Offshore Drilling? When? 7 years? Never?

Don’t Hold Your Breath for More Offshore Drilling

[...] …There may be deal making and an element of diversion as well. First of all the deal making. As you heard, the President wants a climate control bill, cap and trade of some form, this year, so he throws out more nuclear power, yes, you can have more nuclear power and now some more offshore drilling. That will be the nature of a deal. A climate bill in return for more drilling and more nukes. That’s the deal element here. The diversion is this: as early as tomorrow, our people in D.C. are telling us that maybe we will see new co2 emissions rules from the EPA. That would be tough on business. So what you do is you announce an extra off shore drilling today, divert from the negative headlines tomorrow, capture the public’s headlines with extra drilling today. So you’ve got a bit of a diversion here, and you’ve also got some deal making going on. What you do have, you do have a switch here, you’ve got the possibility of a lot more offshore drilling, but it’s way down the road.

The interior department is going to hold several years, that’s a direct quote, several years of environmental studies on those eastern seaboard, outer continental shelf drilling, then they come in with a report after several years, then the environmentalists will challenge it in court and hold it up for more years to come. I’m not going to put a year estimate on it, but I mean, it is way down the road, towards the end of this decade, before, if you ever see a single drop of offshore oil come ashore. [...]

I'm not surprised. Diversion indeed.
     

What is a "Windfall" profit, and how big should it be? And who should it belong to?

And how do the profits of "greedy" Oil companies compare to the profits of other businesses? This piece from the Wall Street Journal looks at those very questions:

What Is a 'Windfall' Profit?

[...] Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any "windfall" tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we're missing some Obama-Durbin business subtlety.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon's profits don't seem so large. Exxon's profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

If that's what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery -- both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau's industry rankings. The latter two double the returns of Big Oil, though of course government has already became a tacit shareholder in Big Tobacco through the various legal settlements that guarantee a revenue stream for years to come.

In a tax bill on oil earlier this summer, no fewer than 51 Senators voted to impose a 25% windfall tax on a U.S.-based oil company whose profits grew by more than 10% in a single year and wasn't investing enough in "renewable" energy. This suggests that a windfall is defined by profits growing too fast. No one knows where that 10% came from, besides political convenience. But if 10% is the new standard, the tech industry is going to have to rethink its growth arc. So will LG, the electronics company, which saw its profits grow by 505% in 2007. Abbott Laboratories hit 110%.

If Senator Obama is as exercised about "outrageous" profits as he says he is, he might also have to turn on a few liberal darlings. [...]

It goes on to give some examples of institutions that are regarded highly by liberals, that have greater profit margins than big oil. Why not seize their profits?

Because this is about politics, not economics. What Obama and the Democrats are proposing is the Venezuela solution. We don't need that kind of thuggery in our government.

How about a bi-partisian American Solution instead?

Who is benefiting from Oil company profits? Neal Boortz spells it out:

OBAMA HEADING BLUE COLLAR THIS WEEK

[...] Just who owns the profits these oil companies have earned? That would be the stockholders. And just who might these stockholders be? Well, about 1.5 percent of them are oil company executives. The rest are the rank and file Americans who own mutual funds and workers who will rely on pension plans for their retirements. Pension plans and mutual funds, you may not know, are major investors in oil company stocks. This means that the retirement incomes of school teachers, firemen, police officers, municipal workers, flight attendants, warehousemen, truck drivers, hotel employees and other service sector workers and others may rely in part on the financial health of the oil companies in which their pension funds hold stock. Obama the Magnificent wants these pension funds to cough up some of their earnings so that he can hand out checks to voters. Too bad the government-educated masses can't see through this, and too bad the media won't point it out to them.

Bold emphasis mine. It's more Democrat wealth redistribution. Are you folks living on pensions ready to have YOUR money confiscated?
     

The Democrat CONTROL Agenda

Not Even At $10 A Gallon?

Senate Republican Leader Mitch McConnell asks that the Senate consider a bill to allow offshore drilling, but Democrats, led by Sen. Ken Salazar (D-CO) object.

Sen. McConnell then asks if the bill could be triggered when gas reaches $4.50 per gallon, then $5 per gallon, then $7.50 per gallon, and finally $10 per gallon. All objected to.

