One

Going in to the first year of his Presidency is something that any President needs to handle delicately. Jimmy Carter failed to do it, Ronald Reagan and George W. Bush did it almost flawlessly, and Bill Clinton went with the flow of Congress and it cost Congress. For all the things that the United States is facing in economic policy, foreign policy, and cultural divisions, President-elect Barack Obama needs to act as if he is walking on eggshells. If not, the first year could take away his aura of almost messianic appeal. 

In looking at a number of things that the Democrat-led Congress and Obama are eyeing as policy they would like to implement, there are eight things that Obama cannot sign in to law or else he could make the Republican takeover of Congress in 1994 look like a blip on the radar screen by 2012, if not 2010. Here are the nine policy changes Obama and the Democrats cannot pursue if they hope to expand their majorities or hold on to them over the next two to four years:
 
#1: Any Tax Increase
 
Everyone knows that the economy is in a slowdown. Despite Obama’s calls for “trickle-up” economic policy, reducing taxes on the highest of income groups always appears to lead to greater economic expansion. John F. Kennedy took the top from 90 percent to 70 percent and Ronald Reagan took the top rate from 70 to 20. The end result both times was an economic expansion and greater tax revenues. However, Obama might tempt his fate by going against this approach.
 
The three areas where Obama would want to raise taxes would be on the so-called “rich” by raising income tax rates to the Clinton-era top brackets of 36 and 39.6 percent, eliminating the cap on FICA taxes, and to raise the capital gains tax rate. Any of these three would turn this current recession in to a full-blown depression. As I mentioned in an earlier post, tax increases were the last of the four things that pushed the economy of the 1930’s in to the Great Depression.
 
One of the reasons that the stock market has shed anywhere from 11.7 percent to 14.8 percent of its value in the eight trading days since the Presidential election came to a close (depending on which market you’re evaluating) is that Obama has not addressed his plans on taxes for the foreseeable future. Even the Wall Street Journal has called on Obama to hold a press conference, give a speech, or issue a press release that says he will not increase taxes for the “foreseeable future”. If this does not happen, the stock market will continue to shed its value while waiting with baited breath as to what Obama intends to do as President.
 
If a tax increase comes, it would not be felt until at least the next year. However, the effects of the tax increase would be long lasting in that it would take a potential economic recovery in 2010 in to a second recession that would likely come before the Congressional midterm elections. If the economy is still an issue, 2010 could go for the Democrats the same way it went for Republicans in the middle of economic woes in 1970 and 1982 and Democrats in 1978.
 
#2: Trillion-Dollar Deficit Budget
 
If anyone has been paying close attention, there have been calls for President-elect Obama to increase deficit spending once he takes office. It appears all but certain that unless strict budget discipline is imposed by Congress and Obama, the deficit could hit $1 trillion by the end of the year. All of a sudden, a party that had promised to restore fiscal responsibility and budget discipline by way of PAYGO budgeting would be well on their way to losing all credibility on the matter.
 
It was one thing for Obama to slam President Bush on doubling the size of the deficit during the Presidential Debates against John McCain, but it would be another to not practice what he preaches. By the time of the midterms in 2010, there is no more George W. Bush to blame for unbalanced budgets. Either the deficit is reducing in size as Obama said he would like to do or it is increasing in size as Congressional Democrats would be willing to let happen.
 
When it comes to a budget battle, the home-field advantage belongs to Congress because of the ability it has to draft its own budget and to get members to vote for it based on a number of pork-barrel projects and other giveaways. It also makes it harder for the President if he decides to wage a budget battle with Congress as it will trickle in to other areas on matters of public policy.
 
About the only way out for Obama would be to severely cut military spending. Doing so in a time of two-theater military engagements would cause a great deal of harm to the military. Even the blue-dog Democrats will attempt to stop him (until they get pork or tax cuts they desire). In the end, reducing military spending by increasing runaway earmarks could actually accelerate the size of the deficit at an even faster pace.
 
