THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume XIV, Issue # 76, April 14, 2012
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
"GREENBACKS" ENERGY BOONDOGGLES VERSUS REAL ENERGY:
Government Tax & Subsidy Schemes Waste Billions.
We Need Real Energy & Jobs
By Paul K. Driessen
PROPOSALS FOR NEW & HIGHER TAXES & INCREASED RESTRICTIONS ON U.S. OIL COMPANIES: CONGRESSIONAL ENACTMENT OF SUCH ANTI-OIL
LEGISLATION NOT IN AMERICA'S BEST INTEREST -- CONSEQUENCES OF PASSAGE & ENFORCEMENT OF SUCH LEGISLATION: CURTAILED OIL DRILLING &
PRODUCTION, REDUCED ROYALTY REVENUES, WORKER LAYOFFS, STILL HIGHER GASOLINE & DIESEL FUEL PRICES, & INCREASED COSTS FOR EVERYTHING WE
GROW, MAKE, TRANSPORT, & DO WITH PETROLEUM -- THE ENERGY POLICY AGENDA OF THE ENVIRONMENTALIST MOVEMENT & THE OBAMA ADMINISTRATION
FULL STORY:
Having had it with $4-per-gallon gasoline and the Obama administration’s squandering billions of taxpayer dollars on phony “green” energy schemes, angry voters
have told their Senators: “Enough!”
Their calls provided sufficient spinal implants in enough Senators to defeat three proposals to extend the wind energy “production tax credit” (PTC). The tax credit
gives wind project developers taxpayer greenbacks whenever they generate high-priced electricity, even if there is no market for the power at the time it’s generated.
Worse, the PTC is paid on top of other subsidies, fast-tracking of wind projects through environmental review processes, and exemptions from endangered species,
migratory bird, and other laws.
Confronted by the gale of public outrage, Senate Democrats tried a new tack.
They offered an amendment that would eliminate various tax deductions for five major oil companies, turn the supposed new revenue stream into more subsidies for
wind turbine, solar panel, and electric car makers – and use any leftover crumbs to “pay down” the skyrocketing budget deficit they helped engineer.
The ploy needed 60 votes – but got only 51, despite President Obama’s vocal support. “Members of Congress,” the President said, “can stand with big oil
companies, or with the American people.”
Not exactly. The American people are no longer buying the partisan rhetoric. They increasingly understand that new taxes and restrictions on oil companies are not
in their best interest. In fact, a recent Harris Interactive poll found that over 80% of U.S. voters support increased domestic oil and gas production to create and
preserve jobs, lower pump prices, and increase government revenues.
They realize that only 12% of what they pay for gasoline goes to oil companies for refining, marketing, and distribution. Another 12% is state and federal taxes. Fully
76% is determined by world crude oil prices – and thus by global supply and demand, and confidence or fear about world events.
They know that eliminating tax deductions for expenses incurred in producing and refining oil is the same as imposing new taxes. Those taxes would result in
curtailed drilling and production, reduced royalty revenues, worker layoffs, still higher gasoline prices, and increased costs for everything we grow, make, transport,
and do with petroleum. Blue collar, poor, and minority families would be hurt worst.
Every U.S. business claims deductions for new equipment, facility depreciation, utilities, payroll, research, and other expenses. This ensures that businesses, like
individuals, recover their costs and get taxed only on their net incomes. Five oil companies should not be punished as the sole exception to this rule.
Legitimate expense deductions are very different from subsidies. Subsidies involve government taxing individuals and profitable companies, and transferring their
money to politically favored companies and products that could not survive without perpetual government support.
The system is even more insidious when government subsidized entities return substantial portions of their taxpayer largesse as campaign contributions to
President Obama and other politicians who arrange the wealth transfers. It’s still worse when hard-earned taxpayer money is used to reduce risks for wealthy
investors who buy into boondoggles arranged by government bureaucrats who are much better at choosing losers than winners.
As voters are learning, the Solyndra, Evergreen, Fisker, A123, and dozens of other “green energy future” scandals and insolvencies are only a small part of the
subsidy cesspool.
Subsidies, punitive taxation schemes, and “alternative,” non-hydrocarbon energy are often justified by claims that we face imminent manmade catastrophic global
warming. In reality, virtually no empirical evidence supports hypotheses, assertions, or computer model projections about melting polar icecaps, average global
temperatures, storm frequency and intensity, sea levels, and other natural phenomena.
