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Obama Dropped Offshore Tax on Big Oil:
Mon May-03-10 12:32 AM
Obama’s Drill To Nowhere
"....Here’s why Obama’s political move to open up our coasts to more drilling is wrong.
1. Opening up offshore areas to drilling hurts efforts at a climate deal – not helps. On March 23, ten coastal state Senators wrote a letter to the ad hoc Senate climate crew of Kerry-Lieberman-Graham warning that they “cannot support legislation that will . . . put our coasts at greater peril”. They note the environmental concerns that offshore drilling presents, but also highlight the unfair proposal of allowing coastal states to keep a sizable portion of the royalties rather than share that revenue with all states and taxpayers. The letter was signed by Democratic Sens. Bill Nelson (Fla.), Robert Menendez (NJ), Sheldon Whitehouse (RI), Barbara Mikulski (Md), Ben Cardin (Md), Frank Lautenberg (NJ), Ted Kaufman (Del), Ron Wyden (Ore), Jeff Merkley (Ore) and Jack Reed (RI).
snip
......Opening up “access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030“. The Energy Information Administration estimates that if the ban on drilling remains in place, that “the average U.S. price of motor gasoline price is 3 cents per gallon higher” than if we open these areas to drilling. That’s because the US isn’t Saudi Arabia: we sit on only 1.6% of the world’s oil reserves, while the Saudis have 20%. Dumping our little pond of oil into the giant sea of global reserves can’t make a significant dent on our imports or impact prices
......taxpayers on existing drilling leases is unfair. Now, we’ve written extensively about this over the years. Because of a bureaucratic oversight by the Department of Interior during the implementation of the Deep Water Royalty Relief Act of 1995, oil companies that secured leases in 1998 and 1999 were exempted from royalties, regardless of the prevailing market price of oil. Recent lawsuits have exposed more leases going back to 1996 to this same loophole. This stands in stark contrast to other, similar leases, which require the payment of royalties if the price of oil exceeds a certain threshold. The day the bill was signed in November 1995, West Texas Intermediate oil was trading at $18.28/barrel. With oil now trading at roughly $80/barrel, these companies have been and will be extracting very valuable energy from public land without paying any royalties to American taxpayers. The GAO estimates the loss to the US Treasury of more than $50 billion over the life of these royalty-free leases – a huge subsidy for Big Oil. And investigations have found serious problems in the management of the entire royalty program.
As recently as August 25, 2009 - when President Obama submitted his Mid-Session Review budget to Congress – he recognized this fleecing of the taxpayer by Big Oil and proposed a “Levy tax on certain offshore oil and gas production” as a back-door way to capture some revenue from these no-royalty leases, raising $6 billion over a decade.........But in Obama’s budget submitted in February, the Administration has now dropped this offshore tax on Big Oil (you can see the itemization of repealed oil & gas tax breaks on page 30 of 88 at the above link, with the new levy tax now gone)......Obama puts a lot at risk with this offshore drilling plan and gets little reward. What a disappointment.
http://publiccitizenenergy.org/2010/04/01/obamas-drill -... /
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Spill, Baby, Spill
By Michael Isikoff, Ian Yarett and Matthew Philips | NEWSWEEK
From the magazine issue dated May 10, 2010
BP has been trying hard to burnish its public image in recent years after being hit with a pair of environmental disasters, including a fatal refinery explosion in Texas and a pipeline leak in Alaska. One major step was to announce, in 2007, that it had hired a high-powered advisory board that included former EPA director Christine Todd Whitman, former Senate majority leader Tom Daschle, and Leon Panetta, who were each paid $120,000 a year. (Panetta left when he became President Obama's CIA director.) Two years ago the oil giant's chief executive, Robert Malone, flew board members out to the Gulf of Mexico on a helicopter to demonstrate the safeguards surrounding BP's advanced drilling technology. "We got a sense they were really committed to ensuring they got it right," Whitman told NEWSWEEK.
Now BP, formerly known as British Petroleum, finds itself blamed for what could prove to be the worst oil spill in U.S. history. And only weeks after Obama announced an ambitious plan to open up more U.S. offshore waters to oil drilling, shunting aside environmental concerns from his own Democratic Party, his administration is facing a comeuppance from hell. "There was a lot of wishful thinking, I guess," says Villy Kourafalou, a scientist at the University of Miami's Rosensteil School of Marine and Atmospheric Science. "The new technologies were said to be so wonderful that we'd never have an oil spill again." Rep. Frank Pallone (D-N.J.), who had sought to block the expanded drilling, says the oil and gas industry was pushing this idea hard. "They said, 'We'll never have a repeat of Santa Barbara,'?" referring to the 1969 rig explosion off the California coast. Both the Bush and Obama administrations "were buying the line that the technology was fine," Pallone adds.
