| As the Democrats took control of the House and | | | | The second issue has to do with the oil drilling in |
| Senate in Congress, they promised a flurry of | | | | the Gulf of Mexico. When an oil company wishes |
| legislation in the first 100 hours of office. One of | | | | to drill on land owned by the federal government, |
| the efforts was to go after big oil. | | | | it is supposed to pay royalties on the oil produced. |
| Energy costs that last few years have certain | | | | The underwater terrain in the Gulf of Mexico |
| come front and center for most of us. Gas prices | | | | qualifies as such. Alas, somebody in the |
| are way up, a fact that puts a crimp in the | | | | government failed to include the proper royalty |
| disposable income of a lot of people. To make | | | | language in the leases signed by various oil |
| matters more aggravating, the big oil companies | | | | companies for the Gulf. |
| have been reporting record profits. This one-two | | | | The way the leases are written, the oil companies |
| punch certain created a political climate where | | | | must pay royalties on the price of crude oil at the |
| such companies were ripe for attack and the new | | | | time the agreements were entered. There is no |
| Democrat majority is following through on | | | | language about the royalty being reconfigured as |
| promises to cut some of the government breaks | | | | the price of oil goes up. This is standard language |
| given to big oil by the Republican majority of the | | | | for any government lease of this sort. The total |
| last Congress. | | | | lost tax revenue? About 10 BILLION dollars. Oops! |
| The first issue on the plate is the 6.5 billion dollars | | | | To remedy the lease problem, Congress is |
| in tax breaks given oil companies. The money | | | | threatening to change the underlying law |
| comes from a tax deduction given to big oil for oil | | | | governing them. In truth, most oil companies are |
| production and refinement from 2004 through | | | | already coming on board with the idea of changing |
| 2014. The ironic thing? The oil companies never | | | | the agreements. Five have done so already and |
| asked for the tax breaks. In fact, the Chairman | | | | the remaining 45 are expected to do so soon. |
| of ExxonMobil even testified before Congress in | | | | The new tax revenues will be put into an account |
| this regard. For some reason, the breaks were | | | | used to fund research into renewable energy |
| passed anyway. Welcome to the concept of | | | | sources. While this is a noble goal, one can predict |
| government waste. The Democrats are certainly | | | | a good chunk of the money will be wasted |
| no strangers to blowing money in odd and unique | | | | because we are talking about the government |
| ways, but they seem determined to reduce this | | | | after all. |
| mistake by their predecessors. | | | | |