Tag Archives: Oil Drilling

News

LSU Professor: Repeal of oil industry tax credits will cost 150,000 jobs

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From Marathon Pundit.

Excerpt:

Two days ago I participated in a blogger conference call with Dr. Joseph Mason, a professor of finance and the Hermann Moyse Jr./Louisiana Bankers Association Endowed Chair of Banking at Louisiana State University’s E. J. Ourso College of Business.

Since the Deepwater Horizon blowout began spilling oil into the Gulf of Mexico, Mason has been a consistent voice in support of energy industry jobs. A moratorium on drilling in the Gulf could would have devastating results on employment, Mason warns. But that’s not the only threat to energy industry jobs. On Monday Mason released his latest study on tax policy, “Regional and National Economic Impact of Repealing the Section 199 Tax Deduction and Dual-capacity Tax Credit for Oil and Gas Producers.”

Dual-capacity allows oil companies to deduct taxes it pays abroad, something I was able to do when I owned a mutual fund comprised exclusively of foreign stocks. Section 199 allows companies to deduct up to nine percent of their net income derived from domestic oil production.

Okay…so what if the oil industry pays more tax? Well, that puts our nation’s energy industry at a disadvantage. Specifically, Mason argues, “Without it US-based [energy] firms compete on an uneven global playing field against Russian and Chinese firms that receive substantial state support.”

“The higher energy taxes would cost by my estimates,” Mason added, “some $341 billion in lost economic activity and $68 billion in wages.”

Wages means jobs…Just in the next year our economy will lose 150,000 jobs in the next year if President Obama and the Democrats have their way on dual-capacity and Section 199. And they might. Yesterday the Senate struck down an amendment by Florida Senator Bill Nelson, a Democrat who sees the light, to keep Section 199 in place.

As for job losses, where will they come from? Obviously in the Gulf states, but in others too. Texas will lose 38,000 jobs and Louisiana 13,500. But in other states–such as California, the painful effects will be felt as well: 23,000 lost jobs there, as well as 4,000 more in Ohio, Indiana will suffer 3,000 layoffs, and my own Illinois, which is not a big oil producer, will lose 4,500 positions. And that is just in year following the repeal of Section 199 and the dual capacity credit.

I’ll conclude with a quote from Rep. Paul Ryan (R-WI), “You can’t love jobs while hating the people who create them.”

I stole his whole post! I hope John doesn’t mind.

As for job losses, where will they come from? Obviously in the Gulf states, but in others too. Texas will lose 38,000 jobs and Louisiana 13,500. But in other states–such as California, the painful effects will be felt as well: 23,000 lost jobs there, as well as 4,000 more in Ohio, Indiana will suffer 3,000 layoffs, and my own Illinois, which is not a big oil producer, will lose 4,500 positions. And that is just in year following the repeal of Section 199 and the dual capacity credit.

I’ll conclude with a quote from Rep. Paul Ryan (R-WI), “You can’t love jobs while hating the people who create them.”

News

Offshore drilling moratorium would cost 175,000 jobs per year

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From Big Government. (H/T ECM)

Excerpt:

During a 45-minute conference call with journalists from 40 major media outlets this morning, Jack Gerard shared some startling predictions about the future health of the nation’s oil and natural gas industry if the Obama Administration gets its way in adding more regulation and increasing taxes on offshore drilling in the Gulf of Mexico. The biggest one of all is enough to cause anyone to take pause:

“The administration’s moratorium, if continued indefinitely — or similar legislative proposals which would make the deep water unavailable or uneconomic — would cost this country 175,000 jobs every year between now and 2035, according to our latest analysis,” said Gerard, president of the American Petroleum Institute, a group representing some 400 oil and natural gas companies.

The story has more scary effects of a complete shutdown of deepwater drilling. One of my friends who I am staying with during my vacation says that the real number is closer to 200,000 jobs per year.

Commentary

First oil rig leaves USA for Egypt following Obama’s talk of drilling ban

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From the Houston Chronicle. (H/T Michelle Malkin)

Excerpt:

Diamond Offshore announced Friday that its Ocean Endeavor drilling rig will leave the Gulf of Mexico and move to Egyptian waters immediately — making it the first to abandon the United States in the wake of the BP oil spill and a ban on deep-water drilling.

