Obama Administration: US Has Overinvested In Oil, Gas
Obama Administration: US Has Overinvested In Oil, Gas
by Siobhan Hughes
WASHINGTON (Dow Jones Newswires), Sept. 11, 2009
The Obama administration opened a new front in its effort to impose $31.5 billion in taxes on oil and gas companies, saying that the nation puts too much emphasis on oil and gas at the expense of other industries.
The chief economist in the Obama administration's Treasury Department testified before a Senate panel that current subsidies "lead to overinvestment" in the oil and gas industry. That went beyond previous statements about the need to protect taxpayers and was the clearest signal yet that the federal government hopes to end its role in nurturing domestic oil and gas production.
"To the extent that current subsidies for the oil and gas industry encourage the overproduction of oil and natural gas, they divert resources from other, potentially more efficient investments, and they are inconsistent with the Obama administration's goals to reduce greenhouse-gas emissions and build a new, clean energy economy," Alan Krueger, the Treasury's chief economist, told the panel.
"That's absurd," said Devon Energy Corp. (DVN) Chief Executive Larry Nichols, the chairman of the American Petroleum Institute, before the panel. "At a time when respected energy studies agree on the need to increase all sources of domestic energy, it makes absolutely no sense to discourage production of our leading sources, oil and natural gas."
For years, Republicans encouraged oil as part of an "all of the above" strategy intended to reduce reliance on imports, especially from unstable parts of the world. But the Obama administration is trying to shift the debate amid a focus on global warming. Oil is viewed by the Obama administration as part of the problem because transportation accounts for more than a quarter of U.S. greenhouse gas emissions.
The new rhetoric isn't sitting well with Congress. Sen. Orrin Hatch, R-Utah, warned that the U.S. would be "at a tremendous disadvantage" if the country turned its back on oil, gas and coal. Jeff Bingaman, D-N.M., a moderate voice in the Democratic party, cited "concerns" about some of the proposals, urging sensitivity to regional interests. Sen. Jim Bunning, R-Ky., used stronger language.
"We are 62% imported from not very friendly countries right now on oil," Bunning said. Krueger replied: "That's correct. The best way for us to reduce" -- but Bunning cut him off. "Is to become less independent -- is that what you're saying?" Bunning said.
The Obama administration also may run into inconsistencies as it shapes its own energy program. By taking away tax incentives for gas production, the U.S. would be discouraging a cleaner-burning fossil fuel that is seen by some environmentalists as central to transitioning away from coal.
"This counterproductive approach is also at odds with the administration's own carbon reduction policy because it would discourage the production of natural gas, our cleanest fossil fuel," said Nichols.
http://www.rigzone.com/news/article.asp?a_id=80239&hmpn=1
by Siobhan Hughes
WASHINGTON (Dow Jones Newswires), Sept. 11, 2009
The Obama administration opened a new front in its effort to impose $31.5 billion in taxes on oil and gas companies, saying that the nation puts too much emphasis on oil and gas at the expense of other industries.
The chief economist in the Obama administration's Treasury Department testified before a Senate panel that current subsidies "lead to overinvestment" in the oil and gas industry. That went beyond previous statements about the need to protect taxpayers and was the clearest signal yet that the federal government hopes to end its role in nurturing domestic oil and gas production.
"To the extent that current subsidies for the oil and gas industry encourage the overproduction of oil and natural gas, they divert resources from other, potentially more efficient investments, and they are inconsistent with the Obama administration's goals to reduce greenhouse-gas emissions and build a new, clean energy economy," Alan Krueger, the Treasury's chief economist, told the panel.
"That's absurd," said Devon Energy Corp. (DVN) Chief Executive Larry Nichols, the chairman of the American Petroleum Institute, before the panel. "At a time when respected energy studies agree on the need to increase all sources of domestic energy, it makes absolutely no sense to discourage production of our leading sources, oil and natural gas."
For years, Republicans encouraged oil as part of an "all of the above" strategy intended to reduce reliance on imports, especially from unstable parts of the world. But the Obama administration is trying to shift the debate amid a focus on global warming. Oil is viewed by the Obama administration as part of the problem because transportation accounts for more than a quarter of U.S. greenhouse gas emissions.
