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Title: 3 Myths About the Oil and Gas Industry
Source:
FNC
URL Source: http://www.foxnews.com/opinion/2011/05/12/3-myths-oil-gas-industry/
Published: May 12, 2011
Author: Bob Beauprez
Post Date: 2011-05-12 13:08:23 by Badeye
Keywords: None
Views: 8308
Comments: 13
3 Myths About the Oil and Gas Industry By Bob Beauprez Published May 12, 2011 | FoxNews.com Print Email Share Comments (28) Text Size As voters around the country wince at rising gas prices, panicked Democrats, in a rush to cover the failure of their all-or-nothing bet on the alternative energy industry have started singing a familiar tune – blame the oil and gas industry. Instead of facing the reality of his owned failed policies, President Obama is calling for an end to the "tax giveaways" he claims amount to $4 billion in “subsidies” to the energy industry. This tactic isn’t surprising given the effect that rising gas prices have on the president’s approval ratings and his obsession with re-election. But, less-than-truthful innuendos and political spin hardly helps America's working families who are getting hammered at the pump. If our leaders are going to have an honest discussion about energy, it's important to clear up a few rumors, misconceptions and outright falsehoods being perpetrated about the oil and gas industry. Let's begin with three of the more common ones: 1. The industry doesn’t receive any taxpayer funded subsides. None. 2. Rampant speculation and Wall Street tricks aren’t driving up gas prices. 3. The oil and gas industry is not dodging the taxes they owe and withholding “their fair share.” I'll say it again; contrary to popular opinion and the president's spin, the oil and gas industries do not receive any taxpayer funded subsidies. The tax code does allow them to claim certain tax credits and deductions to encourage continued investment in an industry that is heavily front-end loaded with capital expense. These are the same kind of incentives available to Coca-Cola, General Electric, Ford, and Microsoft and other companies doing business in the U.S. Or, for that matter, like the deduction for mortgage interest payments enjoyed by homeowners. But, importantly these are tax credits, and markedly different from direct taxpayer cash subsidies like the 45 cent per gallon payment blenders get to put ethanol in fuel mixes. When businesses invest in America, we all benefit. The oil and gas industry plows about $300 billion into domestic projects per year – that's 75 times more than Obama's phantom "taxpayer giveaways" amount -- and employees over 9 million people. Those are real numbers; not Washington spin, and if government would allow and encourage even more domestic production there would be more jobs and more investment – and more total taxes paid, too. Another argument that often circulates when gas prices go up is that a phantom class of “Wall Street speculators” is to blame for the increase of prices. In 2008 this school of thought was so persuasive that President Bush commissioned an exhaustive review, via the Commodity Futures Trading Commission, looking into the effect that speculators had on market prices. Their conclusion was surprising, according to The Wall Street Journal, “The agency concluded that speculators—otherwise known as traders—were putting downward pressure on prices. The liquidity they provide helps to smooth volatility.” Not satisfied with the 2008 study, President Obama recently resurrected this school of thought, even tapping Attorney General Eric Holder to police perceived illegal activity and price gouging. Yet within the presidents’ own administration, the Federal Trade Commission found that the recent spike in oil prices is due primarily to normal market forces, including booming demand from developing economies in India and China and not because of any questionable behavior from Wall Street. The third popular attack is that somehow oil and gas industry isn’t paying its fair share in taxes. Democratic Party mythology aside, the oil and gas industry pays a much heftier percentage of net income in taxes (41.1%) than the average of all other S&P Industrials (26.5%). Every single day, the industry is sending more than $85 million to the U.S. Treasury for taxes and royalty payments. Yes, the energy companies are profitable, but their profit margins are right in line with manufacturing, aerospace, and the food industries, while computer, pharmaceutical, and the beverage companies have triple the net income margins of traditional energy. I don't like subsidies and I don't like Congress or the IRS deciding what is good economic behavior and what is bad. But, I do understand that you get more of what gets incentivized, and less of what is penalized. And, there is a huge difference in "redistributing the wealth" through direct subsidy payments, and a tax credit that encourages investment in much needed production that creates jobs and taxable income. If congress is serious about creating jobs and jump starting the economy, they should lower the corporate tax rate, which is the highest among the 34 OECD nations, rather than increase the tax burden on energy or any industry. Capital is fungible, and energy production is the prototypical global industry. Plenty of nations around the world are providing a far more welcoming business environment for energy production than the U.S. already with a less onerous tax code and far less regulatory burden. If increasing our domestic supply is really a national objective, then this might not be the best time to send exactly the opposite message to the people that provide the capital to drill the wells. Bob Beauprez is a former member of Congress from Colorado with successful careers as a dairy farmer, community banker, and real estate development. He has published his first book, publishes a public policy website, A Line of Sight.com, and operates a buffalo breeding ranch in the Colorado mountains.
