Great News! Obama to Impose New Fees on Energy Companies Who Can't Drill Anyway

While the permitorium remains in place, oil rigs continue to leave the Gulf of Mexico for lack of productive work to do. But never fear! Buried in the President’s budget proposal we find this gem.

The fiscal year 2012 White House budget proposal calls for new fees on oil-and-gas companies to help fund drilling oversight, which the Interior Department has expanded in the wake of the BP oil spill.

The plan unveiled Monday includes “user fees to oil companies for processing oil and gas drilling permits and inspecting operations on Federal lands and waters.” It also seeks changes to royalty rates and “establishing fees for new non-producing oil and gas leases (both onshore and offshore) to encourage more timely production.”

The Interior budget plan calls for beefing up the agency’s ability to regulate drillers, while extending an olive branch by noting that “these reforms will also facilitate the timely review of offshore oil and gas permits.”

Go back for a moment and read those two emphasized sections again. So the federal government is not issuing any new permits to speak of. But if you have an oil lease that you’re not producing on – because you don’t have a permit – we’re going to impose new fees to pay for the EPA to investigate whether or not you should get a permit. This is an olive branch to our energy companies? Perhaps if you fashioned the branch into a club.

Say… nice oil rig ya got there. Be a real shame if anything happened to it.”

And what precisely does it mean by saying these “reforms will also facilitate the timely review” of permit applications? It’s not very well written, but one might take from this the idea that you can either pay more or your application may remain “lost” in the stacks. At the very least some serious clarification of this is required.

This, of course, comes on top of the new $43.6 billion in taxes that the president seeks to impose on oil companies to pay for, “more money to research on solar, wind and energy-efficiency programs.” News of the proposed hikes brought a rapid response from API’s CEO Jack Gerard:

“It’s no surprise the administration is proposing yet again to raise taxes on the U.S. oil and natural gas industry. But it’s still a bad idea and comes at one of the worst times in our economic history. The administration continues to ignore the fact this industry is among the nation’s largest job creators and delivers enormous revenues to government at all levels. The industry pays income taxes, royalties and other fees totaling nearly $100 million every day and pays income tax at an effective rate far higher than most other industries.

“Besides eliminating thousands of new potential jobs, the increases, over the long term, would actually lower revenue to the government by many billions of dollars as a result of foregone revenues from projects the tax hikes would prevent going forward.

What’s that you say? We’re losing our ability to supply our own energy and job producing companies are bleeding out across the South? Oh, don’t concern yourself with that. LOOK! A SQUIRREL!

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