So how high does the gas price have to be for Democrats to agree to more oil drilling?

Hat tip to TammyBruce.com for video. Her comments on it were right on the mark:

McConnell exposing the Dems as they object to drilling even if gas gets to $10 a gallon. You see, it's not that they have some bigger, better, superior idea about how the make the world better. They simply want and need Americans to be victims. That, in fact, is the only way the left gains power, is when a population is already suffering and feels vulnerable and hopeless. Keep that in mind as you watch this.

That is the very thing that has put me off the Democrat Party long ago. They derive their power from making people feel like victims, and treating their voters like victims. The dominant Left in the party have and investment in keeping the populace aggrieved, angry and unhappy; the Democrat Left never work to solve problems, and their proposed solutions often create more problems, which require even more Democrat government interference and control.

The Republicans have unfortunately mismanaged many things while they had a majority. People are rightly fed up. The Democrats have been able to capitalize on that dissatisfaction, but instead of using the opportunity to offer real solutions, they are using it to consolidate control over the American populace. Many of them have no problem with having us living with high gas prices, because the crisis gives them the means to implement more restrictions, to assume more power over US.

We need to vote for people who are actually interested in dealing with and solving problems, not creating them.

Rock the House: What should Republicans do now? It’s on…Culberson: Every day on the House floor this week
     

We're too close to a Democrat Majority

Much of the news focus is on who will win the White House. But the Congress and the Senate are also at risk of gaining larger Democrat majorities:

Presidential vote could help Dems get 'magic' Senate majority

[...] The battle for the Senate has been overshadowed by the presidential race, but just as important as who will reside in the White House is whether Democrats can get 60 seats in the Senate.

The "Magic 60" would give Democrats a filibuster-proof majority, and the keys to true power in the Senate. Assuming that their party leaders could keep Democratic senators in line, 60 votes would mean a fast track for their agenda, prevent Republicans from blocking it and a clear path for their nominations for the federal bench.

Not since the 95th Congress of 1977-79, when Democrats had 61 seats, has either party had a veto-proof majority.

Democrats now hold a 50-49 advantage in the Senate, and one seat is held by an independent.

The worst nightmare for Republicans on Election Day is the Democrats' best-case scenario: control of the White House, a nine-seat net gain in the Senate, and a healthy gain on their 36-seat majority in the House. In that case, Democrats could steamroll President Obama's agenda into law.

Even before Stevens' indictment, the landscape looked rough for Republicans.

Stu Rothenberg, a veteran election analyst and author of the Rothenberg Political Report, told CNN: "Two years ago was a horrible election for Republicans in a horrible environment. The environment is now worse for Republicans than it was two years ago, and that means the election results could be as bad, or even worse."

Indeed, all signs point to Democrats picking up seats. The question is: How many?

Of 35 Senate seats up for re-election this year, 23 are now held by Republicans. [...]

(Bold emphasis mine) The last time the Dems had such a large majority was during Jimmy Carter's term in office. Do we need a repeat of the Carter years? Read the whole thing for the details of what seats are vulnerable, and how it could all play out. If the Democrats reach their magic number, they will be able to proceed unopposed.

It's interesting to me that some people want to "punish" the Republicans by not voting for them. Years out of power seems to have done little to transform the Democrats. Their recent gains were thanks largely to the conservative Blue Dog Democrats, yet the party leadership and strategies have not changed at all, despite the Democrat controlled Congress having an historically low approval rating by the public. If the "punishment" didn't work to change Democrats, why would it work for Republicans? And unfortunately, if you punish Republicans by not voting for them, you are automatically rewarding Democrats.

That's the way it goes. The people who are actually running are the choices we have, not some imagined, unreal fantasy of a future candidate who's perfect.

It would be nice if our choices were better than just the lesser of two evils. Sometimes they are, but usually it's the former. Don't tell me "The lesser of two evils is still evil". What part of LESS don't you understand? Since when is MORE evil a BETTER thing? Duh.

Republicans had a solid majority, and they blew it. I don't think it's good for either party to have an absolute majority. They need active opposition to keep them on their toes. Absolute power seems to corrupt the status quo. We need to maintain some sort of balance in our government, which includes an effective opposition. I hope the American electorate keeps that in mind when they vote this November. We will need an effective opposition to prevent the current Democrat majority from squelching all debate about things that affect us all, such as drilling for domestic oil, and it's effects on gas prices:

House Dems turn out the lights but GOP keeps talking

Speaker Nancy Pelosi (D-Calif.) and the Democrats adjourned the House, turned off the lights and killed the microphones, but Republicans are still on the floor talking gas prices.