Chances are that if spending is increased and tax revenues start to run dry thanks to a faltering economy, Obama will have no choice but to become the first President to sign a trillion-dollar budget in to law. If it happens, there will be wrath from the voting public who had expected better from the Democrats on budget matters.
 
#3: The Employee Free Choice Act
 
Speaking of bolstering the unions, the biggest thing that Obama and the Congressional Democrats can do to help their base is to pass the Employee Free Choice Act. What this bill intends to do is to boost union membership by automatically creating a union shop thanks to more than 50 percent of a company’s employees signing a union card.
 
By doing this, it forces an already harmonious relationship between owners and workers in to a more tension-fuelled environment by forcing upon big and small business alike in to pro-union collective bargaining agreements with the government as an arbiter. The problem with this is that workers will get more benefits and wages and job protection while hurting any company’s bottom line with pro-union bureaucrats fighting business at the same time.
 
Also, this would end secret-ballot elections in union elections. Instead, all union elections could be open-ballot votes with union bosses seeing how particular members of their membership voted. In effect, it would turn a union election in to the equivalent of a Saddam Hussein-era Iraqi election with members ostracized and ridiculed for not voting the union line. In a sense, it makes “employee free choice” sound Orwellian.
 
President Bush was smart to veto this bill in 2006, but it will take the filibuster efforts of 41-plus Republicans (which could be in doubt) to stop this bill dead in its tracks. If Obama is all about jobs, he will reject this bill because it will actually kill jobs instead of creating them.
 
Already, there are economists predicting an unemployment rate of as much as 7.3 percent by May 2009 and 9 percent by the end of 2010. If this bill becomes law, we will be talking depression-level unemployment by the time the midterms arrive.
 
#4: Bailouts of American Automakers
 
Rasmussen Reports released the results of a poll showing that 73 percent of Americans fear the United States Government running out of money. If the automaker bailout goes in to effect, Obama will increase that number further thanks to the bailout itself and the number of failing companies in the business community also calling for a bailout.
 
The airlines, cities, and states are all getting ready to get in to line to see how much money the government will give them in the form of a bailout. If this goes through, then Congress will be hard pressed to find a way out of telling all of them “no” directly to their faces.
 
If nothing else, the bailout isn’t for General Motors, Ford, or Chrysler, but it’s for the establishment of the United Auto Workers union to an effort to keep their negotiating leverage. If a Chapter 11 bankruptcy (which is needed) were to ever come about for any of the big three, then it would zap the UAW’s power away thanks to a conservator who would dramatically scale back their pay and benefits.
 
Chances are good (and I’ll be the first to make this prediction) that if the automakers are bailed out now, they will be back for more cash before the Presidential election in 2012 because of the unions and their bad business models. If bankruptcy happens, it could actually save an entire sector of the economy from an even bigger calamity.
 
#5: Repealing Abortion Restrictions with the Freedom of Choice Act
 
To the best of my (or anyone else’s) knowledge, there is not a single state that has successfully restricted abortion by way of a constitutional amendment. If the Freedom of Choice Act ever becomes law, it would result in abortion on demand sans restrictions and even allow for the federal government to directly pay for as many abortions as possible.
 
One of the ways in which Obama and the Democrats succeeded in winning elections was by neutralizing the values-based voters of the conservative persuasion. This was done by their rhetoric of sounding like Reagan on issues such as abortion, faith, and gay marriage (more on this later) and sounding genuine about it. Even President-elect Obama did this in his run for President.
 
What also helped was the complicity of the mainstream media in not probing Obama or other Democrats on social issues. If this one flies under the radar (the media hopes), this will all be forgotten by the midterms and 2012. Instead, there are a number of voting groups that would know better.
 
For one, the Catholic voters went for Obama by the margin of 53 percent to 45 percent while Protestants only went for McCain by a 53 to 45 percent margin. What could be important is the Catholic vote, which made up 26 percent of the electorate versus the Protestant vote (55 percent). For years, Catholics were a reliable part of the Democrat Party base until Roe v. Wade when the Democrats took up the feminazi’s struggle on abortion and kicked Catholics to the curb on the matter. Despite this, Catholic voters went for Obama this year.
 
