Are the Inmates Running the Asylum?

It’s really difficult to understand the sheer stupidity of our elected officials. Their complete lack of understanding the oil industry is my rant today. This time it’s not just the democrats, some of the republicans are as equally inept.

They have banned offshore drilling except along part of the Gulf Coast and on most of the onshore areas controlled by the government. Instead of opening up these areas to exploration our illustrious lawmakers say that it won’t bring immediate relieve and would take 5 years or more so why bother. I believe this is the same response they gave 10 years ago. Now I don’t work for NASA but seems like some of those areas could be producing oil by now if they had listened then.

Another popular response is to claim it will destroy the beaches and therefore their tourism industry. Well duh, if the tourists can’t afford to get there it’s likely the tourism business is going to be nonexistent. Besides you don’t have to pollute the air and water to drill for oil and gas as can be seen in Norway They utilize CO2 for increased oil production, oil spill detection systems, cleaning of formation water from oil production and the recovery of crude oil vapors to maintain pristine waters and a clean shoreline.

Last but not least is their complaint that there are 68 million areas of undeveloped leases that should be drilled before opening up additional leases. Perhaps this is where their ignorance shines the brightest. If all you had to do was get a lease then setup a drilling rig to pump out the oil you might find them more difficult to come by. Maybe that’s why it’s called exploration. It only starts at the lease sale and last year the US government received $3.7 billion dollars from ONE sale. Do they not have any idea how much time and money it then takes to conduct exploration surveys, obtain permits, obtain a drilling rig, then setup production and transportation systems if they’re lucky enough to be successful?

Oh yeah, and their only solution to the problem is to tax the productive oil companies because of their “obscene wind fall profits”. ExxonMobil, the nation’s largest oil company, profited 10 cents for every dollar it brought in revenue in 2007. That puts its profit margin in the middle of other Fortune 500 companies, including Bank of America (18-percent profit margin) (NYSE: BAC), AT&T (11.8 percent) (NYSE: T) and Proctor & Gamble (13.1 percent). Exactly how is making your product less profitable going to be an incentive for the oil companies to continue with the expense of exploration dollars? Of course this scheme won’t lower your gasoline cost but will only redistribute wealth to those too lazy to work for a living. The only ones making an obscene profit here is the US government. (see chart below) In 2006 their share of 27 oil companies profit was $90 billion plus an addition $10.9 billion in non-income tax AND another $48 billion in excise taxes. The last time we had a wind fall profits tax was when Jimmy (the peanut) Carter was in power and we all know how well that worked out.



And now these idiots want to take over all domestic oil refineries? Well considering how efficient the government run bureaucracies can be, I can hardly wait.

I'm Just Saying, you think gasoline prices are high now?