On Energy, the Path is Clear: Lower Taxes, Less Regulation
May 21st, 2008 by Peter SudermanYesterday, I listened in to a blogger conference call with Peter Robertson, Vice Chairman of Chevron’s board. Much of the call naturally centered on gas prices and, of course, the basic issues of supply and demand which drive pump prices. I can’t say I agreed with his statements about the need for biofuels (I’ve been pretty clear on where I stand on that), but Robertson was pretty effective in making a single point: The only way to bring prices down is to increase the supply. And if Congress wants to take action, the best way to do that is to get rid of the myriad regulatory barriers that impede investment.
Right now, the U.S. actually employs far less of its offshore drilling capacity than many other countries – even European countries. Denmark, for example, leases 100% of its offshore capacity; the U.K. uses nearly all. Here in the U.S., on the other hand, regulations prohibit exploration of 85% of the continental outer shelf.
We hear a lot about, say, ANWR, but the regulatory barriers to expanding production even at uncontroversial sites is high; Robertson said that at one location near San Diego, Chevron had been trying to get an expansion permit now for four years.
Meanwhile, every few years or so, Congress tries to impose “windfall profits” taxes on oil companies – taxes that are sure to discourage investment and drive up prices. (These efforts seem to ignore the fact that the total amount of income tax oil companies pay has already shot up more than 600% since 2002, to more than $90 billion a year. )
There’s obviously no perfect, easy legislative solution to gas prices. But the sort of obstructionism we see now from energy regulators certainly isn’t going to move us in the right direction.
May 21st, 2008 at 5:56 pm
LOL…when is “Lower Taxes, Less Regulation” NOT you’re solution for everything?? That’s what being a partisan is all about IMO.
“The only way to bring prices down is to increase the supply.”
And of course you’re in favor of supply-side solutions…lol…lowering demand by doing things more efficiently is right out…lol…
As far as “offshore drilling capacity”, yea…those raving liberal Governors in FL & CA need to get on the band-wagon with ruining their coastlines.
“taxes that are sure to discourage investment and drive up prices.”
Except for the little fact that the last time they were employed in the 1980s, the price of oil fell…ooopppss…
May 21st, 2008 at 7:58 pm
I’m really serious with this question: What part of finite resource do you not understand?
Even if you think oil will last 300 years, at some point your ancestors will pay the price for the blinders you wear coming down the stretch.
You’re right about one thing, we should encourage investment… like Chevron’s investment in geothermal, or BP’s investment in solar, or the federal government’s investment in creating a fair playing field for renewables. I don’t even mind if the feds don’t extend the ITC for renewables so long as we stop subsidizing a 150 year old industry that continues to enjoy record profits. Fair is fair right. No subsidies for renewables, no subsidies for burning fossil fuels.
Less regulation, if you mean it sincerely, also means that we don’t line the pockets of the oil industry with tax credits to ensure that they’ll keep drilling for the expensive oil once the cheap stuff has gone up and smoke (in the coming months).
Have you guys thought about who will fund this sad site once oil hits $250/barrell… We won’t have the luxury to wear blinders then… Good luck!
Freedom does work. Freedom from foreign oil, freedom from any oil, freedom from that which is killing us… What a concept!