So Senate Democrats want to impose a “windfall profits” tax on oil companies for making too much money. That’s like punishing a heart surgeon because insurance companies are willing pay big bucks for coronary bypasses. Doesn’t Congress know U.S. companies control only 10 percent of the world’s oil supply? When worldwide supply and demand is the problem, increasing the supply at home is the only solution.
OPEC could increase the oil supply but they are not inclined to do so when we’re not willing to do anything about our own situation. Besides, some OPEC members enjoy seeing the U.S. squirm in our present credit and economic predicament. Then, too, commodity markets bear some responsibility for price increases. However, the major problem is worldwide demand, mostly in the U.S., China and India.
Alternative energy sources like nuclear power plants, Anwar, the Canadian tar sands, our own vast oil shale and coal deposits, biofuel, ethanol, and wind and solar technology will play a role in future energy needs. However, these resources will not be readily available in the near future; because high oil prices likely are here to stay, action at home is needed to turn things around.
We must open access to lands presently off limits to development. Alaska, both coasts and federal lands in the west have conventional oil and natural gas resources that could be developed to make a significant contribution to our energy needs. We are not moving fast enough in these areas and this is the fault of Congress where California, Florida and upper East Coast “greenies” exercise far too much influence.
Pundits have suggested that capped wells are being held in reserve. Capped wells don't exist; if they did oil would have begun flowing when prices hit $120 a barrel. Some low-producing wells that went off-line for economic reasons could be brought back on profitably with $120-$130 oil. Technology such as horizontal drilling is being developed to help increase the percentage of original oil reservoirs, but that’s not new oil. What’s needed to turn this country around is a unified effort to locate new oil reserves. Unfortunately, Congress just doesn’t get it.
Jere Joiner
Divide, Colo.
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2 comments:
I heard a program recently on Glen Beck radio, where he had the president of Jet Blue on the program. I forgot his name, but the guest had a serious plan for liquification of coal for use as airline jet fuel, and it could be further refined to make gasoline for cars, heating oil for homes, and other products for which we currently use petroleum. According to data supplied by the guest, there are sufficient coal reserves in the continental US to supply all our needs for hundreds of years, plenty enough time to develop alternate technology.
He proposed his program to Congress. As far as I know, there has been no support from Congress.
Go figure.
Excellent post.
Oil industry profits, which many label as "obscene" are rarely, if ever, empirically analyzed.
Below is a quote on the subject from the February 1, 2008 edition of US News & World Report; further below is the link:
"On the margin. The oil industry urges people to look beyond its profits to its profit margin: ABOUT 7.6 PERCENT OF REVENUES LATE LAST YEAR [emphasis added]. That's not much higher than the 5.8 percent profit margin for all U.S. manufacturing, and if you exclude the financially troubled auto industry from that analysis, the oil industry actually appears less profitable than most manufacturers, which were earning 9.2 cents on every dollar of sales."
Copy/paste:
http://www.usnews.com/articles/business/economy/2008/02/01/exxons-profits-measuring-a-record-windfall.html
All the best,
Phil Mella
www.clearcommentary.com
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