A "running tally" of the war. In real time.
“Cost of Iraq war could surpass $1 trillion
Estimates vary, but all agree price is far higher than initially expected”
NINE TRILLION DOLLARS IN DEBT.
OIL & GAS SUBSIDIES: $6 BILLION
Allows “geological and geophysical” costs associated with oil exploration to be written off faster than present law, costing taxpayers over $1.266 billion from 2007-2015. The provision claims to raise $292 million from 2005-06, and cost taxpayers $1.266 billion from 2007-2015. It originated in the House (there was no such provision in the original Senate bill). Record-high oil prices should provide a sufficient incentive for oil companies like ExxonMobil to drill for more oil without this huge new tax break.
Allows owners of oil refineries to expense 50% of the costs of equipment used to increase the refinery’s capacity by at least 5%, costing taxpayers $842 million from 2006-11 (the estimate claims the provision will actually raise $436 million from 2012-15). This provision was added by the Senate. Record high prices for oil and gasoline, and record profits by refiners like ExxonMobil and Valero should provide all the incentive needed to expand refinery capacity without this huge tax break.
This tax break allows natural gas companies to save $1.035 billion by depreciating their property at a much faster rate. This tax break makes no economic sense, as natural gas prices remain at record high levels, and these high prices—not tax breaks—should be all the incentive the industry needs to invest in gathering and distribution lines.
Allows oil companies drilling on public land to pay taxpayers in oil rather than in cash.
Waives royalty payments for drilling for some natural gas in the Gulf of Mexico.
Waives royalty payments for drilling in offshore Alaska.
Waives royalty payments for gas hydrate extraction on the Outer Continental Shelf and public land in Alaska.
Allows oil companies drilling in federal land off the coast of a particular state to pay the state 44 cents of every dollar it would have paid to the federal government for the privilege of drilling on federal land.
The royalty-in-kind provisions in this section allow corporations drilling for oil on public land to forgo paying cash royalties to taxpayers. Instead, companies provide an amount of the oil as an in-kind contribution to the federal government. Since federal land supplies one-third of the oil and gas produced in the United States, expansion of this program could have a significant impact on the federal treasury.
This proposal has its origins in Bush’s National Energy Policy, which requested that the Secretary of the Interior “explore opportunities for royalty reductions.”
A recent Government Accountability Office (GAO) report, however, criticizes the current royalty-in-kind program, concluding that the government is unable to determine whether taxpayers receive a fair shake from the program. For example, the GAO notes that the pilot program currently “relies upon royalty payors to self-report the amount of oil and gas they produce, the value of this oil and gas, and the cost of transportation and processing that they deduct from royalty payments” (emphasis added). The reporting system caused the GAO to express concern about “the accuracy and reliability of these data.”
Indeed, the industry’s cheerleading for the royalty in-kind program stems from recent court decisions that found U.S. oil companies, equipped with an “honor system” self-reporting system, routinely underreported the volume of oil and natural gas removed from taxpayer land, therefore allowing the companies to cheat the public. By seeking to end cash payments for the privilege of drilling on public land altogether, it appears as though the oil companies are attempting to hedge their losses from the embarrassing court decisions.
In 1998, the Mineral Management Service estimated that similar provisions would cost taxpayers between $140 million and $367 million every year.
There was a vote on April 21 in the House to strike the section providing a suspension of royalty payments for offshore oil and gas production in the Outer Continental Shelf (OCS) in the Gulf of Mexico, but it failed, 227 to 203.
Title IX, Subtitle J
This section would provide $1.5 billion in direct payments to oil and natural gas corporations to drill in deepwater wells. This section is a pet project of Texas Republican and House Majority Leader Tom DeLay. It would designate a private entity, Sugar Land-based Texas Energy Center, as the “program consortium” to dole out taxpayer money to corporations. The Texas Energy Center has strong ties to Tom DeLay, with six different executives (Herbert W. Appel, Jr., Robert C. Brown, III, Philip E. Lewis, Thomas Moccia, Ronald E. Oligney, and Barry Ashlin Williamson) giving a total of $8,000 to DeLay’s campaign since March 2004. In addition, three of the Center’s executives have given a total of $4,500 to President Bush’s 2004 re-election effort.
The Center’s lobbyist is Barry Ashlin Williamson. In 1988, Williamson went to work for the Reagan administration and became principal advisor to the U.S. Secretary of Energy in the creation and formulation of a national energy policy. President George H.W. Bush later chose him to be the U.S. Department Interior’s Director of the Minerals Management Service, which managed oil and gas exploration and production on the nation’s 1.4 billion-acre continent shelf. Williamson then served as Chairman of the Texas Railroad Commission from January 1993 to November 1995.
The Texas Energy Center will play host to The Research Partnership to Secure Energy for America, whose members include Halliburton and Marathon Oil.
· 1 decade ago