Marshall Joins The Sensible Center On Oil Drilling

Jim Marshall, after spending his summer recess getting an earful from the folks back home, has teamed up with Republican Roscoe Bartlett of MD to endorse a drilling plan.

From The AJC:

Virtually all general drilling bans should be lifted. We should permit drilling offshore and in the ANWR and require that it be done with appropriate care.

Before granting additional drilling rights, however, we should fundamentally change the terms of future oil and gas lease agreements to ensure that taxpayers capture more of the revenue from our remaining reserves.

Today’s agreements provide exceptional profits for leaseholders when prices rise, so much so that leaseholders have a significant financial incentive to delay production until prices rise. That must change….

I’m really, really, going to regret saying this, but it sounds a lot like the approach Sarah Palin took in Alaska.

33 comments

  1. I have no problem with the government getting a fair price for leasing land in situations like this. Obviously we all pay for it at the pump but if it’s used to reduce the public’s tax burden (ala Alaska) that’s a good deal overall.

  2. Old Vet says:

    I’m a lone wolf on this, but the key phrase in his comments is “our remaining reserves”. Almost everyone agrees that at some point in the future the oil reserves will dwindle and dry up. One future generation, not too far down the line, will need oil in a serious way. We are upset about paying a few pennies more than we want to for gasoline, but for them it could be a matter of survival. Aren’t we being more than just a little selfish about wanting it all, right now, just for us?
    It’s bad enough that we’re in the process of destroying the economic future of the country by borrowing to support our life style without any plans to repay the debt. Now we want to drain every drop of oil and leave the future citizens with dry holes? We need to live within our means.
    I say leave the oil where it is and start seriously trying to reduce consumption and develop alternative sources. We have plenty of oil – for the moment.

  3. Icarus says:

    At least for me, it’s not about making it cheaper, OldVet. It’s about not paying folks that want to kill us for what we have here.

    Drilling is only one small part of the puzzle. But it’s one of the easiest. We must use the oil we get here to replace mid-east and Venezuelan oil, while we prioritize nuclear, wind, natural gas, clean coal, etc.

  4. bowersville says:

    I read changing the terms and conditions of the leases and don’t know if the actual legislation will mention mineral rights.

    But if it does, you’ve heard the first shot of the states rights vs federal rights vs mineral rights war in the lower 48.

  5. I believe the odds of Nancy Pelosi not being speaker next year are something like 0.00001%. So, who is Rick Goddard supporting for Speaker might be the better question. Or maybe, who will Rick Goddard draft for his fantasy Congress team is more accurate.

  6. Donkey Kong says:

    Old Vet, Icarus, et al–

    The claims by those such as Old Vet who are fearmongering on the end of civilization should we run out of oil will only prove correct if we no longer have a free market, and if we no longer reward ability and merit.

    A free market provides incentives for people to provide solutions. The motor of the world will stop running not if we run out of oil but if individuals no longer have the ability to invest, invent, and create profits from their ideas.

    Example: Let’s say that ExxonMobile creates a new oil detection device that accurately determines how much accessible oil remains in the earth, and we realize that we have only 5 years worth of oil remaining. That’s a crisis of epic proportion. Suddenly, motor vehicles would be forced to run on some other kind of fuel or not run at all. I don’t know how many motor vehicles, including cars, trucks, boats, 4-wheelers, etc. run on gasoline, but suffice it to say that the market is HUGE, and the demand equally huge for a substitute to oil. This creates a massive and near immediate opportunity for profit, and people throughout the world will divert their creative energies, and capital, to finding a solution to this problem. Why? Profit potential. Keep the profit potential and your fearmongering will never become reality. Keep in mind that this situation is worst case scenario. More likely than not, if oil supplies are in fact dwindling and the price of oil continues to rise from both supply shortages and higher marginal costs from drilling in less efficient oil fields, then substitute products previously considered uneconomical, which includes a variety of alternative fuels, are suddenly competitive and the market for these alternatives grow. As more and more companies enter alternative fuels, investment in this field grows, making this fuel more efficient and less costly, and, combined with these entrants’ providing greater supply, the cost of these fuels begins to drop.

