Heading For a Showdown
It’s obvious that we’re heading for a showdown between Senate Democrats and ‘Big Oil’. The Senate is ratcheting things up with their (non) energy plan. Here’s a few details of their non-plan:
The Democrats’ energy package also would:
- Make oil and gas price gouging a federal crime, with stiff penalties of up to $5 million during a presidentially declared energy emergency.
- Authorize the Justice Department to bring charges of price fixing against countries that belong to the OPEC oil cartel.
- Require traders to put up more collateral in the energy futures markets to curb speculation.
This isn’t productive. Then again, the Democrats have been unproductive for the most part since retaking the majority. (I’m thankful for that because their agenda is radical.) As I said here, increasing taxes on oil companies while preventing them from producing more oil here at home is counterproductive.
The only thing it’s good for is to have Democrats thump their chests and say ‘We’re punishing evil big oil’. It apparently isn’t important that they’ve done nothing to be part of the solution. In fact, it apparently isn’t that important that they’re part of the problem.
People are looking for solutions. The Democrats’ plan (I’m using the term loosely) isn’t a solution; it’s a political ploy. If Republicans keep pushing Newt’s plan, they’ll quickly be seen as having a solution. If Republicans are seen as having the solution, they’ll get a big fundraising lift and in the polls.
I’m confident, too, that first term Democrats running in the South will be on the hot seat the more the increased exploration agenda is pushed. That’s a good thing because it puts the Democrats on the defensive. They either let these freshmen do what they want or they put them on the endangered species list.
Oil executives, testifying before Congress last month, called the proposed taxes “punitive” and warned that they would discourage domestic oil and gas exploration and production, possibly causing prices to rise instead of fall.
The American Petroleum Institute, which represents the major oil companies, has been reminding lawmakers that in the early 1980s, when the government imposed windfall profits taxes on oil companies domestic oil production dropped and imports increased.
But Democrats reject the comparison.
Democrats can reject the comparison all they want. That won’t change the public’s opinion that they want lower gas prices. It won’t be difficult to prove them wrong. A simple Google search would undoubtedly produce headlines and articles that would show people what happened.
Most Senate Republicans have a different approach to dealing with the growing energy crisis: pump more oil and gas.
The GOP energy plan, rejected by the Senate last month, calls for opening a coastal strip of the Arctic National Wildlife Refuge in Alaska to oil development and to allow states to opt out of the national moratorium that has been in effect for a quarter century against oil and gas drilling in more than 80 percent of the country’s coastal waters.
“Republicans by and large believe that the solution to this problem, in part, is to increase domestic production,” said McConnell.
Democrats won’t let this happen but that’s ok. Republicans will be able to point to the Democrats’ standing in the way of lowering prices during the fall campaign. I’m betting that the American people will trust Republicans, if for no other reason than that they have a coherent plan.
Everyone knows that renewables and other alternative energy sources must be part of the solution but they know that everything has to be on the table. Here’s a question for Democrats:
Why would you unilaterally make anything offlimits in finding a solution to this crisis?
The D’s don’t have an answer for that question. That’s because they shouldn’t make any capability offlimits in brainstorming for a solution to this crisis.
Technorati Tags: Oil Crisis, Oil Production, Oil Exploration, Windfall Profits Tax, Dick Durbin, Mitch McConnell, Newt Gingrich, Election 2008
Cross-posted at LetFreedomRingBlog
June 10th, 2008 at 12:51 pm
Does anyone think that increasing taxes on oil companies would reduce prices?
June 10th, 2008 at 1:52 pm
Thanks for linking to our “Drill Here, Drill Now, Pay Less, petition. With nearly 500,000 signatures, this message is resonating with the American people.
June 10th, 2008 at 7:37 pm
oil companies make hi profits, hi profits come from hi income which would make for hi taxes in the first place. so why tax them more. even more the people invested in oil companies make a high return on their investments and they pay taxes on that, so why the windfall profits tax?
June 11th, 2008 at 7:01 am
Because windfall profits tax allow airheaded grandstanders like Chuck Schumer to get his face time with NBC.
This Congress is like the California General Assembly, the less they do, the safer I feel. These people are totally clueless about the global economics of oil. They would rather rather artificially increase the price of oil and send even more money overseas to be used against us that admit the consequences of their own pigheaded environmental policy.
June 11th, 2008 at 10:32 pm
The only way there would be incentives for most people to invest in renewables and other alternative energy sources is if they were competitive with oil. And the only way that they can be competitive with oil is if the price of oil was high enough that alternative energy sources and renewables can compete.
June 12th, 2008 at 3:17 pm
The competitive price can come later. Private industry has traditionally had the economic acumen to do the research first, then use the results as they become economically viable. If there is an alternate source of energy for our transportation, private industry should be finding it and, when it can make a profit from it, start producing it in quantities large enough to keep the profits.
The government has no business being in the business of business. It (government intervention), demonstrably every time, just drives up the cost of doing business. Donkeys know that, but fools still like to believe in boogymen (like greedy capitalists) and still buy the donkey line hook, line and sinker. That’s why Hussein is so dangerous.