Nothing succeeds like success. Unless, of course, you’re the Obama administration. The success of hydraulic fracturing — “fracking” — for the purpose of oil production in the U.S. has been nothing short of spectacular. Oil is flowing as freely as 99-cent margaritas at Stations Casinos. And, believe it or not, after decades of dependence on foreign oil, that is causing a huge problem.
“Oil is overflowing U.S. storage facilities partly because of the 40-year-old export ban,” explained Holman Jenkins in a recent Wall Street Journal column. “The wave of bankruptcies and layoffs that many have predicted for the U.S. energy sector may finally be coming, but less because of the distressed price of oil than because producers will have to stop producing if they have nowhere to send their output.”
That’s right. After years of sky-high prices and American motorists being held hostage by Middle East oil barons, U.S. energy companies are unable, by law, to export oil which would raise tax revenue without raising taxes and lower unemployment without lowering wages. Indeed, as Bill Loveless reports in USA Today, the U.S. has reduced its oil imports from 60 percent to 27 percent since 2005, and two-thirds of what we still import comes from our neighbors and friendly partners, Canada and Mexico. That’s a good thing. But as Loveless explains, without getting too technical, what the U.S. is producing today is “light sweet” crude while many of our refineries in the Gulf Coast are set up to refine “heavy sour” crude, like that produced by Mexico and Venezuela. That means it’s necessary for the U.S. to continue to import some heavy crude, which also means we’re producing a surplus of light crude.
The solution, of course, is to repeal the ban on the export of America’s light crude oil which, as Loveless explains, was “enacted by Congress in response to the Arab oil embargo, supply shortages and gasoline lines” from four decades ago.
“There would be major benefits from crude oil exports,” maintains Ryan Lance, CEO of Conoco Phillips. “In the world market, light oil sells for more than heavy oil. So the U.S. would gain by exporting our surplus light oil, and then importing the less expensive heavy oil that our refineries are built to handle.” One of those major benefits would be cheaper gas prices at the pumps, a gift from the heavens for motorists who also happen to be voters. Hello?
“The law banning crude oil exports prevents crude oil producers in the U.S. from participating in free trade of a commodity that is traded worldwide,” declares Alex Mills of the Texas Alliance of Energy Producers. “It should be lifted or we will likely see the oversupply of crude oil continue to grow and drive prices below costs for a large number of producers.”
“Prices below costs” sounds good on the surface. But in reality this means the business is losing money. And businesses that lose money go out of business which means those businesses no longer generate tax revenue and no longer employ workers who then start costing taxpayers money instead of paying taxes. Indeed, Meagan Parris of Chem.info reports that “According to an estimate by the Federal Reserve Bank in Dallas, Texas alone could lose 140,000 jobs in the next year as the slowdown in oil production impacts the state’s entire economy.”
The export ban maybe made sense in the 1970s. No longer so. It’s time for President Obama to push for its repeal. It’s what’s best for business and it’s what’s best for America.
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LOOK OUT TAXPAYERS, HERE COME THE REPUBLICANS! It wasn’t supposed to be like this. When Republicans won the Governor’s office, as well as control of the State Senate and the State Assembly last November, Nevada taxpayers
were supposed to be safe. At least for this one session. Indeed, for this one session — the first time the GOP has held all
three lawmaking arms in 86 long years — you’d think the biennial rite of taxpayer pick-pocketing would at least be temporarily suspended and Republicans would get down to the hard but essential work of cutting non-essential spending.
Alas, Republicans never blow an opportunity to blow an opportunity. In just the first month of the 2015 legislative session, Republicans have already voted four separate times in favor of a tax hike — and they’re just getting warmed up. Grab your wallets and head for the hills!
Republicans in the Senate voted unanimously to bypass the people who originally voted for 10-year property tax hikes for schools and automatically extend those tax hikes for an additional 10 years (SB119). This tax hike would transfer billions from homeowners’ pockets to the government.
Republicans initially sweetened this bitter tax hike with a provision banning the cost-inflating union welfare program known as “prevailing wage” for school construction projects. As such, the bill passed with no Democrat votes. However, some conservative Republicans in the Assembly opposed this massive tax hike even with the spoonful of prevailing wage sugar added. So the GOP-led Senate introduced a new “emergency” bill (SB207) which kept the tax hike but removed the prevailing wage prohibition. The new “clean” tax hike bill also passed, picking up the ten Democrats in the Senate but losing four of the eleven Republicans.
With the prevailing wage provision removed, the stripped down tax hike easily picked up all seventeen Democrats in the Assembly, as well as, unbelievably, ten Republicans, including two — Speaker John Hambrick and Assemblywoman Victoria Seaman — who signed the Taxpayer Protection Pledge promising their constituents they would “oppose and vote against any and all efforts to increase taxes.”
Then, just days after sticking it to property owners, Republicans in the Assembly stuck it to hunters — one of their most loyal constituencies — by doubling the tax on elk hunting “tags.” Only two Republicans — Assemblywoman Shelly Shelton and Assemblyman John Moore — voted against the Elk Tax (Assemblywoman Michele Fiore was absent, but would have voted “no”), which now moves to the GOP-controlled Senate where it will surely pass and be signed by the governor. So after just four weeks of being back in charge after being out in the legislative wilderness for so many decades, the uncontrolled tax-and-spend urges traditionally exhibited by Democrats in the past are really not much different from the tax-and-spend urges now being exhibited by Republicans.
The GOP never blows an opportunity to blow an opportunity. Chuck Muth is president of Citizen Outreach, a non-profit public policy grassroots advocacy organization. He may be reached by email at firstname.lastname@example.org.