Message to Kaine - Tires are only useful with gas in the tank
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Published June 27th, 2008
Today, Governor Tim Kaine launched a huge fanfare as Good Year announced an expansion of its Danville plant, the world’s largest aircraft tire and medium radial truck tire manufacturing plant.
Why, then, has Kaine fought against drilling for our own American resources?
Virginia’s coast was spared today by Governor Tim Kaine (D) who rejected a plan to open up the state’s coast to offshore drilling. (Sierra Club 2006).
Governor, if you’re so proud of those Danville tire jobs, do something to keep them. Join the effort to let us find more oil off our shores!
I am in favor of increasing offshore drilling if it helps us in the midterm to solve the problem in the longterm. Heavy royalties on the finds to subsidize alternative energy.
Meanwhile I am intrigued that domsestic oil companies have not yet bothered to exploit the existing leases they have on onshore leases. Why should we give them additional leases, that they will not exploit, on top of existing leases, that they have not (past tense) exploited?
I am not in the game to help Exxon/Mobil attain maximum profitability by waiting to get it out of the ground when prices are better (peak oil). I am in favor of increasing domestic crude oil production in the short term while promoting alternative energy as the solution for the long term. Grant new leases? OK, bid on them with expiring rights.
When they bid they are expected to exploit the rights within a reasonable time. After the time expires they lose the lease and it is open to new, increased, bids.
Are you in favor of increased production or increased profits for Exxon/Mobil?
LittleDavid, do you honestly think the oil companies are sitting on areas that they think would be productive and purposely not getting the oil?
I’m for increased profits - PERIOD! See, in America, profits are a good thing. They create more jobs, more research, more technology.
But see, I’m consistent. I don’t cheer tire jobs while slamming the oil industry.
Brian,
It is my understanding that leases for oil exploration have been granted and not exploited.
What is your problem with that any new leases granted come with time limits?
Yes, I think oil companies might sit on proven reserves in light of peak oil. Due to peak oil, proven oil reserves will be worth more in the future then they are today. That is as long as we continue to give them perpetual leases.
Would they still have time limits if oil is found?
Brian,
You bet. If they found oil and kept it there instead of pumping it they lose. Do you have a problem with that?
I will admit that I am in favor of taxes/royalities on the pumping of the oil. We need to find a long term solution.
Yeah, i have a problem with it. What idiot would invest in the search for oil if they are forced to give it up? Now, I wouldn’t mind if they had a time limit once oil was found to start drilling, and once the oil is flowing, the lease remains theirs, but let’s be honest.
Lease details are NOT why the left is blocking deep sea drilling.
Brian,
But the problem is that existing leases have been granted without increased prodution. They are sitting on the reserves waiting for the price to go up.
If they are motivated to bid on the opened opportunity, they either get it out of the ground to help us or give it up to someone who will do so. The present market motivates them to sit on it because the price is only going to go up. Why shouldn’t American citizens gain from the increased price? If the oil comapanies are going to sit on the resources provided to them for increased profit, why shouldn’t we sit on it for our profit instead of theirs?
If we as a society want increased production, we need to understand market forces. Exxon/Mobil is motvated towards maximum profits not meeting the needs of society.
I’m glad to know that the Democratic Party wants oil companies to drill as soon as possible.
That’s news to the Democrats, but I’ll take your word for it that the only reason they oppose drilling is because they fear the oil companies won’t do it fast enough.
Undoubtedly there are some areas where oil companies may have leases but extraction and processing of the oil (not counting shale/sand oil) may have been financially non-viable with the prior bargain-basement oil prices. However, isn’t ironic that the very spike in prices that may make those previously (financially) inaccessible resources into viable reserves is now being used to justify access to potentially more easily accessible (ie profitable) reserves? Wasn’t cost of extraction historically one of the main reasons provided for non-use of some of the current leases?
The reality is that even if we open off-shore drilling that oil won’t come to market for 5 years or more. Not exactly a solution. All the oil companies’ really want is irrevocable access to be granted to more discounted U.S. Government owned oil. Oil that they can put in their back pockets until THEY decide to drill - not when it is in the best interests of the nation or the people.