Wind, solar, and biofuel energy are also justified by claims that we are running out of oil and gas. In fact, America is blessed with vast proven petroleum reserves
and even greater undeveloped prospects that government has made off limits. The natural gas and hydraulic fracturing revolution is merely a hint of the energy,
jobs, and revenues Americans could produce, if certain politicians would end their obstinacy.
“Renewable” energy is further justified by claims that petroleum “keeps us trapped in the past.” In truth, we need to worry about the present, especially our
unemployment, and debt crises. Oil and gas provide 60% of America’s energy. By contrast, despite untold billions in subsidies, wind and solar combined still
provide barely 0.60% – and are unlikely to do much better for decades to come.
The $2-billion Shepherds Flat wind project in Oregon’s Columbia River Gorge area involved $500 million in outright subsidies, plus a subsidized loan guarantee
of $1.1 billion for General Electric, plus production tax credits. At the whim of the winds, its 338 gigantic turbines will generate electricity for California, in wild
swings between zero and their combined rated capacity of 845 MW – chopping up eagles, falcons, herons, bats, and other protected species as they spin.
In 2010, GE generated over $5 billion in U.S. profits – but paid no U.S. income taxes, and no fines for the thousands of protected birds and bats that its Cuisinart
wind turbines slaughtered.
By contrast, White House villain ExxonMobil (one of the companies targeted by the failed tax bill) earned $30.5 billion in profits that year, on revenues of $383
billion, paid $1.6 billion in U.S. income taxes, and made combined lease bonus, rent, royalty, tax, and other federal payments of almost $10 billion. When a few
birds are killed on oil company property, companies pay substantial fines.
President Obama promised that he would “fundamentally transform” America and ensure that electricity prices “will necessarily skyrocket.” His Energy Secretary
has said Americans should pay $8-10 per gallon for gasoline. His Environmental Protection Agency and Interior and Agriculture Departments have systematically
foreclosed access to our nation’s oil, gas, coal, and uranium resources.
Meanwhile, Mr. Chu’s Department of Energy recently awarded $10 million of taxpayer money to Philips Lighting for making an “affordable” light bulb – that costs
$50 per bulb!
And it is working overtime to promote, subsidize, and install thousands of onshore and offshore wind turbines that generate too much ultra expensive electricity
when it’s not needed and too little when it’s most needed, require too much land and too many raw materials, kill too many birds, cost too much money, and
require perpetual subsidies and exemptions from environmental laws that apply to all traditional forms of energy.
This “green” energy “future” is unsustainable.
Oil companies do make a lot of money, because they produce, refine, and sell enormous quantities of fuel and other petroleum products. But they pay billions in
taxes and royalties – and produce real energy.
Wind, solar, algae, and switchgrass companies take billions in Other People’s Money (OPM). They pay virtually no taxes, and provide virtually no usable energy,
except in the minds and press releases of their promoters.
Expecting that higher taxes on oil companies will produce more oil at lower prices is like saying we will get cheaper bread, and more of it, by eliminating tax
deductions for bakeries’ electricity and equipment.
American voters and consumers understand this. It’s time our elected government officials and unelected government bureaucrats did likewise.
LINKS TO RELATED TOPICS:
Political Environmentalism Versus Human Progress & Prosperity:
Policy Issues Relating to Energy, Environment,
& Natural Resources
Political Economy -- Philosophies, Systems, & Public Policies:
Government, the Economy, & Economic Prosperity
Conservative columnist and political commentator and author of Eco-Imperialism: Green Power, Black Death,
Paul K. Driessen is Senior Policy Advisor for the Committee For A Constructive Tomorrow (CFACT), the Congress Of
Racial Equality (CORE), the Center For The Defense Of Free Enterprise (CDFE), and the Atlas Economic Research
Foundation. Driessen has served on the Staffs of the U.S. Senate and the U.S. Department of Interior, as well as on that of
an energy trade association. He has often spoken and written on such topics as environmentalism, global climate change,
global warming alarmism, corporate social responsibility, and public policies relating to energy, the environment, and
economic development.
Driessen earned his Bachelor of Arts degree in Geology and Field Ecology at Lawrence University, Appleton,
Wisconsin, and his Juris Doctor (JD) at the University of Denver College of Law. He received accreditation in Public
Relations from the Public Relations Society of America, New York, N.Y.
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THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Dr. Almon Leroy Way, Jr., Editor
Conservative & Free-Market Analysis of Government, Politics & Public Policy, Covering Political, Legal, Constitutional, Economic,
Cultural, Military, International, Strategic, & Geopolitical Issues
Conservative Government Ensures a Nation's Strength, Progress, & Prosperity