Received this e-mail from my Congressman, Charlie Wilson (D-Bridgeport, OH) yesterday:
Dear Friends,
Since 2001, the price of a gallon of regular gasoline in Ohio has risen more than 130-percent. This is seriously squeezing working families, forcing small businesses to make painful decisions and hurting our economy. Bringing gas prices down will involve a series of steps, including the development of U.S. oil and gas resources on federal lands.
The first step is to focus on the millions of acres already leased for oil production that aren’t being used. Today, an estimated 68 million acres of onshore and offshore land leased by oil companies remain undeveloped. I believe those 68 million acres should be drilled as soon as possible.
According to the Energy Information Administration (EIA), if big oil drilled the nearly 68 million acres of federal land currently leased to oil companies, the U.S. could produce an additional 4.8 million barrels of oil per day. That would nearly double total U.S. oil production and would be six times the estimated peak production from ANWR.
Today, there are more than 91 million acres open to leasing in the Arctic region of Alaska, including onshore and offshore land. Of the available land, oil and gas companies have only leased 11.8 million acres. In addition, 80-percent of the oil available on the Outer Continental Shelf is already open for leasing—but the oil companies haven’t committed the money to drill there. While I support the development of oil and gas resources on federal lands, I cannot support opening additional arctic land or more land on the OCS, until oil and gas companies begin to use the land already open to them.
I believe the government has worked hard to make the land available; now oil companies need to do their part. That’s why I have cosponsored HR 6251, the Responsible Federal Oil and Gas Lease Act. This important legislation would force oil and gas companies to either drill on or forfeit federal onshore and offshore leases. In short, I believe they should use it or lose it. Under this legislation, companies would be banned from obtaining any more leases unless they can demonstrate that they are producing oil and gas, or are diligently developing the leases they already hold. Similar and effective rules already apply to coal companies.
I know that out-of-control gasoline prices are a top concern of the residents of Ohio’s Sixth Congressional District. I promise I will continue to support legislation that will ease the burden that you and so many others are feeling because of gas prices.
Charlie Wilson
Member of Congress
Ohio’s Sixth District
Sincerely,
Not your typical Democratic way of thinking there, but one can certainly make the argument that one way to tilt supply-and-demand in favor of the consumer would be increased production. And there is certainly the line of thinking that Big Oil has intentionally kept production lean to inflate prices, and therefor their bottom lines. This would be a good way to combat the, ahem, rigging of prices.
June 22, 2008 at 6:13 pm |
Take a look at this:
http://tinyurl.com/3hjbfb
“The average net profit margin for the S&P Energy sector, according to figures from Thomson Baseline, is 9.7%. The average for the S&P 500 is 8.5%. So yes, energy companies are more profitable than many others…but not by an inordinate amount.
Google, for example, reported a net profit margin of 25% in its most recent quarter. Should we have an online advertising windfall profit tax?”
June 22, 2008 at 7:34 pm |
Well, Charlie Wilson, at least in that e-letter I received and posted, does not mention a windfall profits tax. For the record, while I think the idea of one sounds great on a gut level I doubt it would work in reality, to say nothing of it being unfair to Big Oil. Setting fairness aside, its not like Big Oil would avoid the windfall profits tax by lowering prices and therefore profits. They would find much more creative ways to simply hide the profit. But even if they did just pay the tax, punishing them for profit and not, say, Google, would be grossly unfair and counter-productive. As I have said before, its a complex issue.