    I support drilling because we will all be better off with that oil out of the ground and in the market place, manifesting itself through lower prices. A nice side effect would be that profits go to Americans, and not supporters of the Radical Islamic War on Freedom, but its only a side effect.

    Americans, indeed, citizens throughout the world are beginning to act as if capitalist systems never have problems arise. They do, but problems come up in every economic system. The difference is that capitalist systems provide an environment where solutions are reached.

  7. odinseye2k says:

    DK –

    Physics trumps economics. You can’t discover what isn’t there. And if what you discover requires more energy to extract (or refine into a useful form) than it produces, it fails as an energy source. It’s just as true for super-deep crude as it is for corn-based ethanol.

    Oil is reaching its limits as a fuel technology. The time is here to switch to something else. We’ve got a lot of candidates – the question is what is going to shoot up first and if we will have the infrastructure (the power grid able to transmit much further than today) necessary to tap it.

  8. odinseye2k says:

    “A free market provides incentives for people to provide solutions.”

    And your faith in the market does work, but then you can’t gripe about four dollar gas. Your pain is the invisible hand at work.

  9. Progressive Dem says:

    Too bad we didn’t listen to Carter 30 years ago. We might be further along with those alternatives and less dependent on foreign oil.

  10. bowersville says:

    If we’d listened to Carter 30 years ago we might still be in those 1500 deep lines waiting for 2 gallons of gas and 22% interest rates.

    No thanks, Jimmy needs to stick to beating those silly rabbits over the head with a boat paddle.

  11. slyram says:

    Doug Deal….why are you asking questions like that….you and I both know Rep. Marshall can do that. Sanford Bishop is the sensible center..
    Marshall makes the votes he likes and hopes the real Dems don’t catch on. I would watch that race and not assume anything. Dissing Obama might turnoff supporters of the senator—-I hope.

  12. odinseye2k says:

    Also, I find Marshall’s statement rather interesting in the part where he talks about the “unintended gift” of environmentalists.

    In other words: “I’d like to thank people of longer vision than myself so that I can acquire short-term benefit instead of a predecessor.”

  13. Donkey Kong says:

    odinseye2k-

    You’re right. I’m not saying we’ll find more oil, but that if there really is not more oil out there, then the market provides incentives for us to create solutions. Instead, we have the government trying to come up with pathetic solutions to something they don’t even know for sure is a crisis (i.e. we don’t know for a fact we are running out of oil or if the lack of supply growth is from the very real problem in the industry of under-investment in drilling and extraction platforms; and our government’s solution by turning to ethanol did more harm than good by creating substantial price inflation in agricultural goods).

    “And your faith in the market does work, but then you can’t gripe about four dollar gas. Your pain is the invisible hand at work.”

    Agreed. And you won’t hear me complain about it. I don’t like paying $4 gas, but oil companies and their investors took risk by investing in the oil industry when supply was high and prices (and profits) were low. When investors invest in an industry when profits are low, nobody complains. When those investments start producing profits, though, people start getting upset. “They are gouging the common man,” discontented populists claim. But without this profit potential, there would never have been an investment in the first place. So take your pick. You can’t have investment without the expectation of ensuing profits. Take away the profits, and you’ll take away the infrastructure investment any advanced society needs.

  14. GreenAllTheWay says:

    Let’s all just agree to go green! A great way is for everyone to stop buying that fish wrapper, the AJC. The news is old, and inaccurate anyway. GO GREEN! Save the planet….and a tree : )

  15. Rick Day says:

    Thread observations:

    Because of COURSE the answer is more fossil fuel. That will fix the problem. Forever. Uh huh…. *coughBANDAIDcough*

    Whats this drivel about ‘reaching out’ across the aisle? From the “top shelf Republican elite’ that frequent this blog?

