Posted on 10/25/2006 7:05:37 PM PDT by thackney
DALLAS, Oct 25 (Reuters) - Small American oil producers are concerned about the prospects of Democrats taking control of Congress in the Nov. 7 midterm elections, fearing the imposition of windfall profit taxes and more regulation.
"Most of the Senators from oil and gas states are Republicans," said Lee Fuller, the main Washington lobbyist for the Independent Petroleum Association of America (IPAA). Some Democrats, he said, "just don't like us; they will never be sympathetic to our issues,"
Less than two weeks before the Congressional election, most polls show the Democrats taking the House of Representatives and possibly the Senate -- an unappealing scenario for the IPAA.
"If the Democrats take over we're going to be seeing leadership and many committee chairs who are not familiar with the oil patch and have no particular reason to become familiar with it," Fuller told Reuters on the sidelines of the IPAA's annual meeting.
IPAA President Michael Linn told Reuters the industry was concerned about windfall taxes.
"In terms of our business it will open the doors for windfall profits and some other types of taxes which will be used to fund alternative energy resources," Linn said.
He said the IPAA was concerned that tax breaks enabling small producers to write off 70 percent of the costs of drilling a well could be in jeopardy if Congress changes.
The IPAA does not explicitly endorse candidates or parties. But its annual meeting in the key oil town of Dallas welcomed Republican Rep. Joe Barton of Texas, chairman of the House Energy and Commerce Committee, and Republican Sen. Larry Craig of Idaho, who sits on the Senate's energy panel.
Both lawmakers addressed the conference, which ends Wednesday, and stressed that their party is the industry's friend.
"Eighty-five percent of the House Democrat caucus, 85 percent, has voted no on every energy initiative that's come before the House in the last two years," Barton told the delegates.
Craig told Reuters he was concerned a Democratic Congress would become "more hostile to the energy industries of our country."
The politics of oil are not always so cut-and-dry partisan. Democrats from oil-producing states such as Texas and New Mexico tend to be more favorable to the industry.
The IPAA represents thousands of independent oil and natural gas producers and service companies.
It says independent producers develop 90 percent of domestic oil and gas wells in America, account for 68 percent of domestic oil production and produce 82 percent of the country's domestic natural gas.
Domestic production itself only accounts for about 40 percent of U.S. oil needs, with imports making up the rest. But independent producers say they play a key role in reducing America's dependence on foreign supplies.
Anybody that produces anything should be very concerned if the RATs take over any sector of our government.
FACT.
If it happens lets hope our President learns to use the veto stamp.
Reuters is really driving me up the wall with this horse hockey of Dims retaking Congress.
The democrats think that producing oil involves "shooting at some food and up from the ground comes a bubblin crude"
Therefore riches from oil should be excessively taxed.
In reality, it is pretty hard to produce oil and it should be encouraged, not taxed.
This will be vetoed with the reason being that Jimmy Carter's oil policies screwed up our country. Plenty of people are old enough to remember that time.
It's not the production/procurement of crude oil, it's the stock market speculation, refining and distribution sectors that actually impact liquid gasoline consumer costs.
My own electric bills are high, not even remotely tied to "Big Oil", but driven by fluctuations in "Big Natural Gas".
An entirely different energy source, unrelated to the Middle East.
People need to educate themselves.
New England is hostile to the oil industry. The irony is that until the "Big Inch" was built during world War II, they had to depend on coal, and in winter their cities were as sooty as the inside of a chimney. Then, with the end of the war, Texas oil still flowed to the East. They got used to it, and even more used to the cheaper Mideastern oil which almost ruined the domestic industry. I think easterners hate the fact they are dependent on oil and that it profits other sections of the country.
Ftures determine the price of crude far more than the actual balance between supply and demand. There is no shortage of crude on the market.
Trader pay a price for future contracts of oil because of the supply and demand.
Comps to ya, mate!
The "supply and demand" aspect is high speculative. The futures market is more like betting on the horses than a strict science.
Who is/are the last little company that has made it big in any socialist or communist country?
Crickets chirping....
Natgas is volatile in price in exact proportion to the restrictions put on its production by the envirotwits, the anti-industry crowd, and political convenience, plus of course due to weather circumstances and the refusal of particular political groups to allow the building of a proper pipeline system.
Rant as you like about ''big Natural Gas'', no complaint from me, have a good time -- but this is simply false-to-fact. For just nearly two decades, the price of natgas was decontrolled by gov't action. Result? From 1981 to just before the extremely harsh winter of 2000-2001, the price of natch stayed well below $4.00/MMBTU, except on one quite memorable occasion. And, the mkt being left to itself, that occasional event was very short-lived, and prices reverted to normal historical levels very quickly (EXACT dates and prices available at your request).
Natch has now been, effectively, REcontrolled, willy-nilly, by the assorted greenieweenies, gutless pols, and anti-free mkt bunch...and there is a considerable overlap among these groups. Result? Prices are extremely unstable, and far higher than they ''should'' be in a normal mkt.
Yes, there is an incontrovertible relation between natch and crude prices. It's usually called the ''BTU spread'', and this spread has been historically quite outrageous for a couple of years, both regarding its level and its volatility.
You want natgas prices to return to historical levels? Fine, so do I. Won't happen until the jagoffs and assorted Regresscritters begin keeping hands-off the industry, which in turn won't happen until voters fire the incompetent and economically illiterate clots who dictate what can be drilled and where and when, and how many times a would-be producer must daily bow toward either Mecca or D.C.
You can't have it both ways. Either you tell the D.C. dorkasauruses to STFU and go away (which you do by firing their asses at the polls), or you don't. If you don't, you will -- ABSOLUTELY WILL -- get continuing instability in natgas pricing and energy pricing generally.
Pays you money, takes you pick. (And, btw, no, I am not involved in the natgas industry these days, except as a trader occasionally, which means directly that **I** prefer some degree of price stability, too).
FReegards!
However, the gov't under which they work, by formal economic definition, is neither socialistic nor Communistic. It is fascistic, specifically in the Mussolinian sense, in that they are allowed to profit as a quasi-private enterprise, as long as they don't squawk about the gov't telling them what to do and how to do it at assorted times.
My apologies for the typo.
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