What is really frustrating is that the President saw this coming 6 years ago - and did nothing. Imagine if he had started to work towards alternative energy or nuclear power 5 years ago where we would be today? Or if Reagan hadn’t dismantled President Carter’s alternative energy tax credits (along with the solar panels Carter put on the White House)? Gas might still be $1 a gallon b/c there simply wouldn’t be any demand - of course that begs the real question - why was it that these administrations wanted to ensure that the demand for oil didn’t decrease? What did Cheney discuss with the oil executives in creating our “energy policy” (which is working so well)? Is that profit BK, or market manipulation? What would T.R. think?
Ragnar, saying we don’t have “alternative energy” because of a lack of tax credits is like saying when the Democrats let child tax credits expire, there won’t be any more kids.
In all areas of energy, government IS the problem.
Meanwhile, 5 years is a blip on the radar screen compared to the window for “alternative energy” - besides, the second the US takes an aggressive change to developing their own oil, speculation reverses and prices drop.
And don’t blame the lack of progress on nuclear power on Reagan.
Despite your wanting to make all things political, in this case government’s outright ban on oil exploration is extremism. Government tax credits pale in power to the profit motive of the marketplace, and if a profit existed in developing more alternatives, they’d be developed no matter what little tax credit was in the tax code.
Great comments here!
It’s ironic that the pro drilling in the Atlantic OCS folks have countered the fact that there was historically found to be very little commercially viable reserves in the Atlantic, by saying that new drilling technology opens new reserves. But when it comes to reserves (mostly in the Gulf Coast) already leased and available for drilling, they turn back to the excuse that there isn’t enough that is commercially viable. Big oil is certainly desperate in the waning months of having oil men in the White House!
Incidentally, if production of any Atlantic offshore “energy resources” (what Thelma Drake likes to call gas and oil - she’s afraid to specifically say “oil” coz it contradicts Virginia’s wishes per its 2007 Virginia Energy Plan) started in 2011 (as proposed), it would not have a significant impact on production or prices until 2030. Starting in 2020, total natural gas production is projected to decline. Prices for drill ships/ rigs are about $500 million each, and currently there is a 5-year waiting list for new rigs.
Meanwhile, Delmarva Power and Bluewater Wind have just inked a deal, agreeing to produce/buy enough power to light 50,000 homes in Delaware for the next 25 years. It’s projected to come on line in 2012. The farm has room for expansion as other electricity buyers are found. Residential customers will see about $5 a month increase in their electric bills for their “Go Green!” clean energy. It’s hard to predict what cost or savings is realized as fossil fuel prices remain so volatile.
This project has been in the works for years, probably as long as Drake and Wagner having been campaigning to open Virginia’s coast to dirty, risky oil. All the while being supported by Big Oil who really don’t want access off Virginia - too little there! They want at other lower 48 states’ offshore reserves but they need that moratorium lifted. They crack it open using Virginia who they consider to be the “weakest link” thanks to Drake and Wagner, their little foot soldiers.
Not so my friend. Tax credits are government incentives to have corporations do what we desire them to do - i.e. those things which are to the greater benefit of the nation.
I blame Reagan for turning back to oil after Carter diligently tried to move away, I blame Bush/ Cheney for creating an energy policy that manipulated the market to encourage dependence on oil, including foreign oil, at a time when the President knew it was a dangerous foreign policy. Government has many responsibilities, among them is to ensure a robust economic enviroment - a healthy energy policy, one that encourages business is a natural aspect.
This is an area where government could have done more - besides since 2001 Bush has encouraged over $17,000,000,000 in tax credits for the oil industry - which is making record profits and has not benefited our people or economy. If credits are good for an established industry, with no benefit to the economy at-large, why not for areas of the economy which still need to grow to create that desired economic enviroment?
PS - there is no ban on oil exploration, there is only a limit in certain areas often for economic vice environmental reasons. Moreover, the oil industry has government permits to drill on federal land - with proven resources - which they are choosing not to utilize. Why?