However, what Obama could not afford to do would be to legislate against abortion bans and encourage more abortion. Catholic clergy (priests and nuns) would not stand for it and would relay their message from their lecterns. If the Catholic vote were to go 75 percent to a Republican, that would be more than 25 million votes, or a projected increase of 10 million votes for the GOP. This switch alone would be enough to defeat Obama in his reelection bid unless he could get some 1.5 million votes elsewhere.
 
#6: Repealing the Defense of Marriage Act
 
From what has been taking place in California in regards to the passage of the gay marriage ban in that state might set the stage for this action taking place. In order to throw the far-left base of Obama’s supporters a bone, there might be a move to repeal the Defense of Marriage Act (DOMA) that was signed in to law by President Clinton in 1996. Should this happen, it could galvanize a majority of voters who oppose gay marriage.
 
Again, this goes back to the plans of Obama and the Democrats to sound like moderates or conservatives on social issues, but their rhetoric ultimately becoming lip service. Far-left politicians on social issues have a hard time being elected when they become an issue in a campaign and when they proclaim left-of-center social policy approaches.
 
In districts where conservatives outnumber liberals by substantial margins, this would not play well at all. If the issues of gay marriage and abortion become the forefront in these campaigns, it almost always favors the Republicans. It would be wise to back off this for quite some time until at least what Obama would hope to be his second term. If not, there will be major electoral losses and Obama would have to reinstate a gay marriage ban in order to save himself from being attacked along social policy lines.
 
#7: “Comprehensive” Immigration Reform
 
This was tried back in 2007 by John McCain and Ted Kennedy and we all know how it turned out. In the end, there were not enough votes to break the filibuster and bring “comprehensive” immigration reform to the floor of the United States Senate. One of its supporters who tried to break the filibuster was then-Illinois Senator Barack Obama who supported this bill.
 
The major point at which the American public and most Senators began to oppose the bill was that amnesty would be granted to all illegal immigrants currently here in the United States and to their immediate families living outside the country. It also drew opposition because of the reduction in the length of the border fence.
 
Obama, who also expressed his support to give driver’s licenses to illegal immigrants during the Democrat primaries, has said he wants to sign it in to law. If there are not enough votes to sustain the filibuster, it will likely pass and another 20 million illegal immigrants and their immediate family members will be put on a “path to citizenship”.
 
Amnesty was tried in 1986 when Ronald Reagan made it happen with his idea that it was the “right thing to do”. Sadly, we have come to the realization that amnesty is not the answer, but a band-aid for a gaping wound.
 
#8: Reinstating the Off-Shore Drilling Ban
 
Later this month, OPEC will meet to discuss further cuts in oil production in an effort to raise prices. This comes as there was the expiration of the off-shore drilling ban and George W. Bush’s executive order ending a ban on the practice. However, as any economist will tell you, when you cut supply, you increase the price.
 
The same would likely take place here as OPEC will almost certainly cut production dramatically in order to start making money the same way they were back in the summer. Iran alone has called for a cut of up to 1.5 million barrels per day. Of course, the Democrats and Obama will become useful idiots by attempting to restrict domestic oil exploration.
 
All of this will actually increase energy prices as the calls for more oil exploration become louder and louder by the day. In the end, it could prove to be fatal as Obama tries to make plays to extreme environmentalists and sacrifices the pocketbooks of average Americans to make a play to his base.
 
#9: Brining Back the Fairness Doctrine
 
There’s an old expression of “if you can’t beat them, join them”. However, in the liberal lexicon, the expression goes “if you can’t beat them, silence them.” Sadly, liberals support free speech only when it appeals to liberalism. The return of the Fairness Doctrine (aptly called the Censorship Doctrine by Sean Hannity) would only impose on AM and FM radio so-called balance as determined by government bureaucrats.
 
Former Clinton advisor Dick Morris has predicted that it will happen, but will be overturned by the Supreme Court “in two years”, but talk radio is effectively dead if this happens. Their targets are the successful conservative talk radio programs because of the failure of liberal talk radio programs. In other words, they are going to destroy success in order to prevent failure which is a long way of saying the attempt is an equal outcome.
 