Minority Leader John A. Boehner (R-Ohio) and other GOP leaders opposed the motion to adjourn the House, arguing that Pelosi's refusal to schedule a vote allowing offshore drilling is hurting the American economy. They have refused to leave the floor after the adjournment motion passed at 11:23 a.m., and they are busy bashing Pelosi and her fellow Democrats for leaving town for the August recess.

At one point, the lights went off in the House and the microphones were turned off in the chamber, meaning Republicans were talking in the dark. But as Rep. John Shadegg (R-Ariz..) was speaking, the lights went back on and the microphones were turned on shortly afterward.

But C-SPAN, which has no control over the cameras in the chamber, has stopped broadcasting the House floor, meaning no one was witnessing this except the assembled Republicans, their aides, and one Democrat, Rep. Dennis J. Kucinich (D-Ohio), who has now left.

Only about a half-dozen Republicans were on the floor when this began, but the crowd has grown to about 20, according to Patrick O'Connor.

"This is the people's House," said Rep. Thaddeus McCotter (R-Mich.). "This is not Pelosi's politiburo."

Democratic aides were furious at the GOP stunt, and reporters were kicked out of the Speaker's Lobby, the space next to the House floor where they normally interview lawmakers.

"You're not covering this, are you?" complained one senior Democratic aide. Another called the Republicans "morons" for staying on the floor. [...]

(Bold emphasis mine) If it's like this NOW, can you imagine what it will be like with a Democrat majority controlling the White House, Congress and the Senate? Should either side have that much power?
     

McCain, offshore drilling, China and Cuba

So the latest thing that has people on the far left and far right screaming is that McCain wants to lift ban on offshore drilling. The Right says he needs to drill ANWAR too, the Left says it proves he's not serious about the environment or global warming.

To me, it proves he's very much a genuine centrist. A centrist is willing to compromise, which always infuriates the extremists who are unwilling to bend.

I've been maintaining that many of the environmentalists are really just leftists wanting to use environmental causes to fight capitalism. Here is a good example. They don't want to let us drill off our coastlines, but they say nothing about Cuba hiring China to drill for oil just outside of where our drilling rights end. From last Friday's Nealz Nuze:

SO ... IS CHINA REALLY DRILLING OFF CUBA?

Yesterday Florida Senator Mel Martinez said that China drilling off the coast of Cuba was merely an urban legend. So because we here at the Neal Boortz Show are so incredibly fair and balanced ... we have tried to get to the bottom of this mystery. Here's what we found.

All the way back in 2004, China's Petrochemical Corporation known as Sinopec signed a memorandum of understanding with Cuba's national oil company, known as Cupet to explore four oil blocks in Cuba. Keep in mind that both of these companies are owned by their communist governments. China's Sinopec conducted six months of geological studies of the four Cuban blocks. This was the first attempt by Sinopec, China's second largest oil and gas company, to enter oil and gas exploration and production in Cuba.

Then in 2005, China's Sinopec signed an agreement with the Cuban government to jointly produce oil in Cuba off the coast of Pinar del R�o. Ok so let's get this straight. The governments of China and Cuba enter into a production sharing agreement ... what exactly does that mean? This is when the Cuban government awards the execution of exploration and production activities to an international oil company like Sinopec. The contractor bears the mineral and financial risk of the initiative and, when successful, recovers capital expenditure and costs incurred in the year (cost oil) by means of a share of production.

So now, for your reading pleasure (and Mel Martinez's) is a timeline of China's oil exploration efforts in Cuba. This is from the World Security Institute ...