Eileen, nice talking points. Congratulations on your job with the Sierra Club.
Ragnar, I know the point behind tax credits. I’ve just never bought into how effective they are. I don’t own a home because I get to deduct interest. I don’t have a daughter because of a tax credit.
And if you’d chose Carter’s energy record over Reagan’s, I’m going to sit back, laugh, and enjoy another debate loss for Ragnar. You’re bordering on lunacy if that’s your belief.
You also didn’t do these things because they would increase your quarterly financials. “People oriented” tax credits can obviously serve different purposes than “business oriented” ones. And if you think businesses don’t spend significant efforts on trying to squeeze every penny out of available tax credits and loopholes, you’re crazy.
But any business that pursues market-contrary investments simply for a tax credit I think is equally crazy.
Brian,
You once again (this is not the first time) tried to paint me as a Democrat. I am an independent.
Perhaps this exposes the reason for why Republicans have been losing elections recently. When conservatives where given power they said “My way or the highway.” Some of us, when faced with only these choices, jumped on the highway and found it routed us towards voting for Democratic candidates for office.
I’m still willing to vote for a Republican, however the candidate better not be a right wing extremist who is unwilling to compromise.
John McCain is not such an extremist (he has a proven track record of compromising) so thus far I am leaning towards voting for him for President.
of course you are…..
Brian,
Well, independents like me are the ones who decide who wins elections. Perhaps it is telling the independents like me are starting to vote for Democrats recently.
But of course the problem isn’t yours now is it? You are not forced to change. But if you do not change you are going to continue to lose elections. Loser.
Brilliant and mature as usual, little man
First off, there already is a time limit on leases. If you aren’t active with a lease, MMS takes it back by law already.
Second, over the past decade there have been more rigs in the U.S.. However, production has actually gone down (even with more rigs searching for stuff) b/c the leases that are available have small sources of oil and natural gas. So it’s taking more rigs to get less oil and natural gas.
Third, the last time MMS conducted any surveys outside of the Gulf was 30 years ago. Since they’ve conducted these surveys, 3-5 times more oil and natural gas have been taken from the Gulf than what MMS originally surveyed to be out there. So the known reserves surveyed off the coast back in the 1970s when the technology wasn’t as good are a fraction of what’s really out there.
Fourth, the exploration and production of oil and gas on and offshore in the U.S. is mostly done by innovative independent producers which offer good American jobs. So ironically, the policies that have been debated in Congress (and on this page) which would limit the producers’ abilities to explore and produce actually hurts the independent producers (not Exxon Mobile).
Last and this is never talked about, natural gas is priced by regional supply and demand. So the price of U.S. natural gas is determined by U.S. supply and U.S. demand. You can’t import the stuff (well, not easily). And guess what - the U.S. is using more of it (b/c it’s a clean burning fuel) and we’re not producing as much. As a result, the price has skyrocketed!! Normally during the summer when it’s usually really cheap, it’s bought and stored and then put on the market in the winter when people need it to heat their home. That allows the price to come down in the winter at this vulnerable time b/c of increasing the supply (remember ECON 101). However, b/c it’s so expensive now, that isn’t happening. Guess what’s going to happen to the poor when they need to heat their home this winter? And guess what’s happening to them now when they’re turning on (or not possibly) their AC which uses electricity generated by nat gas? And guess what happens to the social services organizations who can’t help as many people b/c the bills are so much higher. And guess what happens to just about every manufactured good here in the U.S. b/c they are derived from the methane in natural gas (hydrogen and carbon). That’s why Dow has now increased their prices twice in the past couple of months. That trickles down to about everything that’s manufactured in the U.S. Or they just pick up and move their operations to another country where the price is low which equals more lost good U.S. jobs.
Bottom line - we need to do everything. We need renewables, we need alternatives, we need conservation, we need efficiency, but we also need oil and natural gas. And we’ll continue to need them or we won’t ever be able to buy any manufactured goods that have a Made in the U.S. label.
CMD,
Thank you for providing your input. You seem to be more knowledgeable then most of us on this subject.