The price at the pump has increased 28% in just the last four months, 116% since Barack Obama took office.
The reaction from the White House and the Democrats?
Punish the energy industry with $85.5 billion in new taxes – a penalty that will further discourage domestic production and sure to be passed on to consumers driving prices even higher.
The President says that oil and gas should pay their "fair share." I did a little checking and found that the industry pays an average 41.1% of net income in taxes compared to 26.5% for all other S&P industrials. Only the most died-in-the-wool oil and gas haters can possibly think 15% more isn't enough.
Oil and gas also ponies up billions of dollars each year in royalties, rents, and leases. Back in 2008 when the last gas price spike occurred, the Bush Administration encouraged more domestic production by issuing new leases and permitting new wells.
Production went up, prices at the pump fell, and those royalty revenues more than doubled from the previous several years to $23.3 billion, according to the Office of Natural Resources Revenue (ONRR).
But, when the Obama Administration took over, one of the first actions by Interior Secretary Ken Salazar was to cancel many of those leases. Then after the Deep Horizon well explosion, Salazar put a moratorium in place in the gulf as well as many other restrictions and drilling bans throughout the nation and offshore.
In 2010, royalty, rent, and lease payments declined to just $8.6 billion from oil and gas companies; a decline of $14.7 billion from 2008.
In the gulf alone, the Administration's policies have led to a decline in production of 300,000 barrels per day, and the Energy Information Administration projects another 300,000 bpd decline this year. That means a 35% decline in production in the region that supplies about a third of all domestic supply. In February, 2011 of 126 drilling rigs in the Gulf of Mexico, only 25 were operating; half the total prior to Salazar's moratorium.
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for August 1st, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for July 31st, 2014 | John Ransom