Obama Dropped Offshore Tax on Big Oil:

Obama’s Drill To Nowhere

"....Here’s why Obama’s political move to open up our coasts to more drilling is wrong.
1. Opening up offshore areas to drilling hurts efforts at a climate deal – not helps. On March 23, ten coastal state Senators wrote a letter to the ad hoc Senate climate crew of Kerry-Lieberman-Graham warning that they “cannot support legislation that will . . . put our coasts at greater peril”. They note the environmental concerns that offshore drilling presents, but also highlight the unfair proposal of allowing coastal states to keep a sizable portion of the royalties rather than share that revenue with all states and taxpayers. The letter was signed by Democratic Sens. Bill Nelson (Fla.), Robert Menendez (NJ), Sheldon Whitehouse (RI), Barbara Mikulski (Md), Ben Cardin (Md), Frank Lautenberg (NJ), Ted Kaufman (Del), Ron Wyden (Ore), Jeff Merkley (Ore) and Jack Reed (RI).

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......Opening up “access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030“. The Energy Information Administration estimates that if the ban on drilling remains in place, that “the average U.S. price of motor gasoline price is 3 cents per gallon higher” than if we open these areas to drilling. That’s because the US isn’t Saudi Arabia: we sit on only 1.6% of the world’s oil reserves, while the Saudis have 20%. Dumping our little pond of oil into the giant sea of global reserves can’t make a significant dent on our imports or impact prices


......taxpayers on existing drilling leases is unfair. Now, we’ve written extensively about this over the years. Because of a bureaucratic oversight by the Department of Interior during the implementation of the Deep Water Royalty Relief Act of 1995, oil companies that secured leases in 1998 and 1999 were exempted from royalties, regardless of the prevailing market price of oil. Recent lawsuits have exposed more leases going back to 1996 to this same loophole. This stands in stark contrast to other, similar leases, which require the payment of royalties if the price of oil exceeds a certain threshold. The day the bill was signed in November 1995, West Texas Intermediate oil was trading at $18.28/barrel. With oil now trading at roughly $80/barrel, these companies have been and will be extracting very valuable energy from public land without paying any royalties to American taxpayers. The GAO estimates the loss to the US Treasury of more than $50 billion over the life of these royalty-free leases – a huge subsidy for Big Oil. And investigations have found serious problems in the management of the entire royalty program.

As recently as August 25, 2009 - when President Obama submitted his Mid-Session Review budget to Congress – he recognized this fleecing of the taxpayer by Big Oil and proposed a “Levy tax on certain offshore oil and gas production” as a back-door way to capture some revenue from these no-royalty leases, raising $6 billion over a decade.........But in Obama’s budget submitted in February, the Administration has now dropped this offshore tax on Big Oil (you can see the itemization of repealed oil & gas tax breaks on page 30 of 88 at the above link, with the new levy tax now gone)......Obama puts a lot at risk with this offshore drilling plan and gets little reward. What a disappointment.

http://publiccitizenenergy.org/2010/04/01/obamas-drill-to-nowhere/


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BP Is Criticized Over Oil Spill, but U.S. Missed Chances to Act

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......The federal government also had opportunities to move more quickly, but did not do so while it waited for a resolution to the spreading spill from BP, which was leasing the drilling rig that exploded in flames on April 20 and sank two days later. Eleven workers are missing and presumed dead.

The Department of Homeland Security waited until Thursday to declare that the incident was “a spill of national significance,” and then set up a second command center in Mobile. The actions came only after the estimate of the size of the spill was increased fivefold to 5,000 barrels a day.

The delay meant that the Homeland Security Department waited until late this week to formally request a more robust response from the Department of Defense, with Ms. Napolitano acknowledging even as late as Thursday afternoon that she did not know if the Defense Department even had equipment that might be helpful.

By Friday afternoon, she said, the Defense Department had agreed to send two large military transport planes to spray chemicals that can disperse the oil while it is still in the Gulf.

Officials initially seemed to underestimate the threat of a leak, just as BP did last year when it told the government such an event was highly unlikely. Rear Adm. Mary E. Landry, the chief Coast Guard official in charge of the response, said on April 22, after the rig sank, that the oil that was on the surface appeared to be merely residual oil from the fire, though she said it was unclear what was going on underwater. The day after, officials said that it appeared the well’s blowout preventer had kicked in and that there did not seem to be any oil leaking from the well, though they cautioned it was not a guarantee.
BP officials, even after the oil leak was confirmed by using remote-controlled robots, expressed confidence that the leak was slow enough, and steps taken out in the Gulf of Mexico aggressive enough, that the oil would never reach the coast.
(The NOAA document on a potentially far larger leak, first obtained by The Press-Register in Mobile, Ala., was described by an agency spokesman as simply a possibility raised by a staff member, not an official prediction.)

