Re: [hreg] Re:Power of oil and gas
- If you are interested, I would like to forward you some e-mail inquiries about my efforts to find out if the Global Electric Motorcar (GEM) vehicles qualify for federal and state tax incentives. I finally got a clear cut answer from the TNRCC. I am now convinced that the U.S. and Texas government are not truly interested in moving away from the burning of oil and gas to power our vehicles as well as produce electricity. If we used Compressed Natural Gas (CNG) we would reduce the criteria emissions such as particulate emissions (PEMs), carbon monoxide (CO), and maybe some of the other criteria emissions. However, according to a magazine article in National Geographic from February of 1981, natural gas production peaked in 1973 and oil production peaked in 1970. We are a net importer of both natural gas and oil. We were not a net importer of natural gas in 1980 according to the National Geographic in 1981. The Middle East is suppose to be swimming with oil right? Well the current edition of National Geographic shows a more updated estimate of potential oil reserves in the world. Only those Persian Gulf nations surrounding Bahrain (Iraq, Iran, Kuwait, Saudi Arabia, the United Arab Emirates, and Qatar) have significant oil reserves. Is our energy policy based upon the goal of exhausting all of the oil in the Persian Gulf? If consumption levels of oil remained constant for a long time world wide, we would probably not run out of oil this decade. However, what are the chances that consumption will remain constant? Have you read that experts are predicting a substantial increase in heating oil and natural gas prices this winter? Lately crude oil prices are hovering around $30 a barrel.
Thanks for this post. It is just one more example of corporate welfare running wild. The following is especially wonderful:
"There would be drilling without it, said the big players, but royalty
relief encourages a broader range of activity, more companies and competition."
No doubt. Maybe the government could pay half the cost of drilling the wells too - or even all the costs - bet that would be even more encouraging. Much as grazing, timber, and mining rights to millions of acres of federal (publicly owned) lands are essentially given away all over the country by the Minerals Management folks and the Dept. of the Interior.
What is this but another subsidy (one of many) to the oil and gas industry? That same article states that the Minerals Management Service calculates that there are about 10 trillion cubic feet of these deposits, so assuming that only 1/10th of that amount (one trillion cubic feet) is drilled and produced, the royalty at 1/6 with a gas price of $3 per MCF (thousand cubic feet) would be worth about 1,000,000,000 MCF x 1/6 x $3 = $500,000,000 which is a pretty nice subsidy to the oil industry (and the $3 price for gas if probably going to go way up soon).
I'll bet every one of these oil men would claim to believe in free enterprise and free markets and hate all forms of government regulation, but what is this but a handout? This gas is not economically drillable at present royalty rates and prices so they want to change the rules to make it economic (why don't we do that for renewables?). The 1/6 royalty is not some unreasonable new bureaucratic regulation - it has been settled practice in the offshore industry for many years.
Why not subsidize other forms of energy rather than continue to pour money into the fossil fuels sector? No wonder VP Cheney won't even tell us who participated in the meetings where our country's energy policy was formulated, let alone what was said and what kind of deals were cut. According to the article, the Minerals Management Service can suspend the royalty on its own, apparently without approval from the congress, which was no doubt part of the secret discussions. Same old story - democracy dies behind closed doors. If only the renewable industry could get that kind of subsidies. We need to keep on plugging, but most of the money and political clout are on the other side. Good luck to everyone.
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