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Hillary Clinton's Dangerous Energy Policy Ideas
By Vladimir Posted in 2008 | Energy Policy | Windfall Profits Tax — Comments (24) / Email this page » / Leave a comment »
I caught a brief snippet of Hillary Clinton's recent interview with populist windbag Bill O'Reilly, and my blood began to boil. In the interview, Hillary staked out some energy policy positions that are not only wrongheaded, but dangerous.
1. The Windfall Profits Tax. Jimmy Carter's WPT had the veneer of legitimacy as it came along at a time when oil prices were transitioning out from under government controls. Now the rationale is much more straightforward: the oil companies make too much money. Note that the last time it was tried, the WPT was counterproductive: it reduced domestic production while increasing dependence on imports, exactly opposite what we should be doing now.
"And there is no basis for them to have these huge profits. They're not inventing anything new." The domestic oil and gas industry suffered from essentially flat prices from 1984 to 2004. During that time period total industry employment fell by half. Companies and fortunes were destroyed, and no one from the government rushed forward to make good their losses. Today's industry survivors have been through tough times, and that survival is attributable to their intelligent, innovative use of technology.
I defy anyone to name an industry with a better record for adapting and implementing advanced technology than the oil and gas exploration and production sectors. We routinely use technology today in ways that were mere daydreaming fantasy 30 years ago when I graduated college. Much of the demand for advanced supercomputers is for seismic processing. Horizontal drilling is now commonplace. One thousand feet of water was once an unimaginable threshhold; now wells are drilled in 10,000 feet of water, and there is production in 6,000 feet. There have been thousands of other new techniques and technologies, some incremental, but some groundbreaking in scope.
When you say we haven't invented anything, Senator Clinton, you lie. You lie.
2. "I would also change the law so that citizens and businesses could file anti-trust actions. We're going to begin to hold them accountable." Well, as good Democrats, we all know that lawyers are the answer to every single one of the world's problems.
Note that this remark is juxtaposed with the Senator's remarks about OPEC, but in that context they would make no sense. OPEC members are sovereign states. If there are trade sanctions to be taken against OPEC, that would be the job of the FTC or the State Department, not an anti-trust matter for private American citizens to pursue.
No, Senator Clinton must have been talking about turning the legal beagles out on American oil companies. Here's problem with that plan: the only phase of the industry that could possibly be considered to be concentrated in the hands of just a few companies is refining, a segment with historically low returns. Even now, the big refiners are not all that profitable because they all have to pay the world price for the barrels that enter their refineries, and none of them are self-sufficient in crude. They have to supplement their own production with barrels they buy from the smaller, non-integrated independent producers (who, by the way, drill 90% of domestic wells), and from foreign imports.
So what good would it do to break up the refiners? Exactly zero. But the trial lawyers would have a field day, and the oil companies would concentrate on legal defense instead of finding new supplies.
The O'Reilly/Clinton exchange on energy policy:
O'REILLY: OK. Oil prices. Now, you want us to suspend the federal gas tax. So does John McCain. Obama doesn't. But when I hear that, I say, it's the same old politician stuff, because the Democratic Party was opposed, is opposed to ANWR drilling. You voted against nuclear energy seven times. And I'm saying to myself, both parties, both parties have sold the folks out on energy. And now the folks are getting hammered and they should be angry at both parties. Where am I going wrong?
CLINTON: Well, here's what I think. I think there's plenty of blame to go around. We have not done what we should have done...
O'REILLY: Even for you?
CLINTON: ...for more — oh, for all of us, for everybody.
O'REILLY: OK. So you're taking some blame.
CLINTON: But consumers, drivers, political officials, the oil companies, you name it. We're not acting like Americans, Bill. We're not in charge. And I want to put us back in charge, and that's going to...
O'REILLY: OK, so you're going to change your votes on drilling and nukes?
CLINTON: Well, here's what I'm going to do, and I've said this very clearly. In the short term, I do want a gas tax holiday, but to pay for it by putting a windfall profits tax on the oil companies.
O'REILLY: What's that mean though?
CLINTON: Well, here's what...
O'REILLY: What does that mean?
CLINTON: Now look, what it means is that the oil companies have made out like bandits. You know that.
O'REILLY: Right. Record profits.
CLINTON: We all know that, right?
O'REILLY: Yes.
CLINTON: And there is no basis for them to have these huge profits. They're not inventing anything new.
O'REILLY: So, but what do you do? Take 20 percent of their profits away from them?
CLINTON: You set a baseline, and above that baseline you begin to tax their profits.
O'REILLY: So Congress has got to say yes to this.
CLINTON: Congress has got to say yes. Now, I know that's an uphill climb.