Some oil industry critics questioned whether the federal government is too reliant on oil companies to manage the response to major spills, leaving the government unable to evaluate if the response is robust enough.

“Here you have the company that is responsible for the accident leading the response to the crisis,” said Tyson Slocum, director of Public Citizen’s Energy Program. “There is a problem here, and the consequence is clear.”

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http://www.nytimes.com/2010/05/01/us/01gulf.html?ref=science

Unrecs are certainly not a worthy topic of the first post to a thread, as it ends up being a complete distraction and diminishes all discussion that follows. Someday in the future, all DUers will accept that folks have a right to unrec or rec once as they see fit. Think of it as a vote. Voting is good, no?

I hate to sidetrack a good thread, but unrec is much more useful to posters who are part of a group, than for lone wolves.

**now watch and see how fast the apple polishers delete this one...but NEVER anything similar from________ group lol

and, it does seem as if several have the day off today;

only two or three appear to be on duty

for this, if true:

But in Obama’s budget submitted in February, the Administration has now dropped this offshore tax on Big Oil (you can see the itemization of repealed oil & gas tax breaks on page 30 of 88 at the above link, with the new levy tax now gone)......Obama puts a lot at risk with this offshore drilling plan and gets little reward.

interesting.

http://trueslant.com/level/2010/04/30/obama-shares-blame-for-failing-to-prevent-gulf-of-mexico-oil-spill/



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The agency charged with enforcing safety regulations on offshore oil rigs is the Minerals Management Service, nestled within the Department of Interior. The MMS, you might recall, was implicated in a doozy of a scandal toward the end of the Bush administration. The part of the agency that was supposed to be ensuring the federal government collected royalties owed to the American people by companies drilling on federal lands had been completely bought off by the very corporations they were regulating. Justin Rood, then at Talking Points Memo, memorably named the scandal ‘sex-for-oil‘ because of findings of ‘improper social ties’ between MMS staff and oil and gas industry executives (oh yeah, they also called it ‘Lubrigate‘). And that was just the salacious part of the scandal – the financial loss to the American public as a consequence of the cozy relationship between MMS regulators and the companies they were collecting from remains difficult to calculate.

Since the Obama administration has come into office, it has taken a path with MMS that would not suggest that safety was its primary concerns where offshore drilling was concerned.

For instance, the budget for safety remained relatively flat, growing by about $3 million from FY2009 to FY2010, the transition from the Bush to the Obama administration, and then seeing an the budget rise about $119,000 more for this coming year.

At the same time, MMS established some new principles for safety inspection concerned more with risk assessment than covering every facility. The most recent budget request from the Department of Interior states outright that “MMS focuses compliance efforts on those operators whose performance does not meet certain targets.” What this means is that they are focused on the facilities with the greatest risk. And to that end, MMS explained in its budget request that while it completed around 27,000 inspections in FY2009 (the last year of the Bush administration), it anticipated completing fewer inspections in both ‘10 and ‘11 – 22,000 and 23,000 respectively. And for that reason, it’s possible that TransOcean’s Deepwater Horizon may not have been on its radar screen.

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because they didn't suspect that BP would lie, and try to paint a rosy picture of the accident?
unacceptable

Gulf of Mexico: from magnificent resource to industrial sacrifice zone


A satellite view of the Gulf. In the red areas, a vast, nitrogen-fed algae bloom has risen, blotting out most sea life underneath.
Photo: NASA

The Gulf of Mexico is a magnificent resource: a kind of natural engine for the production of wild, highly nutritious foodstuff. Here's how the EPA describes it:

Gulf fisheries are some of the most productive in the world. In 2008 according to the National Marine Fisheries Service, the commercial fish and shellfish harvest from the five U.S. Gulf states was estimated to be 1.3 billion pounds valued at $661 million. The Gulf also contains four of the top seven fishing ports in the nation by weight. The Gulf of Mexico has eight of the top twenty fishing ports in the nation by dollar value.
According to the EPA, the Gulf is the home of 59 percent of U.S. oyster production. Nearly three-quarters of wild shrimp harvested in the United States call it home. It is a major breeding ground for some of the globe's most prized and endangered fish, including bluefin tuna, snapper, and grouper.
It would be a wise policy to protect the Gulf, to nurture the health of its ecosytems, to leave it at least as productive as we found it for the next generations. As climate change proceeds apace and population grows, sources of cheap, low-input, top-quality food will be increasingly precious.

