Thank You Very Little

Once again, the House Democrats are showing how committed they are to destroying America. They have released their “Energy Security Bill” which is summed up nicely in today’s Wall Street Journal.

“House Democrats have finally released the details of their “Energy Security Bill,” which will be voted on this week, and they must be cursing their rotten luck. Just when they want to stick it to Big Oil for alleged price gouging, oil and home heating costs are plunging. Never mind; this was a campaign theme amid $3 gasoline, and a detail like $2 gas isn’t about to stop Democrats now.

This bill is said to promote America’s energy independence, but the biggest winner may be OPEC. This is a lengthy, complicated bill, but the central idea is simple: Raise taxes on domestic oil producers and then spend the money to subsidize ethanol, solar energy, windmills (so long as they’re not on Cape Cod), and so on. But if you increase the cost of domestic oil production by $10 billion, you are ensuring that U.S. imports of OPEC oil will rise and domestic production will fall.”[...]

Now, note that this tax is ONLY on domestic producers. So if oil is at, say, $50/bbl on the world markets, the price for a U.S. barrel would be, say, $53 (or more). Since the market will not stand for price imbalance, the market will buy “world” (OPEC) oil and ignore the domestic production.

Now, Pelosi and her merry band of idiots are doing this for since they ran on the platform of “Big Oil is Evil” and they have to point the finger at someone when the pesky free market sets prices. Too bad they’re pointing the finger at the wrong thing.

[...]“The bill also includes a “Strategic Energy Efficiency and Renewables Reserve” fund for alternative fuels. That sounds a lot like the Carter-era Synthetic Fuels Corporation — one of the more notorious Washington boondoggles of all time, having spent $2.1 billion of tax dollars on alternative fuels before declaring bankruptcy. Today there is no under-investment by the private sector in alternative energy. The research firm New Energy Finance has found that between 2004 and 2006 investment in alternative energy doubled to $63 billion. Venture capital funding of green-energy technologies has quadrupled since 1998.

The Democrats also insist that the big five oil companies have received sweetheart deals from the government that have ripped off taxpayers. So let’s take a closer look. The most controversial issue involves $6 billion in royalty payments that oil companies are said to owe the government for oil pumped from federal waters. The facts suggest otherwise.

These were leases for drilling rights in the Gulf of Mexico signed between oil companies and the Clinton Administration’s Interior Department in 1998-99. At that time the world oil price had fallen to as low as $10 a barrel and the contracts were signed without a requirement of royalty payments if the price of oil rose above $35 a barrel.

Interior’s Inspector General investigated and found that this standard royalty clause was omitted not because of any conspiracy by big oil, but rather because of bureaucratic bungling in the Clinton Administration. The same report found that a year after these contracts were signed Chevron and other oil companies alerted Interior to the absence of royalty fees, and that Interior replied that the contracts should go forward nonetheless.

The companies have since invested billions of dollars in the Gulf on the basis of those lease agreements, and only when the price of oil surged to $70 a barrel did anyone start expressing outrage that Big Oil was “cheating” taxpayers out of royalties. Some oil companies have voluntarily offered to renegotiate these contracts. The Democrats are now demanding that all these firms do so — even though the government signed binding contracts.

The Democratic bill strong-arms oil companies into renegotiating the contracts or pay a $9 per barrel royalty fee from these leases. If the companies refuse, they lose their rights to bid for any future leases on federal property. So at the same time that the U.S. is trying to persuade Venezuela and other nations to honor property rights, Congress does its own Hugo Chávez imitation.“[...]

(Emphasis mine)

So now the Democrats are going to dis-honor signed contracts? Well, of course. After all they’re Democrats. They’re also ignorant. But like I keep pointing out, you voted for ‘em, you got ‘em. This is only the tip of the iceberg. Bush better damn well get out the veto pen if this bill gets through the Senate.