NationStates Jolt Archive

Because the federal government has all this extra money to throw at the struggling oil industry (http://www.nytimes.com/2006/02/14/business/14oil.html?_r=1&ei=5094&en=7f705e667bdcf305&hp=&ex=1139893200&oref=slogin&partner=homepage&pagewanted=all):
New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government.

Based on the administration figures, the government will give up more than $7 billion in payments between now and 2011. The companies are expected to get the largess, known as royalty relief, even though the administration assumes that oil prices will remain above $50 a barrel throughout that period.

Administration officials say that the benefits are dictated by laws and regulations that date back to 1996, when energy prices were relatively low and Congress wanted to encourage more exploration and drilling in the high-cost, high-risk deep waters of the Gulf of Mexico.
You have to travel nearly to the bottom of the article to get to the fact that those incentives have a trigger price on them--about $35 a barrel--above which price the oil companies are supposed to pay royalties. When was the last time you saw oil lower than $35 a barrel. Remember, this is oil and gas that will be pumped off of public land--taxpayer owned land--and the oil companies will get it for nothing. What do you suppose the chances are that the oil companies pumping this oil will give us those royalties in the form of lower energy prices?

Just insert one of my standard rants about nuclear power. I can't be bothered to type it. ;)

Seriously though, its all part of the bigger energy problem, those people have us over a barrel - 'scuse the pun. It's something people on the left and right are going to have to come together on, and do an end run around washington.

*Insert Rant about the evils of the fact that the Government is controlled by the oil companies.* Hate this country, Hate those rich Corporate fatcats that drive by in their limos, THEY are part of the reason we're in this Iraq war to begin with.

dont just dismiss this as a punk kid trying to legalize a drug.
So gasohol and methonol are proven to be a better fuel source then fossil fuels. To make methanol, we use corn, the active ingredient being cellulose, well according to the US department of agriculture there is four times more cellulose in hemp then corn.
that combined with solar energy and hydroelectric should be enough to no longer need to die for oil in iraq

dont just dismiss this as a punk kid trying to legalize a drug.
So gasohol and methonol are proven to be a better fuel source then fossil fuels. To make methanol, we use corn, the active ingredient being cellulose, well according to the US department of agriculture there is four times more cellulose in hemp then corn.
that combined with solar energy and hydroelectric should be enough to no longer need to die for oil in iraq

Except that you'll have people, like myself, who refuse to trash their old, reliable vehicle to purchase a new vehicle.

Obviously that $35 per barrel number needs to change again.
It's never going to fall back there now, so change to reflect reality.

Obviously that $35 per barrel number needs to change again.
It's never going to fall back there now, so change to reflect reality.
I could see moving it up to around $40 or $45 a barrel, but the fact is that the oil companies are making record profits right now, and they ought to have every incentive in the world to drill wherever they can and they ought to pay the US taxpayers royalties for the oil and gas they take out of public lands.

I could see moving it up to around $40 or $45 a barrel, but the fact is that the oil companies are making record profits right now, and they ought to have every incentive in the world to drill wherever they can and they ought to pay the US taxpayers royalties for the oil and gas they take out of public lands.

I disagree about the royalties. It just gives an incentive to produce more abroad. I would, instead, charge a duty on all barrels of oil, reagardless of oil. Probably in the $20-25 mark.