This will put the United States on par with Venezuela and Russia in terms of restricting free speech on the radio. Meanwhile, television, newspapers, and the internet will not fall under this kind of regulation. In other words, one might call it the Hush Rush Act of 2009. All of this would be designed to end any voice of opposition even as Obama and the Democrats put the United States in the fast lane on the highway to hell.
 
All of these in some way could be plays to the Democrat Party or liberal bases, but they would all begin to antagonize the center, center-right, and right-wing elements of the country to where they take it out on either Obama or on Democrats in Congress. If this becomes the case, it will take either a Republican majority in both houses of Congress to bring Obama to the center following the 2010 midterms or the complete overhaul of Democrat majorities and Obama in 2012.
 
If nothing else, the GOP needs to get to work to offer opposition and alternatives or to be prepared to electorally defeat the Democrats within the next four years.

 

Bright idea: Senate GOP actually gets behind a winning issue

Ed at Hot Air brought this video to my attention, which features 15 GOP Senators, including Tennessee's Lamar Alexander and Bob Corker, calling on the Democrats for a "balanced energy plan." A great addendum to the House GOP effort, actually.

Here's what I like about this video. It's fast-moving, it's solutions-based, and it's surprisingly Internet savvy for Republican Senators. It's a smart appeal to young voters (the Coldplay song would be passé, except I'll give the GOP a pass because at least it's from this century.), and it doesn't talk down to us. The call for their Democratic colleagues to do something is much more senatorial, which makes sense and bookends the revolutionary air behind the House's Guerrilla Congress.

My only hope is that the GOP in Congress uses this as an opportunity to step out of the way, not try to be too meddlesome like with Comprehensive Immigration Reform. Republicans need to know that what we do best is let the market and the people do their jobs.

 Mike Warren posts at RIght-Wing Vitriol from Vanderbilt University.

Windfall Profits Tax

At the Heritage Foundry, Conn Carroll makes a great point...

Ranking all industries by profit margin, oil and gas production is 60th. That means there are 59 other industries that are more profitable than the oil industry.

Exxon Mobil already pays more taxes than the bottom 50% of taxpayers and the company invested a record $25 billion in capital and exploration spending this year.

Read the whole thing for more responses to Nancy Pelosi's questions for Republicans.  Meanwhile, this letter by Don Boudreaux is also instructive...

Barack Obama wants to help consumers cope with high gasoline prices by giving consumers a $1,000 "emergency rebate"; he proposes to pay for this rebate by taxing oil-producers' "windfall profits" ...

Sen. Obama should learn arithmetic. Total profits of U.S. oil companies in 2007 were about $90 billion. If Uncle Sam took all of these profits and distributed them equally to all households in the U.S., each household would get $750. Note that this is ALL profit, not just that portion that Sen. Obama divines to be "windfall."

So suppose that the Senator determines (rather aggressively) that half of these profits are "windfall." That would mean that each household gets a mere $375. Even if Sen. Obama's plan excludes all households in the top half of the income distribution from receiving his "emergency rebate," his "windfall profits" tax would generate only enough funds to give each of the remaining households $750.

If you're in those other 59 higher-margin industries, get ready to chip in.  Meanwhile, as Mike Turk wrote on Twitter today, it's funny how the politicians are happy to suggest a "windfall profit tax" on corporations who make billions, but those politicians rarely suggest a "windfall revenue refunds" to taxpayers from a government making trillions.

The Issues Obama Won't Flip-Flop On

Crossposted at Right Minds

When Barack Obama entered the presidential race, much was made of his unusual political savvy. He represented a new era in politics, his racial background heralded a new post-racial moment, and he stood for a radical change from the old politics. As the race wore on, the accolades became more and more absurd—Ezra Klein suggested that he had a nigh-Godlike rhetorical style, while Michael Morlock called him a “Lightworker” who could harness positive energy. He was supposed to be the next Roosevelt, a man who could redraw the political map and change the face of the country forever.
 
