Wednesday, August 6, 2008

Oil companies have lots of leases to drill

By SEN. JOE BIDEN • July 9, 2008

When you first hear the idea "let's allow offshore drilling and it will cut gas prices," it sounds like it makes sense, especially when gas is more than $4 a gallon. But the facts say otherwise.

The only way we can achieve energy and climate security in this country is to reduce our dependence on oil.

Unfortunately, President Bush and Sen. John McCain are trying to sell us on the oil companies' old argument that repealing the 27-year old moratorium on drilling in protected areas offshore will lower gas prices. Americans need to put this tired debate to rest. Our security -- both here at home and abroad -- depends on it.

First, the oil companies in this country now hold 7,000 leases to drill offshore, yet only 20 percent of those leases are producing oil. That is 68 million acres for which they already have the rights to drill. Nearly 80 percent of our offshore oil is already available for leasing -- approximately 54 billion barrels total. They could be drilling in these areas, but they are not.

Assuming oil companies drilled in new areas, it would take at least a decade for new production to begin. Just last week, the U.S. Energy Information Administration concluded new drilling would have no impact on oil prices before 2030.

Prices would still be determined by the world market, which will be adding billions of new consumers from growing economies in China, India and other countries.

OPEC countries control two- thirds of the world's oil reserves. If we add a bit more oil to the market, they can cut their own output to keep prices high.

Moreover, the majority of the world's oil is in unstable regions. Prices surge when officials threaten to attack Iran or raids shut down production in Nigeria.

Here in Delaware, we are paying $10 more a day for gas -- around $3,600 a year -- than we were seven years ago. That is a bite out of a family's budget.

During the same period, permits for new oil drilling leases increased by 361 percent. Put simply, allowing more drilling does not equal cheaper gas.

Instead, we should be talking about a cleaner, more fuel-efficient future. Oil companies have the money to make new investments. In the first quarter of this year, the five largest domestic oil companies made $37 billion in profits. Since 2001, the number is close to $600 billion.

We should take back tax breaks for big oil companies, which total more than $2 billion over 10 years, and invest in green energy technology. We should have a windfall profits tax to fund everything from mass transit to high-speed rail to the next generation of safe, efficient cars. Finally, we should restrict speculation and price-gouging, and stand up to OPEC's monopoly.

We need solutions of the future, not drilling ourselves deeper into dependence on oil.

U.S. Sen. Joe Biden of Delaware, a Democrat, serves on the Foreign Relations and Judiciary Committees.

1 comment:

flagwelder said...

The only energy or oil monopoly in this country is a governmental institutionalized monopoly on our country energy market. The legislative branch has been engaging in anti-competitive energy practices from drilling to building new refineries and much more. They are in clear violation of the

“Sherman Antitrust Act
This Act expresses our national commitment to a free market economy in which competition free from private and governmental restraints leads to the best results for consumers.”

China can do horizontal drilling from Cuban waters and tap into oil fields in the US waters and drain it dry with a fraction of the environmental regulations as American companies have but yet American oil companies can not drill. In all definitions this is an Oil monopoly when governmental restraint is insuring anti-competitive practices.

Clearly the governmental restraint are in violation of a free market economy and is criminal negligence on the part of the liberal politicians and DOJ who are the real cartel that profit in taxes more then 3 to 1 to the oil companies that actually work for their money and then have to pay taxes on top of that. So when Oil profits go up the tax revenue increase is 3 times that of the oil companies. So who do you think is the real cartel???

This criminal incompetence of the democrats and legislative politicians anti free market energy economy in allowing American companies to meet American Oil needs is in need of change and with bush opening up offshore drilling it is time that we conservatives take a page from the left wing play book and for us to us the judicial system in upholding our laws and open up drilling.

Why dose the Senate call for investigations on big oil? Because they are trying to transfer the blame off of them by placing the blame on someone else. By placing the blame on the oil companies and keep people from seeing that government is the true problem they are able to offer false hope in an effort to gain more power and money from taxes while eliminating a free market economy in our country and forcing us to send our money to unfriendly Middle Eastern countries.

Why should we drill?
1) Create more high paying jobs for Americans
2) Become energy independent and stop sending $700 billion to middle eastern countries that support terrorism
3) $700 billion is 6% of the yearly US economy, and investing this in America would do what to our economy? Lower inflation and strengthen the US dollar?
4) Instantly drop the price of oil because oil Speculators like me would invest in commodity producers that provide the product like Exxon, Chevron, BP, Shell, because this is the smart investment. When Oil Speculators transfer investments the Oil future price falls on the stock market.

We must understand the true source and causes of monopolies — governmental barriers to free and open competition. The solution to the monopoly problem, then, lies not in more governmental policies or antitrust laws but in the repeal of all governmental barriers to free and open trade economy.
As far as wind fall profit tax goes
“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.” Thomas Jefferson

“Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one” - Thomas Paine