So, how are we doing? As I write this, oil is gushing into the Gulf at the rate of 5,000 barrels per day, 5,000 feet below the water's surface, The New York Times reports. Above the surface, an oil slick with a circumference of 600 miles is lurching along, lashed by wind toward the coasts.
By Friday, it will have reached Louisiana's wildlife-rich coast. And according to MarketWatch, "Beaches in Alabama and Mississippi are also threatened, and, if the spill spreads into the Gulf's 'Loop Current,' it could devastate coastlines as far away as southeastern Florida."

For fisheries, the situation is atrocious. Direct contact with high oil concentrations kill fish quickly. But low-concentration contact can have horrible impacts, too. According to Greenpeace:
Even when the oil does not kill, it can have more subtle and long-lasting negative effects. For example, it can damage fish eggs, larva and young -- wiping out generations. It also can bio-accumulate up through the food chain as predators (including humans) eat numbers of fish (or other wildlife) that have sub-lethal amounts of oil stored in their bodies.
Tragically, now seems to be a particularly awful time for a massive spill. On the Oceana blog, Matt Niemerski writes:

Scientists say this is a critical time for bird life in the region because it is peak nesting and migration time for hundreds of species. Endangered sea turtles are beginning to lay their eggs along beaches in the area and bluefin tuna are spawning right now. Whales, dolphins and sea turtles are also at risk because they could inhale oil when they come to the surface to breathe.
What started with a human tragedy and suspected tragic loss of 11 lives on April 21, now appears to be unfolding into one of the worst environmental disasters in U.S. history.

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....oil drilling is not the only human activity that imperils this vital ecosystem. Every year, millions of tons of synthetic nitrogen and mined phosphorous leach from Midwestern farm fields and into streams that drain into the Mississippi. The great river deposits those agrichemicals right into the Gulf, where they feed a 7,000-square-mile algae bloom that sucks up oxygen and snuffs out sea life underneath.
The bulk of this vast Dead Zone's rogue nutrients comes from the growing of corn, our nation's largest farm crop. Half of the corn crop ends up in feedlots, feeding cows, chicken, and pigs stuffed together in pollution-spewing, factory-style feedlots.

The federal government has mounted an effort to stem the flow of fertilizer from farms to the Gulf. But policies that encourage maximum production of corn -- including mandates and tax breaks for corn ethanol -- overwhelm those gestures. Thus the Dead Zone has become a routine fact of life in the Gulf, the cost of doing business for a food system that prizes cheapness and industry profit above all else. As the writer Richard Manning puts it in the winter 2004 American Scholar (unavailable online):
Already, the Dead Zone has seriously damaged what was once a productive fishery, meaning that a high-quality source of low-cost protein is being sacrificed so that a source of low-quality, high-input subsidized protein can blanket the Upper Midwest.
The government-generated boom in corn-based ethanol plays its role, too. Five years ago, just 13 percent of the corn crop went into ethanol factories. Today, a third does; by 2015, if government mandates hold, fully one-half will. Already, increased demand from ethanol is taking its toll on the Gulf.

Back in 2008, after ethanol production had soared, the Louisiana Universities Marine Consortium reported, "The nitrogen loading to the Gulf of Mexico in May of this year was 37 percent higher than 2007 and the highest since measurements began in 1970." The group added: "The intensive farming of more land, including crops used for biofuels, has definitely contributed to this high nitrogen loading rate."
Thus like the oil spill, the Dead Zone owes some of its existence to our reliance on auto transportation.
At this time of year, fertilizer runoff is streaming into the Gulf, and the algae bloom is just beginning to do its dirty work. Now, adding to the routine depredations of the agricultural runoff, we have what's looking likely to emerge as the nation's largest oil spill ever.
Rather than protect the Gulf, we seem determined to destroy it in pursuit of cheap car fuel and cheap meat. Is it too late to reverse course?

http://www.grist.org/article/2010-04-29-gulf-of-mexico-oil-spill-fishery-to-industrial-sacrifice-zone/

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