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The problem with demonizing oil companies

June 20, 2011 by B. Daniel Blatt

While prices at the pump have tapered off a bit in the past few weeks, they still remain a drain on the pocketbooks of most Americans.  In order to deflect criticism from the Democratic administration, the president’s fellow partisans have demonized oil companies, with Senate Democrats seeking to “deny five major oil companies the domestic production tax credit that is available to all manufacturers and mining companies, including oil companies” because as Michael Barone puts it, “big oil companies get lousy ratings in polls. So stick ‘em with a higher tax bill.”

Problem is, as the sage pundit adds:

. . . energy companies including but not limited to the big oil companies have been developing new economically viable sources of natural gas and oil production, while government subsidies to renewable sources like solar and wind energy aren’t producing significant increases in energy supply. So the policy on this bill is to take away money from the productive and give it to the unproductive.

Read the whole thing.  It does seem some legislative Democrats have a visceral opposition to the productive sector of our economy.

When you demonize the oil companies, you demonize those entrepreneurs best suited to develop new sources of energy and more efficient means of production.  By contrast, if government would reduce the amount of regulations it imposes on oil companies while lowering the tax burden on these energy developers, their costs go down and their ability to innovate goes up, making them better able to reduce the price at the pump.

Filed Under: Democratic demagoguery, Economy, Energy Independence

Comments

  1. V the K says

    June 20, 2011 at 7:59 am - June 20, 2011

    Not just oil companies; this administration demonizes all business except their cronies in “green energy.” Here, Union Thug Lawyer defends the NLRB lawsuit against Boeing by claiming Southerners are too dumb and lazy to build airplanes. Claims Boeing’s quality will decline as a result of locating in South Carolina. Gee, somebody tell BMW. They build in South Carolina and progressive tools love their cars.

    Ain’t that like a leftist? Always dividing Americans and judging people by stereotypes.

  2. Ben says

    June 20, 2011 at 9:04 am - June 20, 2011

    It’s a tricky one. I see your point – but when oil companies sleep with Big Government (especially Democrats) their victim status becomes more dubious.

    Many suits were too quick to jump on the “global warming” bandwagon, for example.

  3. The_Livewire says

    June 20, 2011 at 9:39 am - June 20, 2011

    maybe he just doesn’t understand ‘Northern Privilege’? 😉

    I’ve heard that the employees of Boeing in SC have filed suit against the union saying the union suit is punishing them for disbanding the union. This statement would seem to lend credence to that.

  4. Heliotrope says

    June 20, 2011 at 10:59 am - June 20, 2011

    Energy from fossil fuel is the world standard. Brilliant minds in India, China, the US, Italy, Japan, Sweden and Paraguay would love to break the energy conundrum. The great hope lurking just outside of practical reach is deuterium fusion.

    Since the most practical nuclear fusion reaction for power generation seems to be the deuterium-tritium reaction, the sources of these fuels are important. The deuterium part of the fuel does not pose a great problem because about 1 part in 5000 of the hydrogen in seawater is deuterium. This amounts to over 10 to the 15th power tons of deuterium. Viewed as a potential fuel for a fusion reactor, a gallon of seawater could produce as much energy as 300 gallons of gasoline. The tritium part of the fuel is more problematic – there is no sizable natural source since tritium is radioactive with a halflife of about 10 years. It would have to be obtained by breeding the tritium from lithium.

    I throw this into the conversation, not because I know what I any talking about, but because it is simple-minded to the point of stupidity to think that intense research around the world is not taking place to solve the energy crisis.

    China is building coal powered electricity plants at an astounding rate. The result is that the smog can be cut with a knife. They do not seem to care about what they burn or installing scrubbers to clean the effluent. They are starved for electricity and trying to keep up with demand.

    The idea that water power and wind power and tidal power and solar power and geothermal power will dent the energy needs to the point of retiring fossil fuel power is as laughable as pretending that unlimited, affordable, universal health care is just a presidential signature away. Dreamers are a dime a dozen. Dreaming never scooped a single shovel of horse manure, because reality is a hard task master.

    I have no quibble with energy conservation, better storage, greater efficiency, protecting the environment, alternative sources, etc. But let’s be honest about fossil fuels. We should avoid the oil messes that occur in Africa and Brazil and Venezuela. But to tie our own arms behind our backs as the Chinese colonize fuel sources around the world is just nuts.

    We can extract energy from the ground and sea floor better than the cash rich, energy starved countries are going to undertake.

  5. Sonicfrog says

    June 20, 2011 at 11:01 am - June 20, 2011

    I have to disagree. Those subsidies must die, as most should. We, the consumer, should see and feel the real cost of these things.

  6. V the K says

    June 20, 2011 at 11:11 am - June 20, 2011

    Heliotrope, I have also read some interesting research into Thorium reactors, which could produce fission energy without the level of radioactive waste produced by Uranium reactors. But, and here is the point, energy should be cheap and abundant, the Obama Administration, under the sway of environmental fundamentalists like Lisa Jackson and Stephen Chu, are hellbent on pushing energy the opposite way.

    Meanwhile, Companies continue to flee California in droves, partly because of the Environmentalist Taliban that runs the state.

  7. Sebastian Shaw says

    June 20, 2011 at 11:23 am - June 20, 2011

    Demonizing oil companies for unprofitable money pits of wind & solar will backfire on Obama big time given the deeper context of inflation & high unemployment; furthermore, the Obama EPA’s continued draconian power grab on coal & other efficient energy producing companies will just add more pain since they will send this to we consumers of energy. Obama is playing with fire & he will not only get burned, but he will get turned to political ashes.

    His emotionally detached pledge for “green energy” jobs as a campaign issue is equally mindbogglingly stupid.

  8. Sonicfrog says

    June 20, 2011 at 11:49 am - June 20, 2011

    Everyone…

    Repeat after me…

    There is no “Green Jobs” sector.

    Period.

    It’s a false construct made up by politicians to make themselves feel good. Now back to our regular broadcast.

  9. The_Livewire says

    June 20, 2011 at 11:56 am - June 20, 2011

    I’m a fan of Pebble reactors myself.

  10. B. Daniel Blatt says

    June 20, 2011 at 12:00 pm - June 20, 2011

    Sonic, would you say then that the “subsidies” (if subsidies they are) should die for all companies receiving them?

  11. JP says

    June 20, 2011 at 12:32 pm - June 20, 2011

    too bad the oil companies do not get “Subsidies” they get a certain tax rate they share with many companies, and certain companies get even better rates.
    “Green” companies do get subsidies, and even greater tax rates (and rightly they are called tax cuts). These companies Receive our tax dollars to do their work. The oil companies do not.

  12. TGC says

    June 20, 2011 at 3:00 pm - June 20, 2011

    I was reading a Facebook discussion about wind turbines and, like group-think, there were multiple comments about how we should have more because they’re so “beautiful”. I suppose they might be if you’re easily mesmerized by repetitive motion or even bug zappers.

    The discussion changed course after I inquired about the thousands of birds mauled every year by these “beautiful” wind turbines. And how can they be “green” when you consider the toxins used in manufacturing and maintaining them?

  13. Sonicfrog says

    June 20, 2011 at 8:43 pm - June 20, 2011

    Sonic, would you say then that the “subsidies” (if subsidies they are) should die for all companies receiving them?

    Unless there is a very VERY compelling reason why they should otherwise exist…. yes.

    I can tell by the question that you’re going to offer one that I will find it hard to refuse. And yes… I DO support subsidies for guitar and bass manufacturers!!!! 🙂

    Just kidding of course… Or am I????

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