And the Ocean Endeavor’s exodus probably won’t be the last, according to oil industry officials and Gulf Coast leaders who warn that other companies eager to find work for the now-idled rigs are considering moving them outside the U.S.

Devon Energy Corp. had been leasing the Endeavor to drill in the same region of the Gulf as BP’s leaking Macondo well, which has been gushing crude since a lethal blowout April 20.

But Diamond announced Friday it will lease the rig through June 30, 2011, to Cairo-based Burullus Gas Co., which plans to send the Endeavor to Egyptian waters immediately.

Devon is one of three companies that has cited the deep-water drilling ban in trying to ease out of contracts to lease Diamond rigs. Diamond, a drilling company, said it expects to make about $100 million from the deal, including a $31 million early termination fee it recovered from Devon.

Larry Dickerson, CEO of Houston-based Diamond, signaled that other of his company’s rigs could be relocated, too.

“As a result of the uncertainties surrounding the offshore drilling moratorium, we are actively seeking international opportunities to keep our rigs fully employed,” Dickerson said. “We greatly regret the loss of U.S. jobs that will result from this rig relocation.”

I went to sleep in the USA and I woke up in communist Venezuela.

You bash corporations, you lose jobs. Do you know what causes outsourcing of jobs? Attacking businesses with tariffs, regulations, lawsuits, and taxes. Environmental regulations, labor regulations, etc. That’s what causes outsourcing of jobs. If you want businesses to start here, to stay here and to move here from abroad, you create a business climate with low taxes, minimal regulations, and no unions. We should be drilling in ANWAR and building nuclear power plants, not kicking out oil rigs. We needed those jobs.

What about Obamacare?

From Investors Business Daily.

Excerpt:

“Independent experts have found that the new health law will increase the cost of health insurance and health care services,” the two doctor-senators say, noting the Congressional Budget Office concludes that “premiums for millions of American families in 2016 will be 10%-13% higher than they otherwise would be. This represents a $2,100 increase per family, compared with the status quo.”

Two thousand dollars more? Did something hidden in the 3,000 pages of the ObamaCare bill, which the White House and leading congressional Democrats moved heaven and earth to get passed, make those evil health insurers even greedier?

Or is it greedy Uncle Sam? As the senators point out, “According to an April 2010 memo from the Actuary of the Centers for Medicare and Medicaid Services, the medical device and pharmaceutical drug fees and the health insurance excise tax will generally be passed through to health consumers in the form of higher drug and device prices and higher insurance premiums, with an associated increase in overall national health expenditures.”

Add to that the fact that according to the Joint Committee on Taxation, much of ObamaCare’s new taxes will trickle down and end up being paid for by health care consumers. These include “the $60 billion tax on health plans, the $20 billion tax on medical devices and the $27 billion tax on prescription drugs.” Makes you wonder which party is on the side of the little guy.

Perhaps Obama was hoping that the businesses he is taxing would take the blame for the increases in premiums. That might have flown in the days before the Internet, but it doesn’t fly today. But it gets worse – much worse.

What about deficit-spending?

More from Investors Business Daily.

Excerpt:

Based on current estimates, today’s total federal debt of just over $13 trillion will hit $20 trillion by 2020. Beyond that, the coming retirement tidal wave of 65 million baby boomers will push Social Security and Medicare spending to stratospheric levels. America’s debts will become crippling.

By some estimates, total U.S. commitments for entitlements total $107 trillion over the next 75 years or so. That’s an unpaid tax bill of $912,000 per household, or $351,000 for each child born today.

[…]Today, the federal government alone is spending around 25% of GDP, compared with its long-term average of 18%. If expected massive deficits are closed with taxes rather than spending cuts, it will require a 25%-plus increase in the real size of government.

That won’t be the end of it. Absent serious spending cuts, spending will rise to 32% of GDP by 2030, Congressional Budget Office data show. At current levels, taxes on Americans would have to rise 78% to pay for all that spending. Ready for that?

By the way, when state and local spending are added in, government in a few short years will take up more than half of all U.S. GDP. In short, the U.S. is essentially on the road to becoming just another stagnant, state-run welfare economy.

Suppose you were a young man with a decent salary. Should you make the decision to get married and have children? Children who will owe hundreds of thousands of dollars because Obama had to buy votes using taxpayer money? I guess Democrats don’t want to be bothered with love, marriage and parenting. I guess Democrats just want a check from the government.