Of course, no politician could live up to the hype around Obama, and few informed people thought that he would be the agent of radical change that the media suggested he was. However, most people did expect that he would display an above average sense of political judgment, one that would allow him to feel out where the American people stood on important issues, and sell himself accordingly.
 
He hasn’t displayed much political discernment, though, and that is simply staggering. It is not as if he is running against a popular incumbent—in fact, the opposite is true. Disagreeing with GOP policies is like shooting fish in a barrel, and there are more than enough issues where the public is disgusted with the Republican party—corruption, pork barrel spending, the economy, the handling of the Iraq War, and fuel prices are just a few.
 
The two most important such issues are the Iraq War and fuel prices, and somehow, Obama has managed to get himself on the wrong side of both. (Perhaps it is an exaggeration to say that Obama is on the “wrong side” of the Iraq War, but it would be hard to say he is on the right side of the issue). Just as the surge’s effectiveness became fully apparent, Obama came to Iraq and instantly starting downplaying its success. Sure, the surge may have reduced violence, but everybody knew it would do that (before the surge, Obama said that it would not decrease violence), and what about its utility in allowing Iraqis to take over their country? (I would assume not having a bunch of terrorists running around is a key step to an Iraqi takeover of the government).
 
Apart from the fact that Obama’s Iraq position is stupid, it also displays an odd and uncharacteristic streak of stubbornness. Why can’t Obama simply admit that the surge worked? He could still push for a quick pullout, and he would appear much less John Kerryequese to voters concerned with his foreign policy expertise.
 
Iraq isn’t the biggest political issue anymore—the economy in general, and fuel prices in particular, are. And Obama has completely bungled the energy issue as well. Sixty percent of the nation wants to see more domestic oil drilling. Over half want to see drilling in ANWR (and yes, I’m aware that McCain opposes drilling in ANWR as well). Barack Obama’s energy plan? Tire gauges.
 
Okay, there is more to his plan than that, but Obama’s strange insistence that checking tire pressure would save as much oil as offshore drilling would produce sums up his energy policy. That claim is debatable—the Energy Information Administration report Obama cites assumes no offshore drilling will be done until 2012, and has been very wrong in many of its predictions.
 
But even if we assume that Obama is correct, is there any benefit to insisting that the answer to our oil problem consists in proper car maintenance? Whatever the truth is, offshore drilling sounds right, and tire gauges don’t seem like the answer to our energy needs. Is there any reason for Obama not to support offshore drilling as part of a comprehensive energy plan?
 
(Obama recently expressed some support for off-shore drilling, but his support is so filled with caveats as to be meaningless. He would support “limited” drilling, and only after oil companies look for oil on every scrap of land to which they have access).
 
It is not as if Obama is so steadfast and honest that the very idea of switching positions for political purposes is anathema to him. He vowed to accept public funding if his opponent would, then ran away from his promise. He vowed to oppose the FISA bill to the hilt, but eventually voted for it. Obama promised to renegotiate NAFTA; he later admitted his rhetoric was “overheated.” Few care much about those issues, but Obama changed his position to entice those relatively few voters who did. But on the two issues all voters do care about, Obama is steadfast as a rock in his unpopular stands. And for Republicans, that’s a good thing.

 

Obama's "Windfall Profits" Tax and Some Facts From The WSJ

Obama on Friday proposed a return to the good old days of Jimmy Carter's energy policies by suggesting a windfall profits tax on oil producers.

The new Obama ad also pushes his proposal to revive a windfall profits tax on energy companies and asserts that McCain favors tax breaks for the oil industry.

"A windfall profits tax on big oil to give families a thousand-dollar rebate," an announcer in the ad says.

Obama would use the tax to fund $1,000 emergency rebate checks for consumers besieged by high energy costs.

Congress enacted a windfall profits tax in 1980, during an earlier era of high oil prices, but repealed it in 1988 amid concern it discouraged domestic oil development. Last year, the House approved $18 billion in new taxes on the largest oil companies, but Senate Republicans blocked them.

