Senate Has Oil Production In It's Sights

On Friday, we all woke up to the happy news that gas prices might go down a teensy little bit after Memorial Day. Even though that “teensy bit” might just mean “down to $3.50, that news was welcome in a slow economic climate that an administration pre-occupied with it’s own image seems unwilling to acknowledge. But Americans should make no mistake: the tiny decline in gas prices has little to do with the administration’s energy policies, and this week, they’re going to demonstrate that to the nation as they put “Big Oil” on the chopping block in a new round of finance committee hearings chaired by that perennial failure at basic economics, Chairman Max Baucus.

From Politico:

Senate Democrats are looking to bring to the floor next week a plan to strike billions of dollars in annual tax incentives for the five biggest oil companies.

“That’s what we’re thinking,” a Senate Democratic leadership aide told POLITICO Thursday evening, adding there won’t likely be a vote on the measure next week.

Finance Committee Chairman Max Baucus (D-Mont.) will also hold a hearing next Thursday on gas prices and oil tax incentives for the biggest oil companies — including ExxonMobil, BP, Chevron, Shell and ConocoPhillips.

One major question for the Senate leaders: how any money saved from reducing the tax incentives would ultimately be used. Many Democrats are pushing for the money to go toward deficit reduction, the leadership aide said.

Now this all might sound well and good, using money that we pour into domestic industry to pay down the deficit…but that’s merely a sound bite being used by Democrats to sway a public they think will respond to lip service and key words, and won’t dig deeper into their nefarious plans. The truth is, oil companies, like other companies, rely on tax breaks to be competitive in the world market and to spur on a thriving American industry in times of economic recession, like now.

Instead of cutting spending where spending cuts are desperately needed – say, in the realm of earmarks, or in the billions in entitlement spending we dole out each year to useless, bloated government programs – the Dems are simply using the prevailing sentiment against government spending to launch an attack at an American industry already beaten bloody by administration policies against domestic drilling in the Gulf of Mexico, the administration’s rabid environmentalists, and years of toiling uphill against Dem’s radical daydreams of windmill farms and solar panels, which cloud the realistic possibility of American energy independence. It wouldn’t be beyond speculation to guess that Baucus sees a perfect opening to launch an attack against the very worst thing Dems can imagine: a money-making American industry.

Instead, Baucus would direct the “saved” tax dollars to programs designed to promote “alternative energy sources” and programs that would help to wean America off oil. That’s right: they’re pulling tax breaks for oil companies, imposing a greater burden on them, calling it a “savings” for the taxpayer, and then taking the nonexistent savings and sending it directly into the coffers of yet another bloated, useless government program. It doesn’t sound particularly like a plan most taxpayers would get behind, but yet, Baucus and the rest of the finance committee will be discussing it in closed door meetings this week.

Not to mention, Barack Obama recently embarked on a tour of South American, promising that Americans would gladly purchase oil drilled in the Gulf of Mexico…so long as it was drilled by Brazilian companies. Baucus’s proposed rules would actually impose an additional tax on oil companies looking to drill off our Gulf shores, disguised as an “excise fee.” This fee would apply to any company looking to increase domestic oil production by drilling off Gulf shores into the stockpile of oil at the base of the Gulf of Mexico. In a twisted way, however, Baucus might be delivering a spate of good news to companies looking to restart drilling in the Gulf. The administration has been incredibly stingy when it comes to issuing permits for anyone to drill there – so stingy that House Republicans had to pass a bill jump-starting the permit process just this week. The Obama Administration’s de facto moratorium on drilling has, by some accounts, forced Americans even further into reliance on foreign oil. Nearly 100,000 barrels of oil per day are imported just to make up for the decline in domestic oil production.

It’s no wonder that Americans have seen their own spending on gasoline skyrocket over the past year. And the administration and it’s friends in Congress seem determined to make certain that Americans never pay less for a gallon of gas. Just as prices are falling, they’re looking to introduce an entirely new scheme of taxes and punishments that could drive prices through the roof, limit any hope of domestic oil production that would save Americans from being forced to beg for mercy at the hands of Arab oil producers or reduce our dependence on foreign oil production. Instead, Dems are preying off the American attitude against spending to punish perhaps one of the only thriving industries left.