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ENERGY: Let’s develop our own resources

Letter by Don Post, Milton on March 26, 2012 at 1:42 pm with 23 Comments »
March 26, 2012 2:41 pm

Re: “Drilling doesn’t lower gas prices” (TNT, 3-25).

The argument that revolves around whether drilling for more oil will lower gas prices is a distraction from what should be a major goal: the reduction of imported oil.

Since we must, for the foreseeable future, continue to import oil, it would seem to make sense to import from our friendly, Canadian neighbors rather than from the Middle East or other countries, like Venezuela, that view us less favorably. That should be sufficient reason to justify the Keystone pipeline.

Another argument against oil development in the U.S. revolves around the fact that some of our oil is exported rather than used here. Doesn’t it make sense that if you have an excess of oil in one place, you should sell it where you can? Doesn’t that bring money into this country? And isn’t that a good thing?

The price of oil is established primarily by the OPEC cartel. It accomplishes this by controlling output, thus ensuring prices remain high. While U.S. oil companies benefit from higher prices, they have little or no control over them.

It’s frequently said that oil company subsidies should be eliminated. It’s my understanding that they do not receive any subsidies; however, they do receive the same tax breaks as any U.S. manufacturing company. Isn’t that fair?

Let us develop our own energy resources, be it oil, natural gas, coal, nuclear, wind, solar or tidal power. And let those resources be developed as the free market determines, with a minimum of government involvement.

Leave a comment Comments → 23
  1. concernedtacoma7 says:

    In addition, crude from the US and Canada is cheaper. Nevermind our superior enviromental and safety standards, it does not have to get shipped across the world, money given to regimes that hate us, or regions secured or brokered to ensure price/supply stability.

  2. aislander says:

    So…is leaning on the Saudis and the rest of OPEC to extract more oil supposed to reduce the cost? That course seems okay with the admin…

    But, doesn’t doing that just increase the supply, which the admin assures us won’t reduce the price?

    Help me out here: I SO want to believe my President, but he creates so many obstacles to doing so…

  3. Don, the stated purpose by Keystone officials to Canadian government officials in official documents for the pipeline was so that the oil could go to Texas refineries for export outside the USA.

    The shale oil already goes to refineries in the USA in the Midwest. However, they cannot easily be exported from there, so the USA ahs more oil than it can use.

    Keystone testified that it would allow higher profits because of higher prices in the overseas market than it can get in the US Midwest.

    The Keystone pipleline will not increase US oil supplies and will not llower US oil prices.

    What it might do is increase the amount of foreign oil we refine and ship overseas, so there might be some increase in jobs and profits for US refiners on the Gulf Coast to the detriment of refiners in the Midwest, but it wouldn’t do a thing for domestic oil supplies.

  4. alindasue says:

    I could understand the open more drilling spots or projects like the Keystone line, IF they would actually make a difference in our energy independence as a country, but when companies who are doing all that drilling and piping are selling it to other countries rather than selling it here because they make more money on the international market, then we have a problem that more drilling or more miles of pipeline is not going to fix.

  5. concernedtacoma7 says:

    Even if it only meant ONE US job, ONE drop of oil, or ONE dollar not going to ME it is worth it.

    It is PRIVATE investment being blocked for political gain.

  6. I have no problem with increased drilling AND refinement (which doesn’t necessarily follow). I do have a problem with an approach that doesn’t involve any kind of cost/benefit analysis – an “open checkbook” approach that somehow believes that there should be no weight given to potential environmental costs.

    ct7 – as long as PRIVATE investment involves PUBLIC land, there must be PUBLIC debate and PUBLIC consensus.

  7. We already get the majority of our foreign oil from Canada. Middle Eastern oil is a relative drop in the bucket. The last figures I saw showed the entire Middle East supplying about 35% of our foreign oil imports.

    Breaking it down by country? We get more from Norway than Iraq.

    From the questions the general public ask me as I do my job everyday, seems the majority of people run with the assumption that the Middle East provides the majority of our petroleum.

  8. alindasue says:

    It’s interesting how many “private” industries feel the need to do their harvesting of resources on PUBLIC land: oil companies, lumber, etc. They seem to want access to PUBLIC resources without getting PUBLIC approval for how they use it.

    Even if it were privately owned land, which it rarely seems to be, if builders and developers of places like Walmart or some new apartment complex have to file an environmental impact statement for APPROVAL, why shouldn’t those who are in the business of harvesting resources?

  9. So Don, how about you add to your list of things, conservation.
    It’s cheaper, faster and much more effective at reducing our dependence on oil, be it import or domestic.
    Had the failure bush left the CAFE standards in place and not given tax breaks for buying gas guzzlers, we would be in much better shape.