The new rhetoric isn't sitting well with Congress. Sen. Orrin Hatch, R-Utah, warned that the U.S. would be "at a tremendous disadvantage" if the country turned its back on oil, gas and coal. Jeff Bingaman, D-N.M., a moderate voice in the Democratic party, cited "concerns" about some of the proposals, urging sensitivity to regional interests. Sen. Jim Bunning, R-Ky., used stronger language.
"We are 62% imported from not very friendly countries right now on oil," Bunning said. Krueger replied: "That's correct. The best way for us to reduce" -- but Bunning cut him off. "Is to become less independent -- is that what you're saying?" Bunning said.
The Obama administration also may run into inconsistencies as it shapes its own energy program. By taking away tax incentives for gas production, the U.S. would be discouraging a cleaner-burning fossil fuel that is seen by some environmentalists as central to transitioning away from coal.
"This counterproductive approach is also at odds with the administration's own carbon reduction policy because it would discourage the production of natural gas, our cleanest fossil fuel," said Nichols.
http://www.rigzone.com/news/article.asp?a_id=80239&hmpn=1
Views: 77
Replies to This Discussion
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Permalink Reply by essay on -
hahaha absurd doesn't even begin to describe some of the subversive things this administration is doing.
the green movement is nothing more than a front for a socialist agenda and the thin veneer is really starting to flake off.
global warming is a scam. folks can get mad at me all they want, but i'm not the one who's a sucker.
hate the game, not the player, homies.
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Permalink Reply by North LA on
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I hear we're going to get our energy from rainbow generators and fairy dust burners:(
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Permalink Reply by essay on
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i'm working on the fairy dust burner, but i seem to have run out of pot. acorn said they'd help me score some more though.
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Permalink Reply by Grillin' - MmmMmm on -
Obama sympathizers and apologists: can't wait to hear you take on this! Just when I thought this administration couldn't get any goofier, they go and do it again! Fail Baby Fail!
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Permalink Reply by Les Bamburg on
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Unfortunately this is what happens when politicians get their advice from environmentialists and academia. Governments shy away from consulting with the oil & gas industry because they are considered "evil" and the public would view as collusion with the enemy.
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Permalink Reply by sesport on
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Here, Les, have some of Mmmarkkk's barbeque, comfort food. Now, to be honest, the article does say that some environmenatlists do see it as central to transitioning away from coal. And there are the friendly ( or friendlier) government folks, especially if those gov. folks come from one of the resource states. And where is that ng lobby???? I just knew W. VA was up to something! lol
:0)
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Permalink Reply by John D Cook on
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This is crazy. Picken's I hope will address this ASAP!. I guess he wants to see umemployment skyrocket in the Gulf South. Bet 75% of the people in Washington have not ever saw a drilling rig, except for the Bruce Willis movie Armageddon, or an oil refinery. Just give money to the Middle East is what this will do. Energy companies use profits for exploration. Just take Texas, Louisiana, Mississippi, Alabama, Arkansas, and Oklahoma and start our own country. We will be the wealthiest nation will low unemployment and prosper and grow, just keep the liberals out. For as I am concerned, Obama and his administration can move their butts to the Middle East. With this tax, they are just punnishing American companies for success. I guess that the American Dream is dead. The more success the more tax. The Lord givith and the GOVERNMENT TAKE!
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Permalink Reply by Mac Davis on
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You people just don't understand.
Don't you realize that if we all "think green" and spend lots of government money on green energy, we'll all have high paying jobs and clean air? If we stop using US coal, oil, and gas, we'll all be rich, the rest of the world will give up cheap oil and coal and kiss our feet?
Haven't you seen the TV commercials with the grizzled old farmer talking about why are we so stupid that we don't all convert everything over to green energy? Don't you realize that grizzled old farmers have the best understanding about complicated economic and ecological issues? After all farmers don't waste irrigation water, pollute the environment with toxic chemicals, feed massive quantities of antibiotics to cattle, or devastate the environment with large areas of monoculture crops, do they?
Come on people, turn off your air conditioners, convert your SUV's to greenhouses to raise sustainable crops, take off your shoes, hold hands and sing kumbaya.
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Permalink Reply by Jack Blake on
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Obama is a frickin idiot Hitler wanna be.....................
Obama and ACORN are two peas in a pod..........................
Jack Blake has spoken..........................
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