Obama Not Backing Off On Gulf of Mexico Drilling Tax

Source: wsj

WASHINGTON (Dow Jones)--The Obama administration is sticking with a plan to raise about $5 billion over 10 years through a new excise tax on oil and gas production in the Gulf of Mexico out of its proposed fiscal 2010 budget, a senior administration official said Thursday.

The comment came after the White House released new details of a budget that showed it is also sticking with other plans to eliminate $26 billion in tax breaks for oil and gas companies. Half of that would come from eliminating a tax break for domestic oil and gas production. Companies say the tax measure keeps jobs in the U.S.

"Oil and, to a large extent, gas are internationally traded commodities and their prices are determined on the world market," the White House said in justifying the tax plans. "As a result, domestic oil and gas production subsidies do not significantly reduce the prices that consumers pay for products such as gasoline and home heating oil, resulting primarily in higher returns to the oil industry."



Read more: http://online.wsj.com/article/BT-CO-20090507-725172.html

I just don't want to pay for expensive gas again.
Whatever Obama does is oK, but raise the price of GAS, FOOD, ENERGY from my pockets is not OK WITH ME.

It was SPECULATION NOT TAXES!

on offshore wells due to a conveeeeenient "oversight" by the *Bush administration.

http://www.citizen.org/pressroom/release.cfm?ID=2711
July 30, 2008

Oil Companies Escape Billions in Royalty Payments to Americans; Drilling Expansion Will Enrich U.S. and Foreign Corporate Freeloaders

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

A bureaucratic oversight has allowed 24 oil companies to avoid more than $1.3 billion in royalties for the privilege of extracting oil and natural gas from U.S. territory in the Gulf of Mexico - with foreign companies responsible for 55 percent of that total. But this $1.3 billion in forgone royalties pales in comparison to the $60 billion that Americans stand to lose in royalty revenue over the life of these leases. And if Congress repeals the moratorium on Outer Continental Shelf (OCS) drilling that has existed since 1982, these freeloading oil companies will be eligible to bid on new leases, providing them with more record profits while American families are left holding the bag. These 24 companies have posted a combined $365 billion in profits since 2006.

The list of the specific companies comes from a February 2008 U.S. Department of Interior memo recently obtained by Public Citizen. Four of the 24 companies (BP, Marathon, Shell and Walter Oil & Gas) signed voluntary agreements to pay royalties going forward, but they will not be required to pay the more than $200 million taxpayers have been denied on production that already has occurred.

I do not want higher energy prices but higher fossil fuels make alt energy more reasonable. Plus, the oil companies can't be allowed to hold us hostage! They make record profits every year so it is time they play ball on a level playing field! I agree with Obama 110%

Call me what you want but I voted for Obama to do exactly what he has been doing! I find it very nice to see a President actually working toward ideas he campaigned on!

They didn't have a good side last year for quite a few Americans who found themselves having to buy less at the grocery store because of everyone including the grocery stores having to pay more at the pump.

The reality of the oil and gas industry is there's oil and gas elsewhere and they will go drill elsewhere. Which will not result in alternative energy development. Only higher prices at the pump.

Less drilling means less taxes. And just higher prices at the pump. And higher taxes for us at some point.

I'd rather have lower prices at the pump and have Congress spend more time, and money, on alternative fuel development. If they can do it in Brazil, we can do it here. We just aren't doing it.

Yes, people had to struggle and that is not good. However, if you follow alt energy companies you would have seen the flow of capital that was going into alt energy companies when oil prices were skyrocketing...The money slowed due to oil prices and the economy. As far as Oil companies drilling elsewhere, well, that simply is not true either...The Earth is running out oil that is easy to get to and regardless of whether oil prices go up now or next year they are going back up and much higher than they did before! China & India is all I have to say! So, high prices now will get the ball rolling much faster toward alt energy research. That is the idea behind Cap n Trade and the idea behind what Obama is doing here...I know it may be uncool to praise the President around here on certain days but the man knows exactly what he is doing! Pay now or really pay later but you and I and everyone will pay! So, if I were you I would get ready for very high oil prices! Paying subsidies to oil companies does nothing to the price at the pump! Oil is sold on the international market regardless of where it comes from. Say what you will but very high oil prices are right around the corner regardless of what Obama does now. So we need to get moving now and end all the oil subsidies and babying of the oil companies and put that money into alt energy research just as Obama is trying to do! High oil prices wake people up to the cliff we are going to run off if everyone sits around wanting to keep giving oil companies money due to the false idea it will keep gas cheap.

but because most of the large oil fields are inaccessible.

We have this funny 1930s view of the world, where US oil companies go where they list and drill as they like. Russia, Indonesia, Mexico, Brazil, Venezuela, Sa'udi Arabia, Iran, even Iraq own their oil and have national oil companies. They may request assistance, but the income is limited by contract and, as we've seen, those countries aren't shy about using their clout in their own political interests.

The result of higher production expenses won't be immediately higher prices, esp. since this tax will apply to already producing oil fields. It will reduce new drilling, reducing in decreased supply unless prices increase. The decreased supply, esp. if oil demand is inelastic and supplies tight, will lead to higher prices. But the excise tax will not be directly responsible, so the WH's pronouncements are right. Misleading and self-serving, but technically right. (Just as the "it depends on what the meaning of 'is' is" wasn't wrong. Just greasy and insanely uncooperative. I hate lawyers because they rest on a basis of non-cooperativeness in conversation, while most non-technical conversation assumes *cooperativeness*. Politicians know that there's this gap, and exploit it for all they're worth.)

There is no reason to raise the price of gas. their profits are disgustingly high. They raise the price of gas when they feel like it. LUckily people started using less.

I doubt it would move prices more than a few cents.

Now, they might use it as a rationale to boost prices but it would be horseshit.

areas which still languish post-Katrina.

If Louisiana simply had mineral rights equal to Texas' regarding how far offshore the revenue from oil drilling must be shared with the state, we could pay to fix our own levees and wetlands many times over with no help from the feds.