And thank goodness they did.  The windfall profits tax is a tremendously stupid idea premised on the fact that Americans want to take out their anger on someone.  But a little digging provides more than a few examples of others that should be taxed.  The Wall Street Journal today, helpfully, has a little list and some fact behind the "windfall" lunacy.

What is a "windfall" profit anyway? How does it differ from your everyday, run of the mill profit? Is it some absolute number, a matter of return on equity or sales -- or does it merely  depend on who earns it?

Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama's "emergency" plan, announced on Friday, doesn't offer any  clarity. To pay for "stimulus" checks of $1,000 for families and $500 for individuals, the Senator says government would take "a reasonable share" of oil company profits.

Exactly the problem.  Who gets to define this ridiculous idea?  Apparently, Dick Durbin.

Dick Durbin, the second-ranking Senate Democrat... recently declared that "The oil companies need to know that there is a limit on how much profit they can take in this economy."

Ok, maybe the concept of capitalism has changed since I studied economics in school, but I don't recall "there is a limit on how much profit you can take" being part of the economic formula.  Let's assume it is, however.  Exxon should surely pay its share, right?

Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion.

That's right, Exxon paid more in US taxes than it made in the US.  Quite a bit more.  You see, Exxon is a  company that operates globally.  It's sales are global.  So we actually see a US company taking money out of the hands of foreign nations, and depositing them into the hands of the US government.  Now the Democrats in the US government want to take more money from around the world and spend it on us.

However, we're not tasked with addressing that fact.  We need to figure out what qualifies them for paying such a ridiculous tax.  Since they're entire US revenue already goes to taxes, maybe we can use some other metric to justify the windfall tax.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon's profits don't seem so large. Exxon's profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

If that's what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery -- both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau's industry rankings.

None of those industries are being asked to pony up... So that can't be it...  Maybe it's growth based...

In a tax bill on oil earlier this summer, no fewer than 51 Senators voted to impose a 25% windfall tax on a U.S.-based oil company whose profits grew by more than 10% in a single year... This suggests that a windfall is defined by profits growing too fast. No one knows where that 10% came from, besides political convenience. But if 10% is the new standard, the tech industry is going to have to rethink its growth arc. So will LG, the electronics company, which saw its profits grow by 505% in 2007. Abbott Laboratories hit 110%.

If Senator Obama is as exercised about "outrageous" profits as he says he is, he might also have to turn on a few liberal darlings. Oh, say, Berkshire Hathaway. Warren Buffett's outfit pulled in $11 billion last year, up 29% from 2006.

The fact is, as the WSJ article points out, the idea of a "windfall" profits tax is ridiculous.  It could be assessed against any company in America for any number of reasons.  It's simply another way for big government bureaucrats and politicians to redistribute wealth in America.  Since Exxon's US taxes already exceed its US income, in this case, it's actually a way to redistribute wealth TO America.

That should make Obama's European fans happy, huh?

Finally, Something for Republicans to be Excited About

Thus far, 2008 has proven to be a long and difficult election cycle for Republicans.  Despite the fact that the Democrat-controlled Congress possesses incredibly low approval ratings (the latest RCP average has it at 19.3%), the bad news seems to continue to stack up against us.  Pessimism toward the economy continues to grow; prices at the pump are out of control; President Bush suffers from abysmal job approval ratings; every indication is that we are going to lose more seats in both the House and Senate; and the man who is at the top of our ticket, John McCain, is not garnering much enthusiasm.  And to make matters worse, we cannot forget about the recent indictment against Senator Ted Stevens.

These are only a few of the many reasons that Republican morale this cycle is extremely low – because, quite frankly, there have been few things to fuel any sort of optimism. Until now.

The bold move by a number of House Republicans yesterday to protest the Democrats' failure to pass a comprehensive energy plan provides a glimmer of hope.  Activists on the Right are buzzing all over the place about it.  According to Twitag, #dontgo is one of the top tags for the entire week on Twitter.  Conservative blogs across the country caught wind of the story, and even the mainstream media covered it.  And it sure seems to have an impact on at least one Democrat, as Barack Obama now says he is willing to consider drilling offshore.