    Whistle past the graveyard much?

    When I read that, I had a flash to the good guy/bad guy wrestlers. Bad guy would pummel the good guy with dirty tricks until good guy legitimately gets upper hand. Then, of course, what doe the bad guy do?

    He holds out his hand in ‘friendship’. Until he can cold cock the good guy again.

    Most all of you hated McCain this time last year, but of course today you fawn and man-crush. You blindly follow McChurian ™ right off the cliff. EVEN IF HE WINS WE ALL LOSE.

    Pardon me if I scoff at your sincerity. I’ve told you people for YEARS this was going to happen, only now its MASSA President and not MADAM President.

    You reap what you sow, you pathetic group of partisan hacks. Quit screwing up my country and quit electing career political pigs.

    Ron Paul never looked better to this independent voter.

  16. slyram says:

    As a kid in school, we were taught that Alaska was purchased for it’s natural resources and the place is so big that you could protect the vast majority and still drill, drill, drill as T Boone says.

  17. btpull says:

    Green technologies can harm the environment as well. Instead of developing energy policies based on a set of buzz words we need to let the markets evaluate the pros and cons of each technology and drive the allocation of resources. Unfortunately we simply have mentality that oil is bad and green is good.

  18. Goldwater Conservative says:

    What is your idea of “sensible center,” Icarus?

    The left said no way, no how.

    The right said, drill everywhere…screw the beaches and tourism industry.

    The middle was: “We have 64million of currently held leases that are not being drilled. On shore and off. Drill there.”

    Have you, like most of the country, not been informed about this?

  19. Icarus says:

    OK, Mondale Conservative, I’ve put my ideas about drilling here and here, among other places.

    What you guys on the other side can’t seem to understand is that you throw out talking points, like this crap of 64 million acres, and refuse to engage on a topic that 70% of the American People support.

    Instead of throwing out red herrings about land that doesn’t contain oil, why not actually try to add things to a bill that safeguard the things you want? Why not insist on an imported oil tax so that new oil, drilled here, replaces foreign oil, so that we still have incentive to conserve and use less? Why not insist that some of the federal royalties from oil extracted go to environmental preservation and reclamation projects in the drilling areas?

    The fact of the matter is, most people in this country understand that drilling is only one small part of the solution to this problem. The longer you guys refuse to engage, the more likely you’re going to have a lot more Republicans than you expect after November.

  20. Goldwater Conservative says:

    Big deal if 70% of the people support it. Do another poll, then another, then another.

    The people do not always have the interests of the country in mind when they make decisions.

    You do have some decent ideas that would inevitably be the end result of political bargaining. The dems come to the table with the far end of what they want, the repubs do the same…hopefully consensus is reached. That is not going to be the case on this issue…not until next January or February atleast.

    the Dems will probably pick up 30 seats in the house and 6 or 7 in the Senate. The GOP has to relearn that with those numbers…legislation just does not make it through the chambers of Congress. Fairly often…members will not be recognized to speak.

    The GOP has to moderate. Maybe in 2010 they can put a dent in the Democrats majority…but that is also dependent on who the president is.

  21. Goldwater Conservative says:

    Icarus,

    I am not worried about the environment…not to much at least.

    Fact is, we are not going to be dependent of oil as a nation for another 50-100 years…if ever. Think national security.
    If we are going to lift the bans and drill…the oil should be sold at cost. That oil belongs to “we the people.” It should be a public utility. I will not be around for too many more years…but that oil should be used for the good of the country, not the good of a few billionaire’s wallets.

  22. Icarus says:

    Another red herring, only the oil companies benefit from drilling.

    Public Utility = Nationalization of the oil industry.

    Look at every, EVERY country that has tried this. Despite technological advances, their oil production is declining.

    Then look at the U.S., where the government, through taxes, makes 4 times what the oil companies make from a gallon of gas (or other finished product).