O'REILLY: You bet.
CLINTON: But I'm trying to lay the groundwork so that when I'm president we can get in there and say this has been going on way too long. I also want to take on OPEC. You know, OPEC is a cartel, it's a monopoly.
O'REILLY: You want to take them on?
CLINTON: Yes.
O'REILLY: They don't care what you say.
CLINTON: Well...
O'REILLY: They're in Saudi Arabia and Venezuela.
CLINTON: Nine of the 13 biggest oil-producing countries that are in OPEC are also members of the WTO. I would file complaints. I would also change the law so that citizens and businesses could file anti-trust actions. We're going to begin to hold them accountable.
O'REILLY: And then if you hold them accountable, they'll say we'll slap another $20 on the price of oil, so there.
CLINTON: Well, see, but at the same time, we're not going to be sitting idly by acting, you know, like we can just get away with this. We've got to change the way we behave, the way we drive. We have not paid attention for more than 35 years as to what's been happening to us.
O'REILLY: All right. And I'm with you 100 percent.
CLINTON: Good. Good.
O'REILLY: Your husband was president for eight years, and Al Gore, Mr. Global Warming, was vice president for eight years, and they didn't do bupkis about this.
CLINTON: Can I say that we got an elected president who's a fighter, who's going to take on the oil companies, going to take on the oil companies, and is going to say to Americans, you know, we've got to be really focused on how we're going to...
(CROSSTALK)
O'REILLY: All right. As long as you understand that I'm angry and so is everybody watching here, because both parties sold us out.
She seems to be failing
by simpson316
at her husband's philosophy of triangulation.
Whereas Bill was lauded for compromising, Hillary is getting blasted from both sides.
Now also found at The Minority Report
And if it isn't perfectly obvious she sidestepped nukes and drilling. They are both playing up evil oil companies.
It's like a scene from Atlas shrugged. Just when did the oil companies become slaves. Since when is their product ours for the taking ?
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
With either Hill or O'Bama...
by Vladimir
...you'll be able to tell your grandkids about the good ol' days of $115 oil.
There is more stupidity than hydrogen in the universe, and it has a longer shelf life. - Frank Zappa
Remember $22-$28 oil?
by Alan Charles
It was the year 2000, when one of our presidential candidates told us he could jawbone with the Iraqis to get oil prices down.http://www.google.com/search?hl=en&q=oil+prices+in+2000&btnG=Google+Search
blocked every energy initiative that President Bush has requested with the exception of expanding ethanol production. We REALLY need to look at more domestic drilling to get more supply online and we REALLY need to build some nukes to take some of the load off oil, natural gas and coal for electricity generation. We can then use those freed up fuels for motor vehicle fuel stocks. (Well coal gasification may still be too expensive, but natural gas powered vehicles are in use today and their use could be expanded.)
And yes these things will take 5 to 10 years to have an effect. But just think if the Democrats in congress had allowed them to happen in 2000. Things would be different now.
Socialism doesn't work. It looks nice on paper, but it's been tried and it's failed miserably every time (usually accompanied by widespread death and suffering).
Proud member of the V.R.W.C.
I guess our recollections are different, BrianH because of
by Alan Charles
how we have approached the Bush presidency. I always like to google things to see the differences-of-opinion available, depending on who wrote the opinion.
http://www.google.com/search?hl=en&q=bush+and+congress&btnG=Google+Searc...
Bush and congress gets you millions of irrelevant hits. And using the first few pages of google hits to form an opinion on anything political will almost always get you a somewhat leftish spin.
I prefer to actually find out the facts before forming my own opinion rather than relying on other people's opinions I find on google. Different style of reasoning I guess.
Socialism doesn't work. It looks nice on paper, but it's been tried and it's failed miserably every time (usually accompanied by widespread death and suffering).
Proud member of the V.R.W.C.
Just Google "Miserable Failure"
by Vladimir
Google proves Bush is an idiot.
Q.E.D.
Bush alone, among all politicians, failed to foresee the events of 9/11/2001 and the changes they would have on our lives.
Bushlied! Bushlied! when he said he'd work with the Saudis.
Google proves it.
There is more stupidity than hydrogen in the universe, and it has a longer shelf life. - Frank Zappa
5! <nt>
by BrianH
Socialism doesn't work. It looks nice on paper, but it's been tried and it's failed miserably every time (usually accompanied by widespread death and suffering).
Proud member of the V.R.W.C.
I also remember the Energy Policy Act of 2007.
by Repair Man Jack
What was that price per gallon, Nancy?
"I believe we must adjourn this meeting to some other place." - The last recorded words of Adam Smith.
