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By Robert Rapier on Aug 5, 2007 with no responses

Pure Venom

It is disturbing to me that an industry that plays as important a role in modern life as that of the farmer is so vilified. It must be that people simply do not recognize the role the oil industry plays in their lives: From medicine to food to clothing to housing to transportation – today all are heavily dependent upon the oil industry. Yet somewhere a group got together and said “Hey, let’s slap a bunch of additional taxes and burdens on the oil industry. Surely they will bear the burden and there won’t be any impact on all of the citizens that depend upon their products”:

House slaps $16 billion in taxes on oil industry

“There’s a war going on against energy from fossil fuels,” said Rep. Ralph Hall, R-Texas. “I can’t understand the pure venom felt against the oil and gas industry.”

A lot of people immediately peg me for a Republican because of my sometimes harsh criticism of the energy policies that Democrats often embrace. I don’t see too many (any?) Republican policies that I can endorse either (Hey, let’ s just drill in ANWR!), but they aren’t the party that always vilifies the oil industry and scapegoats them as the reason for high energy prices. I think that a positive feedback loop has been set up here where the Democrats are hostile to the oil industry, which therefore sends campaign money to the Republicans, which keeps the Democrats hostile.

I actually think that of all candidates in either party, Democratic presidential candidate Bill Richardson has the most coherent energy policy, and he has a track record in New Mexico that demonstrates that the subject is very important to him. But in my opinion the Democratic Party has the more naïve view of energy. This bill is a perfect example. More from the Houston Chronicle:

House passes energy package

Swatting away objections from a cadre of energy state Democrats, the House voted 241 to 172 in favor of a 786-page energy bill and 221-189 for the companion tax package targeting the oil and gas industry.

With these votes, “the House propelled America’s energy policy into the future,” said House Speaker Nancy Pelosi, D-Calif.

Rep. Edward Markey, D-Mass., called the vote on that provision, which passed comfortably, the “energy vote of the decade.”

The tax bill slaps the oil companies with $16 billion in taxes. Among other provisions, it would exclude the companies from a scheduled rollback in the corporate tax rate for U.S. manufacturers, increase the taxes on their operations overseas and complicate their efforts to write off exploration and production expenses.

That corporate tax rate benefit, incidentally, is only being rolled back for the oil industry. Other manufacturers will continue to enjoy it. How on earth do they think the industry can plan long term projects if the rules are changed in the middle of the game ala Hugo Chavez? Oh, right. They don’t think long term projects are needed, because they have mandated that the future will be bio-powered. I wonder what happens if they are wrong?

Rep. Kevin Brady, R-The Woodlands, called the tax bill “extreme … even vindictive.”

Environmentalists, in contrast, were elated by the bill’s success. Philip E. Clapp, president of the National Environmental Trust, called the package “a substantial down-payment in reducing global warming emissions.

I beg to differ. I am an environmentalist. I am not elated. I see some good things in this bill, and a lot of very naive thinking.

While I don’t think it will ultimately be passed into law, just once I wish our political leaders could look into a crystal ball and see the consequences of their actions. I understand that they believe if they extract money from Big Oil and spread the money around, we will all enjoy a happy, green future as Big Oil goes the way of the dinosaurs. Instead, they will find themselves explaining to their constituents in 3-5 years why they are now paying $5/gal for gasoline, and yet still have no viable substitute. Or more likely their successors will. And I don’t have a problem with $5 gasoline, but I do have a problem with lost opportunities and failure to confront the real problems.

Of course the real kicker is that even when oil companies decide to produce alternative fuels and are eligible for the tax benefits, some proponents cry foul and they suddenly become “oil subsidies.” This goes to show that the mentality in many cases is not pro-biofuel, but rather anti-oil company.