10.01.2008 0

Day 46: The Pelosi Fraud

  • On: 10/22/2008 14:39:10
  • In: Energy Crisis, Global Warming Fraud, and the Environment
  • Day 46: The Pelosi Fraud

    House Speaker Nancy Pelosi has repeatedly charged that she will not allow the House Republicans—who have been pushing for an up-or-down vote on their American Energy Act—to perpetrate a fraud upon the American people. Her charge has been that increasing drilling would not immediately decrease prices at the pump.

    Since then, she has moved in the direction of more drilling, at least rhetorically, in light of ever-increasing public pressure to increase energy production. But it is she who has attempted to dupe the American people—into believing that she actually wants to drill for more oil and natural gas.

    She does not, and America will not, if the House Democrat plan on energy becomes law.

    Consider the following from the Institute for Energy Research:

    “According to the summary released by the Speaker of the House, the new “compromise” would:

    • “Institute a permanent ban out of 50 miles.
    • “Permit leasing between 50 and 100 miles offshore if a State ‘opts-in’ to allow leasing “off its coastline by enacting state law.
    • “Continue the ban on energy production in the Eastern Gulf of Mexico.
    • “Lift the ban on energy production beyond 100 miles.

    “To the casual observer, this certainly seems like a reasonable compromise. Unfortunately, it’s not. It’s a bait and switch. Here’s why:

    • “A permanent ban out to 50 miles locks-up the largest known offshore energy reserves, including those off the coast of California, that are close to existing infrastructure and be produced the fastest.
    • “The plan permanently bans access to 97 percent of the 10.527 billion barrels off the coast of California. It allows the State to decide whether to produce just 3 percent, or 287 million barrels, which is highly unlikely anyway. The remainder…10.24 billion barrels…is off limits.
    • “Keeping the Eastern Gulf of Mexico off limits also denies access to large reserves located close to existing pipeline infrastructure. The plan keeps an estimated 3.65 [billion] barrels of oil and 22 trillion cubic feet of natural gas off limits
    • “The offshore areas surrounding the State of Alaska are not currently subject to any bans. This plan appears to institute a 50-mile ban around energy-rich Alaskan shore for the first time ever. Energy exploration there is just beginning.
    • “While the plan enables the states to “opt in” and produce energy between 50 and 100 miles, it lacks a revenue sharing mechanism, thereby making it highly unlikely that state would chose to do so. In the case of energy production on federal lands – both onshore, and offshore in the Gulf of Mexico, states split production revenues with the federal government. Denying the states this incentive effectively prevents new production.

    “Of the 18 billion barrels of oil locked-up by current bans, the new plan allows access to less than four, and perhaps as little as 2 billion barrels. And without revenue sharing, even the four states most likely to allow production – Virginia, North Carolina, South Carolina, and Georgia – would not do so.”

    In short, the new bill lifts very few of the current restrictions on drilling, and makes permanent those restrictions that now have to be renewed on an annual basis in order to remain law. The real solution is to permanently repeal the current restrictions.

    This bolsters ALG News’ report of last Friday exposing the legislation as a means of the Democrats pretending that they are in favor of drilling while sealing off energy resources while passing off the actual decision-making on new drilling to states that may not want it.

    Bottom line on who decides whether or not to drill: America needs a national energy policy, not 23 state-by-state policies. And there is no reason why those states should potentially be able to hold the other 27 hostage from much-needed oil resources.

    And make no mistake: she means to “protect” the states from more drilling. Consider the following story, “Pelosi promises to protect Fla. from oil drilling”:

    “As Republicans increasingly call for more domestic offshore drilling, Florida’s Democratic House members said they convinced Speaker Nancy Pelosi to make sure drilling off the state’s gulf coast isn’t included in energy legislation being considered in her chamber.

    “A House bill would maintain a ban on drilling within 125 miles of the Panhandle, as well as a buffer around the rest of the state’s beaches, at least until 2022.”

    Is that what Madame No means by “responsible drilling”? That’s what we call a swindle.

    In addition, Madame No has been demanding that if there is to be new drilling, that the oil companies need to pay for it. Her implication is that under the House Republican proposal or by simply allowing the moratoria on off-shore drilling to expire, no new revenue would be generated to federal and state coffers.

    However, as noted by the Wall Street Journal, engaging in new leasing could potentially generate as much as $2.6 trillion in revenue for the federal and state governments:

    “Allowing drilling isn’t the giveaway to industry that Speaker Nancy Pelosi and environmentalist dead-enders claim. In fact, liberating publicly owned resources could net the Treasury as much as $2.6 trillion in lease payments, royalties and corporate taxes, according to one estimate currently knocking around Capitol Hill. The returns wouldn’t roll in overnight, but that’s almost a full year of spending even for this spendthrift Congress.

    “Already, with the ban in place, offshore development is one of the federal government’s greatest sources of nontax revenue, amounting to $7 billion and change in 2007. Energy companies bid competitively to acquire leases upfront, then pay rents. The feds are also entitled to a royalty on the market value of oil and gas when sold. Corporate income taxes on producer profits add to the bank.

    “All told, studies (some industry-funded, some independent) estimate that the total government take from leases in the Gulf of Mexico ranges from 37% to 51%, depending on the location of the lease. The take is somewhat higher is Alaska.

    “If the ban were lifted, how much Congress might rake in depends on how much oil and gas is recovered, as well as energy prices, royalty rates and taxes at any given time. A 2007 study by University of California economists Matthew Kotchen and Nicholas Burger concludes that opening up a small portion of the coastal plain of the Arctic National Wildlife Refuge would generate $251 billion in government and state revenue, with oil at its 2005 price of $53 per barrel. Prices are now double that.

    “And that’s just for a patch in Alaska. The $2.6 trillion estimate, prepared by John Peterson (R., Pa.) and Neil Abercrombie (D., Hi.), is a back-of-the-envelope calculation from exploiting the 86 billion barrels of oil and 420 trillion cubic feet of natural gas that the Department of the Interior determines are undiscovered but “recoverable” on the Outer Continental Shelf. And these volumes are almost certainly too conservative.”

    So, what is Ms. Pelosi complaining about? By lifting current drilling restrictions, the federal government would generate a fortune of revenue. And under the House Republican proposal, which provides for revenue sharing, coastal states would be included in the game.

    In her efforts to defeat actual drilling proposals, it appears Madame No is playing loose with the facts. She doesn’t want more drilling, and she doesn’t care about increasing energy production.

    The only fraud here is House Democrats pretending that they want to drill for more oil and natural gas. Don’t be fooled.

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