17 April 2008

Congress Behind Latest Increases in Gas and Oil

Chris Mehl of the Wilderness Society was ecstatic, Kohlman Co., an Oil & Gas development firm, agreed to cede it's oil and gas leases on 33,411 acres along the "Front" to Trout Unlimited, a conservation group. So far the group has racked up 40,074 Acres from companies giving up their leases on the land. 4 companies have agreed to give up their leases on the land since Congress passed a law giving tax credits to companies who give up their leases on 400,000 acres of Federal lands along the Front.

The bill, passed by congress in 2006, expanded the 1997 decision to remove 365,000 acres of Federal land from Oil & Gas leases along the Front. The Front is the area where the Northern Rockies and the Great Plains meet from Montana Hwy. 200 to Glacier National Park in the North.

Chris Hunt, of Trout Unlimited, said the Badger ­Two Medicine area is home to the state fish, as well as grizzly bears that move back and forth between the plains and moun­tains.

This is a treasured place for hunters and anglers,” Hunt said.

"Bob", A commenter on the Great Falls Tribune Website said, "May do some good for the trout, paid guides, people with the money to go on these wilderness trips and foreign governments that sell us their oil and gas and then kill us with our own money. But chock up another loss for the working class. These development companies are under such strict reclamation regulations and I've seen these newer developments myself in other states and they look fine. All that's left is a small fenced area with a pipe sticking out of the ground in most cases and a nice well maintained road." Roads that can be dismantled later after the well is exhausted.

Indeed, the industry is being blocked at every turn, in California, New Mexico, Utah, everywhere you look there are new roadblocks, new restrictions and more and more regulations being placed on the industry making it more difficult to find and extract the energy that America needs.

While Americans certainly wish to preserve their pristine places is such action really warranted?

With Gas prices hovering at well over $3.00 a Gallon and pricing experts saying that Gas should hit $4.00 a gallon very soon, and possibly much higher in the future, is Congress doing something, Anything to get a handle on this?

With the Technology that we have today, from zero noise drilling platforms, to Horizontal Drilling techniques, the actual footprint of oil drilling equipment is getting smaller and smaller. Even in the hotly contested area of ANWR, a report issued on March of 2003 on the North Slope, showed that Caribou populations in the area were through the roof, despite 30 years of drilling. The report showed that the environmental impact in the area was incredibly small. Less than 1% of the total area was affected.

According to BP, a 20 Acre well pad in 1970 could access about 502 acres of land, meaning you had to dot the landscape with Pads to get to the oil. With today's techniques, a pad of 5 to 6 Acres can access oil on about 32,000 acres of land. Clearly, with new technology, we no longer need to dot the entire landscape with drilling pads, which of course means a lot less access roads need to be built. Additionally, frozen areas like ANWAR, new Exploration techniques are leaving nary a trace of a footprint. Solid Ice Bases and Ice Roads are being implemented that simply melt out of existence in the Summer. Leaving a single capped well head as the only evidence that humans were there.

We need to ask congress, why with rising Food and Gas prices, are they, instead of urging the Oil companies to develop more oil, they instead are doing everything they can to make more and more lands not accessible to Drilling.

Instead, congress recently passed a huge tax increase (HR 5351) on the Oil and Gas industry that discourages the very investments on technology that have made the industry much cleaner. While it might feel good to "Stick it to them", if anything this will lead to even higher prices, as the industry attempts to compensate for higher costs of doing business.

These tax increases will have the effect of telling the industry to just buy the oil from overseas and resell here at the Gas Stations, since Capital Investments will no longer be tax deductible for them, like it is for every industry in the U.S. This coupled with the closure of more and more areas to drilling, will only have the future effect of making oil even more scarce, and the more scarce things get, the more expensive things get. It's a basic law of supply and demand.

But congress isn't done raising your Gas prices, not by a long shot, a proposed Bill S. 1419, includes provisions for the Oil industry to subsidize Ethanol. A move that could double the price of Gas by 2016, even without any additional increases in Oil. And if that's not enough, congress is also considering 29 Billion in new taxes on the Oil industry to subsidize Wind and Solar Power, a move that will surely increase the price of gas even more. If all of these provisions are passed, we could easily be paying $10-$15.00 a Gallon within the next 10 years.

When the Oil Embargo of 73 happened, it had devastating effects on our economy. We ended up with the tripled gas prices, long lines to purchase gas, gas rationing, double digit inflation, double digit unemployment, 21% Interest rates to buy cars, more people were unemployed since at any time since the Great Depression. Back then we only imported 35% of our oil. Today we import 53%! More and more of our money is ending up in the hands of enemies like Hugo Chavez of Venezuela and the Middle East, who have a penchant for funding Islamic Extremist of the sort that would rather see us dead. What happens to us now if there's a future disruption of supply?

The results are clear. With the artificial caps on production, and less and less supply every year, the prices of oil will continue to skyrocket. We're starting to see the huge problems that Green Fuels deliver, so that's not a real alternative. It turns out that the debate on Global Warming, really isn't over, so we shouldn't just stop producing oil, and destroy our economy for something that might be a mistake. It's nice to dream of some day when we will have cheap and plentiful clean power from some new mystical invention in the future, but right now our economy runs on Oil. And it's running out of Gas. We need to tell congress to be part of the Solution and not part of the Problem.

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