    We the people are doing quite well, thank you. However, it’s not to say that the oil companies should be given land at below market prices, nor be allowed to keep potentially productive land out of production. The letter referenced above by Marshall and Bartlett includes some of these safeguards. There can be others.

    My point was, is, and will continue to be, that a bill needs to happen, and drilling needs to be open both offshore and in ANWAR. The exact terms remain to be negotiated that should provide for environmental protection, production requirements, and a fundamental shift toward energy independence.

  23. HCAN Fan says:

    Whatever you think about whether allowing more drilling, you know it’s not going to affect gas prices or help average Americans AT ALL right now, and if it does eventually help us with our dependence on foreign oil, it will only make a tiny dent. We need a COMPREHENSIVE ENERGY PLAN. And if we invested in cleaner, renewable energy, we’d provide more jobs, rid ourselves of our energy dependence, and possibly have a chance at stopping human-produced global warming before its too late.

    Of course bringing up ideas like this, which would include some BALANCE of regulated capitalism and government incentives, brings up instant charges of socialism and the idea that if we’d just let the market regulate itself, everything would be fine.

    It’s extremely important to put all of this into a historical context. One of conservatives’ favorite targets when they’re trying to argue that the government shouldn’t do anything to help it’s people and that everything should be left to corporations, is the New Deal. But history is clear here:

    1. Policies implemented in The New Deal stabilized the banking system within one month, cut skyrocketing unemployment in half and increased our gross domestic product by 50 percent.

    Um, yeah. Let’s repeat that:

    Policies implemented in The New Deal stabilized the banking system within one month, cut skyrocketing unemployment in half and increased our gross domestic product by 50 percent.

    2. We’ve had years of “conservative” economic policies and look at the deepening mess we’re in: tax cuts for the rich continuing to only make the rich richer and the poor poorer, unemployment the highest its been in a decade, the mortgage crisis, and huge numbers of Americans unable to afford basic health care.

    Come on people. These are not radical concepts. Look around, and look at history, and it becomes clear that — no matter what you’d like to believe — it’s time to get a grip on reality and invest in common-sense, compassionate, proactive programs – like the New Deal programs were — to get America back on track.

    Invest in America’s Future says that it is this “next new deal.” http://www.NextNewDeal.org

    It calls for these fundamental changes:
    — Guaranteeing quality, affordable health care for every American.
    — Strengthening our educational system – especially by making early childhood education and two years of college a right.
    — Investing in a clean energy economy.
    — Declaring independence from foreign oil.

    In order to invest in these necessities, we need to get back the funds being wasted in the unnecessary war in Iraq. Of the $135 billion the president has requested in Iraq funding for the rest of this fiscal year and all of next fiscal year, Georgia’s share alone ($3,906,547,060) could be used to provide Georgia with 32,325 affordable housing units, 66,836 elementary school teachers, or health coverage for 993,795 children and adults.

    These are things we all want (unless we just want to get rich off of other people’s suffering.) Urge your legislators to sign on to Invest in America’s Future. And sign on yourself. Visit http://www.nextnewdeal.org to find out what’s being proposed to get our country back on track.

  24. Doug Deal says:

    HCAN,

    You are so right; the “New Deal” was such a wonderful program. The market crash happened in 29, Roosevelt was elected in 32, and the Depression was not over until we entered WWII in 1942.

    If you actually studied economics, you would know that Roosevelt extended the depression, created artificial shortages and hurt the very people that could have brought about a recovery.

    And I speak with great authority on this, as the program actually bears my family name.

  25. HCAN Fan says:

    With the crash, GDP had fallen from $865 billion in ’29 to $635 billion in ’32.

    Roosevelt took office in ’33.

    GDP then rose steadily during his first two terms to reach $1 trillion in ’40.

    (besides a slight drop from $911 billion in ’37 to $879 billion in ’38.)

    And it kept on rising until 1942, all the while WWII not having started yet.