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#1. To: All (#0)
Thats right, folks. The oil industry does NOT receive 'subsidies'. Anyone that tells you different is simply lying.
Proxy IP's are amusing.....lmao
Domestic oil production has increased since Obama became President: Halliburton's 1Q investor report noted: Those that keep screaming "drill baby drill" and "all we need to do to reduce gas prices is increase domestic production" ignore an awful lot of facts; including that it takes about 10 years to see any production after new permits are approved, that even under the most optimistic scenarios, global demand will rise faster than global production (we certainly aren't going to force oil companies to sell their oil into the U.S. market, right?), and energy companies shouldn't be expected to act in ways that reduce their profits. They are in business to maximize shareholder value. As long as high gas prices are bringing in record profits, why would they want anything to change?
"Thats because your basically and idiot." And tell us, why does he feel the need to lie about this? He claimed THIS WEEK 'Domestic oil production is at all time highs!' Thats simply a lie, a flat out LIE. And voters know it. Dumbass.
Proxy IP's are amusing.....lmao
The only one lying here is you. And http://www.politifact.com/truth-o-meter/statements/2011/mar/15/barack-obama/barack-obama- says-us-oil-production-last-year-was-/ Annual production of domestic oil: 2003: 2,073,453,000 "Thats because your basically and idiot." Thats simply a lie, a flat out LIE. And voters know it. Dumbass. btw, even Baby Fat Landrieu threw Owe-bama under the bus on this one, TODAY. Dumbass. Try to keep up.
Proxy IP's are amusing.....lmao
"Thats because your basically and idiot." Proxy IP's are amusing.....lmao
"Thats because your basically and idiot." What else is new? That's going to leave a mark...(chuckle)
Chuckle. Some things never change, right Fred?
"Thats because your basically and idiot." Wrong as usual Freddie. None of you are worth a lie to me. I know, I know, its important for your self esteem to belive otherwise.
Proxy IP's are amusing.....lmao
Remember Fred, in the immortal words of George Constanza "it's not a lie, if you believe it" I've noted time and time again that Badeye is our board's equivalent of George, a guy who if he only did the opposite of what his instincts tell him to do, would find success. :-)
"Thats because your basically and idiot." Dumbass, you note things about me when confronted with things you can't dispute. Like there are no oil subsidies.
Proxy IP's are amusing.....lmao
#2. To: Badeye (#1)
and if government would allow and encourage even more domestic production there would be more jobs and more investment – and more total taxes paid, too.
Halliburton’s consolidated revenue in the first quarter of 2011 was $5.3 billion, compared to $3.8 billion in the first quarter of 2010…These increases were attributable to increased activity in United States land…
“I am extremely pleased with our Q1 results, as overall revenue in the first quarter set a company record of $5.3 billion. North America delivered strong performance as margins progressed due to increased activity…” said Dave Lesar, chairman, president and chief executive officer.
Badeye posted on 2011-04-29 10:30:22 ET
#3. To: go65 (#2)
Domestic oil production has increased since Obama became President:
#4. To: Badeye (#3)
“We’re adapting. We’re producing more oil, and we’re importing less,” he remarked.
“Now, the hard truth is, is that as long as our economy depends on foreign oil, we’ll always be subject to price spikes,” he noted.
He indicated that “our oil production reached its highest level in seven years. Oil production from federal waters in the Gulf of Mexico reached an all-time high,” adding that “for the first time in more than a decade, imports accounted for less than half of what we consumed.”
So Obama is right that American oil production is at its highest level since 2003
2004: 1,983,302,000
2005: 1,890,106,000
2006: 1,862,259,000
2007: 1,848,450,000
2008: 1,811,817,000
2009: 1,956,596,000
2010: 2,011,856,000
Source: U.S. Energy Information Administration
Badeye posted on 2011-04-29 10:30:22 ET
#5. To: go65 (#4)
He claimed THIS WEEK 'Domestic oil production is at all time highs!'
#6. To: Badeye (#5)
So Obama is right that American oil production is at its highest level since 2003
Badeye posted on 2011-04-29 10:30:22 ET
#7. To: go65 (#6)
btw, even Baby Fat Landrieu threw Owe-bama under the bus on this one, TODAY. Dumbass.
#8. To: Badeye (#7)
So Obama is right that American oil production is at its highest level since 2003
Badeye posted on 2011-04-29 10:30:22 ET
#9. To: go65 (#4)
The only one lying here is you [Badlies].
#10. To: Fred Mertz (#9)
What else is new?
Badeye posted on 2011-04-29 10:30:22 ET
#11. To: Fred Mertz (#9)
#12. To: Badeye, Fred Mertz (#11)
Wrong as usual Freddie. None of you are worth a lie to me.
Badeye posted on 2011-04-29 10:30:22 ET
#13. To: go65 (#12)
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