Henry Waxman and Edward Markey have negotiated with their fellow House Democrats and predictably they all decided to tax fossil fuels and then spend that money as fast as it comes in. So the threat of climate change isn't going to harnessed used to close the massive budget deficit.
Here’s today’s news from the Congressional Budget Office on the recently passed Waxman-Markey legislation: It’s a big tax and spend bill. For the years 2010-2019 the tax increase is $872.8 billion. Ka-ching! (For the record, that’s pretty close [we’re talking government work here] to the $885 billion revenue estimate that Heritage calculated through 2019.)
The CBO estimates the spending increases in the bill add up to $863.8 billion. Wow! It didn’t take long to spend that money. The outlays amount to 98.9 percent of the expected revenue. More startling, perhaps, is that the bill authorizes expenditures of $875.2 billion. That is, they have authorized spending 100.3 percent of the amount taken in. Some of that spending is delayed, perhaps, so that there is no increase in the deficit up to 2019 from Waxman-Markey, but maybe later.
It isn't enough that the bill raises almost a trillion dollars in taxes. Oh no. It has to raise spending by even more. The Democrats could have used Global Warming as an excuse to fund their existing spending plans (which are already huge). But they are gluttons. There's no satisfying them.
We haven't had enough American industry go aboard yet. Uh uh. Still more to push off the shores. Big Oil knows it can use foreign refineries instead and avoid some of the taxes.
Under the Waxman-Markey climate bill that may be voted on today by the U.S. House, refiners would have to buy allowances for carbon dioxide spewed from their plants and from vehicles when motorists burn their fuel. Imports would need permits only for the latter, which ConocoPhillips Chief Executive Officer Jim Mulva said would create a competitive imbalance.
“It will lead to the opportunity for foreign sources to bring in transportation fuels at a lower cost, which will have an adverse impact to our industry, potential shutdown of refineries and investment and, ultimately, employment,” Mulva said in a June 16 interview in Detroit. Houston-based ConocoPhillips has the second-largest U.S. refining capacity.
With Peak Oil approaching the US refineries are going to get cut back with many closings anyhow. The oil taxes won't raise as much as the Democrats expect because less oil will get pumped and consumed. So their spending plans will make the deficit even bigger.
The corresponding Senate bill is a mixed bag. At least the Senate bill will start seismic surveys for some of the Outer Continental Shelf in areas now off-limits to drilling.
Oil and gas trade associations applauded the bill which emerged from the US Senate Energy and Natural Resources Committee on June 17 because it would open parts of the eastern Gulf of Mexico for leasing and development. But the measure contained several other elements which would directly affect the industry.
These included establishing a 30 million bbl refined products stockpile within the Strategic Petroleum Reserve; requiring an inventory of marine resources off the US coast, including seismic surveys on the Outer Continental Shelf; increasing federal guarantees for constructing a natural gas pipeline from Alaska to $30 billion; requiring Senate confirmation of nominees to be US Minerals Management Service director, and repealing offshore royalty and other incentives in the 2005 Energy Policy Act.
We need to get that OCS exploration (and Alaska National Wildlife Refuge - ANWR) exploration kicked off immediately because our available oil supply is going to start declining every year by 2016 at the outside.
Federal guarantees for a natural gas pipeline are a bad idea. The private sector should fund it if it is worth doing. I suspect that natural gas won't be needed for a while due to improvements (hydro-fracturing if anyone cares) that make the natural gas in shales accessible.
|Share |||By Randall Parker at 2009 June 30 04:49 PM Economics Energy|