BP pressed hard to make that point in D.C. Its PR efforts included payments of $16 million last year to a battery of Washington lobbyists, among them the firm of Tony Podesta, the brother of former Obama transition chief John Podesta. Last fall, after the U.S. Interior Department proposed tighter federal regulation of oil companies' environmental programs, David Rainey, BP's vice president for Gulf of Mexico exploration, told Congress that the proposal was unnecessary. "I think we need to remember," he said, that offshore drilling "has been going on for the last 50 years, and it has been going on in a way that is both safe and protective of the environment."
Read the full article at:
http://www.newsweek.com/id/237298 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
BP Is Criticized Over Oil Spill, but U.S. Missed Chances to Act
snip
......The federal government also had opportunities to move more quickly, but did not do so while it waited for a resolution to the spreading spill from BP, which was leasing the drilling rig that exploded in flames on April 20 and sank two days later. Eleven workers are missing and presumed dead.
The Department of Homeland Security waited until Thursday to declare that the incident was “a spill of national significance,” and then set up a second command center in Mobile. The actions came only after the estimate of the size of the spill was increased fivefold to 5,000 barrels a day.
The delay meant that the Homeland Security Department waited until late this week to formally request a more robust response from the Department of Defense, with Ms. Napolitano acknowledging even as late as Thursday afternoon that she did not know if the Defense Department even had equipment that might be helpful.
By Friday afternoon, she said, the Defense Department had agreed to send two large military transport planes to spray chemicals that can disperse the oil while it is still in the Gulf.
Officials initially seemed to underestimate the threat of a leak, just as BP did last year when it told the government such an event was highly unlikely. Rear Adm. Mary E. Landry, the chief Coast Guard official in charge of the response, said on April 22, after the rig sank, that the oil that was on the surface appeared to be merely residual oil from the fire, though she said it was unclear what was going on underwater. The day after, officials said that it appeared the well’s blowout preventer had kicked in and that there did not seem to be any oil leaking from the well, though they cautioned it was not a guarantee.
BP officials, even after the oil leak was confirmed by using remote-controlled robots, expressed confidence that the leak was slow enough, and steps taken out in the Gulf of Mexico aggressive enough, that the oil would never reach the coast.
(The NOAA document on a potentially far larger leak, first obtained by The Press-Register in Mobile, Ala., was described by an agency spokesman as simply a possibility raised by a staff member, not an official prediction.)
Some oil industry critics questioned whether the federal government is too reliant on oil companies to manage the response to major spills, leaving the government unable to evaluate if the response is robust enough.
“Here you have the company that is responsible for the accident leading the response to the crisis,” said Tyson Slocum, director of Public Citizen’s Energy Program. “There is a problem here, and the consequence is clear.”
snip
http://www.nytimes.com/2010/05/01/us/01gulf.html?ref=sc ...
"But in Obama’s budget submitted in February, the Administration has now dropped this offshore tax on Big Oil (you can see the itemization of repealed oil & gas tax breaks on page 30 of 88 at the above link, with the new levy tax now gone)......Obama puts a lot at risk with this offshore drilling plan and gets little reward."
But perhaps hmmm campaign money?????????
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Obama: “Oil Rigs Today Generally Don’t Cause Spills”
Obama Repeats Katrina Oil Spill Myth To Defend Offshore Drilling
http://www.youtube.com/watch?v=Tm8gLmuTvJ4&feature=play ...
By: David Dayen Thursday April 29, 2010 1:42 pm
snip:
What a difference 18 days makes. Here was Barack Obama, on April 2, before the BP oil rig disaster in the Gulf of Mexico, claiming that oil rigs are safe to justify his position on offshore drilling:
I don’t agree with the notion that we shouldn’t do anything. It turns out, by the way, that oil rigs today generally don’t cause spills. They are technologically very advanced. Even during Katrina, the spills didn’t come from the oil rigs, they came from the refineries onshore.
Not only does this quote look ridiculous in hindsight, it wasn’t true at the time, as Brad Johnson points out:
Obama’s claim that oil rigs did not cause any spills during Hurricane Katrina is simply false, as the Wonk Room reported in June, 2008, when Sen. John McCain (R-AZ) and other conservatives made the same false claim:
Hurricanes Katrina and Rita Caused 124 Offshore Spills For A Total Of 743,700 Gallons. 554,400 gallons were crude oil and condensate from platforms, rigs and pipelines, and 189,000 gallons were refined products from platforms and rigs.
Hurricanes Katrina and Rita Caused Six Offshore Spills Of 42,000 Gallons Or Greater. The largest of these was 152,250 gallons, well over the 100,000 gallon threshhold considered a “major spill.”
http://news.firedoglake.com/2010/04/29/obama-oil-rigs-t ... ’t-cause-spills/
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YouTube - Barack Obama on Offshore Oil Drilling ( to Florida voters while asking for their votes)
http://www.youtube.com/watch?v=v8fkbEuCQss&NR=1 
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