    So please explain how the war is the only thing that ended the Depression.

  26. HCAN Fan says:

    Okay, I misstated the date the war started. Of course the U.S. didn’t join until the end of ’41, but of course the war started in ’39.

    Regardless GDP had been on the rise from Roosevelt’s first year in office until the beginning of the war.

    http://www.NextNewDeal.org

  27. Doug Deal says:

    The US was attacked in December of 1941, and really did not enter in the war in any significant way until 1942. At least the economy was uneffect for 1941 by US entry.

    However, some of the economic turnaround would also come from the fact most of the rest of the industrial world was in a war back in the late 30’s.

    According to my research, GDP (adjusted for inflation) did not return to ’29 levels until ’39, and unemployment was closer to 20% than 10% until late 1940. What a Great Deal!

  28. HCAN Fan says:

    From US News & World Report:
    ………….
    In 1930, unemployment was at 8.7 percent, and it climbed to 24 percent in 1932 before declining to 15 percent by 1940. Jim Powell, author of FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression, asks, “There was expansion, but how come you still had average unemployment of 17 percent from 1933 to 1940?”

    One explanation is that in addition to the harm done by the restrictions imposed by the NRA, the “soak the rich” rhetoric coming from the Roosevelt administration had a chilling effect on economic growth by making people fear for their property rights. Who knows, maybe Uncle Sam would just start wholesale confiscation of the fortunes of America’s wealthy or the nationalization of industries—Americans were already observing that going on across the pond with the rise of communism in Russia and fascism in Europe. This uncertainty, along with a jump in the top federal income tax rate from 25 percent in 1931 to 79 percent in 1936, may have deterred investment.

    Whaples also points to the 1938 election, in which Democrats lost 72 seats in the House. While the Democrats retained majorities, these losses made it harder to pass their agenda and thus reduced the specter of “soak the rich” policies. “Investment almost immediately went up very strongly after [that election], now that people weren’t as worried about the New Dealers and threats to their property,” Whaples says.
    ……………..
    Note two things about this:

    1. NO ONE is talking about raising the top federal income tax ANYWHERE NEAR 79%.

    2. It was people’s PERCEPTION that the government would take their property — which didn’t actually happen — that chilled investment.

    From the same article:
    ………..
    Among other important New Deal measures were the relief projects, which came in the form of the Homeowners Loan Corp., which tried to reduce foreclosures by lowering mortgages (sound familiar?), and massive public-works projects intended to stimulate the economy by putting people to work. “Recovery was just one piece of the New Deal,” Rauchway says. “Relief was another piece, and by all accounts it worked pretty well. It kept people from starving.” He also notes that a decline in the relief programs was correlated with the downturn in 1938.
    ………….

    So it appears that putting people to work building infrastructure and helping the country actually did help the economy.

    Moreover,
    ……………
    What complicates the debate, however, is that the attempt to alleviate the Great Depression isn’t even the whole story of the New Deal. . . . Gavin Wright, an economic historian at Stanford University, . . . argues that the New Deal comes across much better if viewed in the light of the culmination of the efforts of the progressive movement. “The basics of the New Deal really set the terms of the social contract—reduction in inequality, status of labor unions, heavy investment in human capital and higher education.”
    ………………..

    I think that opposition to the New Deal and to government funding of social service programs tends to have more to do with a disagreement about whether government should help “the least of us,” rather than whether such programs hurt or harm the economy.

    You might argue that helping the economy helps all of us, and that’s why you oppose cuts in such programs, but Bush has created some of the most massive cuts in such programs, and deregulated almost everything, and unemployment is sky high and the economy’s in the toilet. So that argument doesn’t hold up.

    Do you really believe that everyone would prosper with fewer social service programs and no regulations, or is it just that you think that everyone should have to fend for themselves?

    Anyone else reading this, if you don’t think everyone should have to fend for themselves in hard times: http://www.NextNewDeal.org.

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