When I learned about this Legislation, I had no idea that one of the supporters of Higher Taxes on Oil and Gas would be Mort Kondracke, the Executive Editor of the Newspaper Roll Call. Mort's article Who'll Have Courage to Call for Gas Taxes as Energy Answer? claims Higher Taxes on Gas and Oil is a good idea. Fortunately he does not believe Congress has the Guts to pass this Legislation. Then I found this gem in Mort's article.
Rebates could be provided to diminish the impact on poor people and taxes could be cut when oil, gas and coal companies develop "clean" technologies.But the poor are not the only ones who will be effected. We all will. And it's laughable to think that taxes will be cut when "clean" technologies are developed. Exceptions include Bush's Tax Cuts, but most politicians never met a tax they didn't like. And Mort's rational that the rest of the world charges more for oil and gas is no reason we should.
Untapped domestic oil and gas is available in the Gulf of Mexico and Alaska, and domestic refinery capacity has not changed in the last 30 years. While I agree we need to become more energy independent, an increase in Gas and Oil Taxes is not the way to accomplish independence. Income Tax Cuts have produced a booming economy. By expanding incentives and Tax Benefits to include the use of Wind, Nuclear and cleaner burning Wyoming Coal for Electrical Energy, we would be a lot closer to Energy Independence. Alternative Energy implementation plus continued Tax Benefits for domestic Oil and Gas production combined with greater refinery capacity would bring the same healthy expansion in domestic production and decrease Foreign Energy dependence.
I have not included Ethanol as an energy solution. Ethanol is not at present a good choice for energy independence. Economically, Ethanol production must be made from corn and sugar. However, there is not enough land to support the increased crop need for present use AND Ethanol production. Corn is used in Animal Feeds and other Food products. Food and especially meat prices would increase due to the increased corn demand. Ethanol produces much less energy than gasoline. Therefore, more gallons of Ethanol are required to realize the equivalent energy of Gasoline, so we need to fill up more often. Gasoline engines need modifications to burn Ethanol. Pipelines would require expensive modification to carry ethanol and until that's done, shipments would have to be made by truck and train.
Ethanol as a major energy replacement will not become a viable alternative until an economical method is found to use other organic or synthetic methods to produce, transport and use it in volume. Talk about using sawgrass, and other materials is still too expensive to be considered.
Big Oil currently produces profit amounts which make them appear to the average Joe or Jane as gouging the public. But if you take a look at what the profits really mean, Big Oil is quite a ways down the list. For example, if most Commercial Banks had the gross sales of a Exxon Mobil, the Bank's profit would have been almost twice as much. And Big Oil showed only about a third of the profit margin of the Drug Industry. That's why the Big Oil stock value can fall while record profits are made. Wind fall profits taxes are a bad idea, but politicians propose them due to the emotion rather than reason. Generally speaking, if you were in business for yourself and made the same profit margin as Big Oil, you would consider it a bad year.
The Boston Tea Party was executed as a protest against the increasing taxes on Tea. We should have learned from our History that increased taxes are not a good idea. We have seen that a good way to increase tax revenues is to allow greater sales through expanded investment and job creation. More money being made is equal to more tax being paid.