...with CAFE standards, ethanol mandates and compact fluorescent light bulbs?
There is more stupidity than hydrogen in the universe, and it has a longer shelf life. - Frank Zappa
And made it so that the price of our corn flakes doubled!<nt>
by Repair Man Jack
"I believe we must adjourn this meeting to some other place." - The last recorded words of Adam Smith.
I think that if...
by dennism
...we are going to burn food (ehtanol), that we should also burn shelter and clothing. And even though the supplies of shelter and clothing seem inexhaustible, we can hedge our bets by putting scientists to work to find some way of burning water. Except for the water off Nantucket.
It's called a giant white elephant hydrogen fusion
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
yeah but I heard
by kyle8
on Art Bell, that there was this substance that would turn water into gasoline, but it was bought by the oil companies, along with the perpetual motion machine and the 50 mph carburetor, and then they killed the guy, and buried the plans in area 51.
"Nothing works like freedom, Nothing succeeds like liberty"
Kyle
I recall attending an energy seminar in th 1990's, where the Goldman Sachs people said the long-term direction of energy prices was UUUUPPPP.
It took a while for this to come true, but it has. Oil prices have risen sharply throughout this decade, first on fundamentals (increased global demand), then on currency factors (declining value of USD0 and most lately (IMO) on rampant speculation in the commodities markets.
Oil prices spiked below $10 in 1999...
by Vladimir
..."Ah, yes, I remember it well."
The Clintons took advantage of the price runup in 2000 to the $28 range to raid the Strategic Petroleum Reserve & attempt to reward some Operation PUSH buddies with a $10 million windfall (each).
There is more stupidity than hydrogen in the universe, and it has a longer shelf life. - Frank Zappa
I like your explanation of this better, streetwise
by Alan Charles
and it falls right in line with what the Cato Institute has online about it. http://www.cato.org/pub_display.php?pub_id=3947
It Looks To Me
by youthgrunt
like the biggest oil operations use the refining end of the business ("downstream operations") as a hedge against profitability of their crude oil gathering business ("upstream operations"). The first quarter Exxon Mobile numbers showed bad performance from refining, but better numbers from oil--as expected. This can easily flip-flop.
So, divesting the two operations would generally ensure that one of the two would be performing badly all the time. Which, of course, is probably what she would be after...
Oil at 28 buck per barrell....
by Volunteer
Volunteer
As an Old Michigander, pumping gas for 28 CENTS a gallon as a teen ager, I recall the days of filling up for 1.50 dollars. This was enough to run for a week.
I also recall, no tv, outside toilets, minimal electricity in the house, a telephone system with multiple folks on line, no computers, no internet, nothing except chores, work and snow.
Oil may be high as the sky, unaffordable, and the days of cheap fuel gone forever, but we live in a much beter standard of qualilty than ever.
The days of Rikects ( a diet disease ) in Mississippi are gone, the segregated water fountains and toilets of Memphis are gone, the 2 Lane death traps of federal highways are mostly gone, the Autos of Detroit that were unsafe are gone, and the list goes on.
I don't care for the Liberal Left and the idealogues that promote chaos, anarchy and Environmentalists that would have me and mine live in mud huts while they drive Lear Jets. NO WAY.
BUT I am realistic enough to give credit where credit is due. The Idealists, coupled with the Pragmatists (sic) and the Can Do spirit of the USA Corporations have given the USA one H... of a better way of getting thru our days.
end
Hillary's Energy Policies Per Se...
by Volunteer
Volunteer
I watched the Interview, was impressed, but took the details with a grain of salt.
1. Any energy policy promoted by Hillary and actually written down for Legislation, IF and When she wins, will be a result of the influential Mr. George Soros. His OSI and Hedge funds will have to benefit first and foremost.
2. While the interview does give one an insight into the workings of the candidate's economic mindset, it in no way is the end result of the candidates final legislative efforts.
3. We have a very complex economic world in the USA. Oil and energy economics drive every facet of our lives. You buy too much gas, and the price of beans goes up or down. Interwoven processes coupled with our just in time production processes make for a very tipsy house of cards.
4. Interviews are for the minute. I would not take them too seriously.
end
Obama's energy plan is worse than Hillary's
by St. Louis Conservative
He wants a windfall profits tax on every barrel of oil sold over $80/barrel. I believe it's somewhere in the neighborhood of $15 billion/year in taxes. I can already see the gas lines.
“.....women and minorities hardest hit”
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but I think she knows exactly what she's doing, so your use of 'dangerous' is apt.
What I didn't get is that she would go along with McCain on the tax holiday, but then slap a WPT on the oil companies, who would then just have to raise prices and consumers would pay anyways.
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