  10. concernedtacoma: one job, one dollar, one drop of oil isn’t worth the cost to people and the environment Keystone would cause.

  11. averageJoseph says:

    I do have a problem with an approach that doesn’t involve any kind of cost/benefit analysis

    So you were opposed to those millions going to Solyndra? What about Obamacare? (we had to pass it to find out what’s in it).

  12. “It is PRIVATE investment ”

    At tax pair expense.

  13. concernedtacoma7 says:

    tax pair? You mean payer? Nope, no expense to the tax payer. Try again.

  14. aislander says:

    alindasue: Do you have ANY idea how much of acreage in the western states is held by the Federal government? There isn’t that much private land from which to extract resources…

  15. averageJoseph says:

    … big government.

  16. alindasue says:

    aislander said, “There isn’t that much private land from which to extract resources…”

    That doesn’t change the fact that they ARE extracting resources from PUBLIC land, and as beerBoy said, “…as long as PRIVATE investment involves PUBLIC land, there must be PUBLIC debate and PUBLIC consensus.”

  17. I sure wish I had enough time in my day-apart from a few comments with my morning coffee-to fix all the worlds problems like you folks do. Let me know how it all turns out in the end.

    Of course the most entertaining parts are those from the brainwashed to hate anything other than Obama, Local Loonie Left. Haa! Remind me of a treadmill with a squeeky belt….Make a lot of noise but never get anywhere! HAAAAAAAAAAAAAAAAAAA!!

  18. but as long as I’m on here…The heck with stupid conservation and any other silly greenieisms. The people of this country are NEVER going to fall for mass public transit, or pathetic little hybrid vehicles, or carpooling, or any of that drivel that has been pushed for forty years…That leaves us one option….Drill the beejeepers out of mother earth, and suck up every drop of oil she can give…what we dont use ourselves, we sell to every other country who is developing a new found greed for oil.

  19. …instead of bickering back and forth about how Obama is a hero, and Bush is a failure, you characters might be smart to invest in Shell Oil!

  20. writnstuff says:

    Don, Don, Don. Sigh. The government isn’t drilling our oil; private companies are. And what is the primary motivator of private companies? Come on Don… think it through… it’s not that hard. P…P… Pr… Pro… you’re almost there… PROFITS. YESSS!!! You did it. US corporations are driven by a profit motive, not what’s good for America. You say OPEC drives oil prices and those poor American companies can’t do anything but sell at those inflated prices. Shoot. They wanted to help Americans but their hands were tied. They just had to sell “excess oil” overseas. What’s “excess oil”? It costs $4 a gallon here. As long as oil is $4+ a gallon here, I don’t think the term “excess oil” applies. Big oil sells to the highest bidder. Don’t kid yourself. Their is no altruism in big oil.

    And don’t get me started on subsidies. I think you might want to do a bit of research on the topic before you write your next letter. In spite of reaping RECORD PROFITS by wringing $4 a gallon out of the pockets of single moms, job hunters, those about to lose their homes, and others that are down and out, big oil receives billions–yes, thats BILLIONS with a B–of tax subsidies each year. Again, that’s IN SPITE OF RECORD PROFITS for the industry.

    Sigh. Don, I don’t think you’re a bad guy, just gullible. The dollar rules corporate America. They don’t have your best interests, my best interests or anybody’s interests in mind except their own. Don’t be so trusting.

  21. concernedtacoma7 says:

    Writ, oil companies pay enormous taxes at all stages of process, from drilling to the pump. The ‘subsidies’ they get are accounting deductions available to all companies.

    Fight through the rhetoric, even if comes from your party.

    Who makes the biggest profit off of oil? Uncle Sam.

    Buy some XOM if you want a smaller piece of the action. The pipelines are also great, but complicate your taxes.

  22. concerned, you say that oil companies get the same “accounting deductions available to all companies.” Not so.

    There are huge deductions for expenses and huge deductions straight off the bottom “taxes-due” line that oil and coal companies get that no other type of companies get.

    Oil and gas companies also get to amortize their investment costs much more quickly so the initial rush of income from a new well is not taxed so heavily. Other companies don’t get that benefit and must spread out their deductions over a longer period of time.

    They also do not pay a lot of export taxes when they do export to countries where we have no “free-trade” agreements or other types of trade agreements that other companies have to pay.

  23. aislander says:

    Er…alindasue…extraction industries have to file EISs.

    What I was getting at is that, even though drilling is up on private land (under permits issued mostly during the Bush era), we need to extract from public land because there is so much more of it…

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