Follow the Barrel

tpierce98 | ted pierce

[tpierce98]

Follow the Barrel

[tpierce98]

Follow the barrel, for example, from miles below the sea bottom of the Gulf of Mexico. From the time an evil oil company pays the government for a lease, pays rentals on that lease, pays the 17% royalty on every barrel, pays their corporate income taxes, severance taxes, and excise taxes the US government gets 2-3 times what the oil company gets in profit. The Government received over two trillion dollars over the last 25 yrs from the oil industry. Now our brilliant pandering congressmen (R’s and D’s), for some bizarre reason, think that now that people are mad, if they can just put more taxes on oil the price will go down. Who is greedy or stupid or both?

The weenies, sorry, greenies are accusing the oil companies of purposefully succumbing to their years of legal harassment and persecution. Intentionally not building refineries, and not drilling in ANWR (clairvoyant weenies, oops, greenies know there is exactly 6 months of oil in ANWR) or the east coast, or the west coast, or offshore Florida and in quite a few places in the lower 48 so as to gouge the consumer. The chlorophyll must have addled their tiny brains.

Exploration is very risky. Most efforts fail, some, a very small fraction have very large payoffs. The prospect of high returns lures investors into high risk ventures. If large profits are removed then there will be fewer risk takers and less exploration. The Windfall Profit Tax of Jimmy Carter immediately reduced our domestic production 8%, which was then made up by imports.

It will be years at least before alternative-fuels will be developed enough to satisfy our energy needs. Additionally, oil is a critical component of plastics, pharmaceuticals, fertilizers, lubricants and construction materials. We will need oil well into this century.

The United States uses more oil than it can produce, making it dependent on supplies from politically unstable parts of the world. We will never have complete energy independence. Congress should stop scapegoating and grandstanding and remove obstacles to domestic production both to reduce energy prices and so that, in times of crisis, America’s prosperity is not held hostage to hostile foreign powers. Don’t hold your breath.

Theodore Pierce