This is a winning issue for our side.  Voters want relief at the pumps, and they want it now.  If voters understand that Republicans are ready to take decisive action to drive down the cost of gas but that Democrats have blatantly obstructed any action, we're going to find a lot of swing voters pulling the lever for us in November.

What happened yesterday on the floor of the House isn't going to completely change the outcome of this election.  But for once, at least there is something for the Right to get truly excited about.  And that's certainly one step in the "Right" direction.

Global Warming Produces New Oil Boon | The Minority Report

Well, Well, Well Hollywood couldn’t have written a more ironic twist to the potential outcome of global warming. While Man-made global warming alarmists are cowering in retreat from the recent rash of scientists and data(pdf) disputing and disproving their positions (like the fact that sea levels have been declining, not rising, for the last two years), an unintended yet very welcome circumstance has presented itself.

For many years Oil companies, geologists and surveyors have speculated that the Arctic contained vast amounts of energy resources… Now, thanks to natural cyclical warming and melting in the arctic it’s not only possible to begin exploring The United States Geological Survey said Wednesday that The Arctic may contain as much as a fifth of the world’s yet to-be-discovered oil and natural gas reserves. For a podcast interview about the USGS Circum-Arctic Resource Appraisal Click Here

The area north of the Arctic Circle has an estimated 90 billion barrels of undiscovered, technically recoverable oil, 1,670 trillion cubic feet of technically recoverable natural gas, and 44 billion barrels of technically recoverable natural gas liquids in 25 geologically defined areas thought to have potential for petroleum.

The U.S. Geological Survey assessment released today is the first publicly available petroleum resource estimate of the entire area north of the Arctic Circle.

These resources account for about 22 percent of the undiscovered, technically recoverable resources in the world. The Arctic accounts for about 13 percent of the undiscovered oil, 30 percent of the undiscovered natural gas, and 20 percent of the undiscovered natural gas liquids in the world. About 84 percent of the estimated resources are expected to occur offshore.

“Before we can make decisions about our future use of oil and gas and related decisions about protecting endangered species, native communities and the health of our planet, we need to know what’s out there,” said USGS Director Mark Myers. “With this assessment, we’re providing the same information to everyone in the world so that the global community can make those difficult decisions.”

Of the estimated totals, more than half of the undiscovered oil resources are estimated to occur in just three geologic provinces - Arctic Alaska, the Amerasia Basin, and the East Greenland Rift Basins. On an oil-equivalency basis, undiscovered natural gas is estimated to be three times more abundant than oil in the Arctic. More than 70 percent of the undiscovered natural gas is estimated to occur in three provinces - the West Siberian Basin, the East Barents Basins, and Arctic Alaska.

So once again these alarmists are proven wrong and to boot, it turns out that the natural, cyclical, Arctic melting has resulted in more oil and natural gas. That sure didn’t turn out the way AlGore expected it to, now did it?

Let me be perfectly clear - I’m all for conservation and preserving our planet as long as we’re not making ridiculous laws and taxes out of unproven theories backed by unmeasurable science. Self responsibility and green awareness should continue to be taught and encouraged. Also the U.S. needs to move from a petroleum based economy to a cleaner one, preferably a hydrogen based economy, but the process has to happen naturally… we should not, and will not, be scared or bullied into adopting technologies and polices that are underdeveloped and economically unfeasible!

 

Ad Critic: Citizen Pickens Goes to Washington

Billionaire oilman and Republican uber-donor T. Boone Pickens has plunked down $58 million to promote his solution to the energy crisis which he calls, strangely enough, the Pickens Plan.  He’s sinking the bulk of that money into a massive issue advertising campaign and his first ad went on the air last week:

This spot accomplishes a very difficult feat.  It makes two arguments to two diametrically opposed constituencies… and does it effectively.  Conservatives will eat up the patriotic/energy independence message while liberals will latch onto the environmentalist imagery.  Pickens himself is an effective spokesman, but by tying the plan directly to his own personal brand he has forfeited a number of key advantages.

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