2005

January 31: Cuba and China signed a contract in Havana providing for the Asian giant's participation in extracting oil from a deposit off the island's north shore, the press reported. The deal is between Cubapetroleos and the Chinese oil company Sinopec, said the official daily newspapaer Granma. In December, Fidel Castro announced discovery of oil at a site offshore from Santa Cruz del Norte, some 55 kilometers (33 miles) east of Havana. The deposit is believed to hold some 100 million barrels of "light" crude, or the equivalent of 14 million tons. (EFE, Prensa Latina, 31/1/05)
February 8: China's oil giants began cultivating their virgin soil in Cuba. China Petroleum & Chemical Corporation (Sinopec), as the first comer, has inked a contract with Cuba Oil Company (Cubapetroleo) to jointly exploit oil in the Caribbean country. Under the terms of their contract, the two sides will join forces to prospect and exploit a potential oil-producing region. Chinese experts believe it is a significant beginning of the cooperation between China and Cuba in the petroleum industry. (SinoCast, 8/2/05)
March 22: Chinese oil drilling equipment has begun arriving in Cuba as state-run Cubapetroleo (Cupet) and its foreign partners prepare to significantly increase drilling along the northwest coast, industry sources said. "Four service units and a small rig have arrived and we are waiting for more," said a Cuban oil service manager, asking his name not be used. There are currently five rigs operating along the northwest heavy oil belt, an 80-mile (128-km) stretch of coast in Havana and Matanzas provinces from whence come all of Cuba's 70,000 to 80,000 barrels per day of heavy crude at 8 API to 18 API and with a high sulfur content. The poor-quality oil is burned in modified power plants and factories. (Reuters, 22/3/05)

April 6: The operator of China's second-largest Shengli oilfield is stepping up overseas exploration, spending more on such ventures this year as the world's No. 2 oil user grapples with falling reserves, officials said. Shengli Oilfield Administration Bureau, a unit of state-run Sinopec Group, will spend about $40 million drilling for oil and gas in Cuba, Iran and central Asia in 2005, company officials said. "This will be the heaviest spending in a year and we expect the pace to continue in the next few years," a Shengli executive told the press. Shengli, which is among the first Chinese companies to venture abroad, will sink a total of eight wildcat and appraisal wells this year, four in Kazakhstan, two in Iran, and one each in Cuba and Kyrgyzstan. (Reuters, 6/4/05)

November 24: PetroChina Great Wall Drilling Co., Ltd. and Petroleum Company of Cuba held a ceremony for signing two drilling service contracts on November 3, 2005. It is the second-time cooperation between Great Wall Drilling Co., Ltd. and Petroleum Company of Cuba after the signing of a one-year petroleum service agreement on one 1500HP drilling rig and one 2000HP rig on April 8 this year. The contract signed this time includes three 2000HP drilling rigs. The contract has a period of one year and a value of over US$24 million. The project will be launched in January 2006. (China Chemical Reporter, 24/11/05)

December 22: Sinopec of China signed an agreement earlier this year to jointly produce heavy oil with Cupet in westernmost Pinar del R�o province, with drilling expected to begin in 2006. (The Oil Daily, 27/12/05)

Still not convinced Senator Martinez? Here are some more reports from 2005 from the Energy Intelligence Group and National Post's Financial Post & FP Investing in Canada.

... China is seeking oil everywhere and Cuba is no exception. Three large Chinese companies, SINOPEC, Petro China and CINOOC - China National Offshore Corporation, are involved in a large agreement, perhaps already underway, for coastal and deep-water explorations. Most significant to this topic, especially in light of other Chinese investment in Cuba, is the fact that Sinopec, China's second largest oil company, has stated a goal of helping boost Cuba's domestic oil production and producing 60% of its oil needs by 2006 ... Additional plans for exploration and development of other blocs of potential reserves were announced by two other Chinese oil companies, China National Petroleum Corp. and China National Offshore Oil Corp., after talks with CUPET, Cuba Petroleum. Some exploration will be in coastal regions but much, based on the better quality of the oil, will take place in off-shore deep waters.

Let's cut to the chase ... and pardon me if I scream here:

The point isn't that China is not presently drilling for oil within 90 miles of the U.S. The point is that they CAN! --- and, thanks to the Democrat congress --- we CAN'T.

Democrats would like us to wrangle over what IS happening. The issue is what CAN happen. They can drill. We can't. They're planning to. We aren't. Even government educated Democrat myrmidons can understand that.

So Cuba, with China's help (and the help of the Leftists in the USA), can drain the oil reserves WE don't ALLOW ourselves to drill, by drilling on the edge where our water rights end. The Commies win, we loose. Because we LET them.