Posted on 06/19/2008 1:54:20 AM PDT by bruinbirdman
Suppose for a moment that Congress listens to President Bush's remarks Wednesday and removes the decades-old ban on offshore drilling for oil and natural gas on the Outer Continental Shelf. Who wins, aside from the oil industry?
Uncle Sam, of course.
Why? Because the U.S. government collects royalty payments and upfront cash from oil companies that lease federal lands for oil and gas exploration and production.
The U.S. Interior Department's royalty rate for deep-water drilling in the Gulf of Mexico is 18.75%--up from 12.5% two years ago. This move helped the government take in $7 billion in offshore royalties, rents and bonuses from oil companies drilling in U.S. waters last year.
The government's take would undoubtedly increase if the offshore drilling ban were lifted, though by how much is not immediately clear.
Royalty revenue-sharing agreements would have to be worked out between the states and the feds. One government official estimates that if enough land were made available for drilling, the upfront cash paid to Uncle Sam for one lease agreement could reach $1 billion.
But it's not all about the federal coffers. Plenty of businesses outside of the Beltway stand to make some handsome gains as well. Though profits would most likely ripple throughout the industry, Chevron (nyse: CVX), Shell, BP (nyse: BP) and Anadarko Petroleum (nyse: APC), which have some of the largest offshore operations in U.S. waters, are the most likely winners.
(Excerpt) Read more at forbes.com ...
I suppose we’ve veered to far into generalities here to actually get anywhere.
You seem to be more forgiving than me. At least for now. I’m not feeling very forgiving these days.
The Democrat leadership are hard core socialist. They will tell you that what they believe is good for America and the world. It is only after Marxine "Muddy" Waters slipped the "N" word (nationalize) in her interrogation of oil company executives that other Leftists in congress now flat out admit they want to socialize private enterprize.
Most Democrat voters are just unwitting dupes of communist populism/propaganda.
yitbos
Great letter! I will be writing and contacting my members of Congress too but don’t have much hope with the likes of Martinez and Nelson. Just maybe Martinez will be on the right side of this issue!
The Pres, Polar Bear Bush, mentioned today that offshore drilling could result in holding the current rate of domestic production steady for a decade.
He is thinking rightly about this. Nothing will result in an actual increase of domestic oil production.
Production as a whole is interesting to observe from a layman's perspective.
The Saudi's say they are producing at a level to which they have contracts.
The world appears to have an amazing equilibrium of production to consumption, what OPEC has always had as a goal, no cheaters.
Nigerian rebels knock out 200K bbls of production, Saudi increases output 200K.
China and India consume more, Canada produces more from oil sands.
I am particularly interested in BTU costs and parity of natural gas vis a vis oil.
yitbos
It is interesting. In the history of petroleum it is an impossible miracle. What is responsible? GATT? NAFTA? Pres Bush? Pres Clinton?
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