Sunday, October 2, 2011

Government regulations killing the USA economy

There are probably hundreds of illustrations we could make about ways in which USA federal regulations are killing productivity and production in North America. Yet I think this article read today double underscores some of the lunacy going on within the last 40+ years of our government.

This article features Harold Hamm, his company being one of the most productive oil and gas producers in the USA currently, and it hits so many issues right on the head. His overall view is that America could be energy self-sufficient within 10 years if the same money that is spent on unknown technologies and less regulations were put into drilling the vast oil and gas reserves in Americas mainland. He also claims that the jobs and revenue that would be produced from freeing up the industry to meet its potential would pay off the trillions of national debt in short order. BUT, it seems that the powers that be in Washington are totally focused on new “green energy” sources and undeniably sustaining our “wonderful” relationship with the Saudis and others who gain so many billions from our oil consumption habits.

Now, before you get confused if you have read my other blogs about being pro renewable energy sources…I have not changed my mind about that. The reality is that we are 15-20 years minimum from many people`s estimation who are more informed than me from developing the technology needed to replace fossil fuels. In the meantime we continue to fork over billions of dollars to Arab countries and and the likes of Venezuela, who has all but declared war against American interests, to sustain our unquenchable thirst for oil and gas to keep our engines running…and I´m not just talking about cars and airplanes. Mr. Hamm`s opinion that I tend to believe is that we COULD be oil self-sufficient in just a few years if the federal regulators allowed them to explore and extract the vast resources we already have.

I`m sure many of us including myself are concerned about balance in all these things. I am pro environment though I probably don’t go to the extent of “hugging trees” to make a political statement. I think our government SHOULD have a role in protecting nature and the environment, yet it is unrealistic that we should think that every bird or tree in the country could be protected from development, including developing our own energy. Here are just a few brief clips of Mr. Hamm’s observations of federal mismanagement of the issue:

Mr. Hamm was invited to the White House for a "giving summit" with wealthy Americans who have pledged to donate at least half their wealth to charity. (He's given tens of millions of dollars already to schools like Oklahoma State and for diabetes research.) "Bill Gates, Warren Buffett, they were all there," he recalls.
When it was Mr. Hamm's turn to talk briefly with President Obama, "I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this." The president's reaction? "He turned to me and said, 'Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.'" Mr. Hamm holds his head in his hands and says, "Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing."

Washington keeps "sticking a regulatory boot at our necks and then turns around and asks: 'Why aren't you creating more jobs,'" he says. He roils at the Interior Department delays of months and sometimes years to get permits for drilling. "These delays kill projects," he says.

A few months ago the Obama Justice Department brought charges against Continental and six other oil companies in North Dakota for causing the death of 28 migratory birds, in violation of the Migratory Bird Act. Continental's crime was killing one bird "the size of a sparrow" in its oil pits. The charges carry criminal penalties of up to six months in jail. "It's not even a rare bird. There're jillions of them," he explains. He says that "people in North Dakota are really outraged by these legal actions," which he views as "completely discriminatory" because the feds have rarely if ever prosecuted the Obama administration's beloved wind industry, which kills hundreds of thousands of birds each year.

It's hard to disagree with Mr. Hamm's assessment that Barack Obama has the energy story in America wrong. The government floods green energy—a niche market that supplies 2.5% of our energy needs—with billions of dollars of subsidies a year. "Wind isn't commercially feasible with natural gas prices below $6 per thousand cubic feet, notes Mr. Hamm. Right now its price is below $4. This may explain the administration's hostility to the fossil-fuel renaissance.

Mr. Hamm calculates that if Washington would allow more drilling permits for oil and natural gas on federal lands and federal waters, "I truly believe the federal government could over time raise $18 trillion in royalties." That's more than the U.S. national debt, I say. He smiles.

Another example of our government`s mismanagement of their regulatory spending and role in energy was the widely publicized failure of a California company, Solyndra, which after receiving $535 million in federal loan guarantees built a $733 million dollar plant which has now been closed and shuttered after just opening in January. Its construction featured “robots that whistled Disney tunes, spa-like showers with liquid-crystal displays of the water temperature, and glass-walled conference rooms. "The new building is like the Taj Mahal," John Pierce, a San Jose resident who worked as a facilities manager at Solyndra, said. All of this was constructed during a time when… “about 11.4 percent, or 950,801 square feet, of industrial space was vacant” in the Fremont, CA area. Another nice use of the taxpayers money wouldn`t you say?

The bottom line for me in all this is that America has many available solutions to jobs, clean energy, domestically produced gas and oil and even significantly higher tax revenues…IF we can keep the federal government from over regulating, micro managing and gouging the domestic energy producers in deference to foreign interests. The government should NOT be backing loans with your and my money to benefit one private business entity over another. This power was never granted in the US Constitution. It also seems very clear to me that the government is significantly in the way of economic recovery. Let’s remember that most jobs created by government are paid for by the taxpayer. Jobs created by enterprise and private business generates huge revenues for the government…and SUPPORTS the taxpayer.

1 comment:

sonia bibiana said...

La historia se repite siempre. La misma canciĆ³n de siempre.