Scott Spiegel

Obama doesn’t want to increase taxes on oil companies because it will bring down the price of gas.  He wants to increase them because it will raise the price of gas.

This week the House will vote on whether to expand offshore drilling and eliminate red tape needed to get drilling permits approved.  Democrats also hope to vote on whether to end billions of dollars in tax breaks to oil companies.

The media have been happy to do Obama’s bidding by referring to the tax breaks as “subsidies”—as though U.S. Treasury officials were riding around the country in an armored van handing out satchels of gold to Exxon Mobil, Chevron, and ConocoPhilips executives.

In fact, we’re talking about reducing the gargantuan taxes these companies pay for the sin of drilling for oil and making it widely available to a country that uses it in every daily setting and is dangerously dependent on Middle Eastern imports.

Since oil companies are likely to pass the cost of increased taxation on to consumers in the form of higher gas prices, the Democrats’ plan will, as usual, do nothing to solve the underlying problem, make things worse, and give greater influence to the federal government.  Mission accomplished!

Ending tax breaks for oil companies is the closest Democrats can get to imposing an outright gasoline tax, which they know is politically impossible during a recession.

To be fair, oil companies might not pass the entire added cost on to consumers—they might cut back on hiring, reduce wages, or otherwise trim their workforces.  Such actions will no doubt be wondrously helpful for the high unemployment rate.

Obama also recently announced the formation of a Justice Department task force to scrutinize whether oil companies are “manipulating” prices in collusion with oil speculators.

As high as gas prices are, there are many factors that have conspired to increase them, none having anything to do with the sudden greed of oil companies or the rampant fraud of speculators.

There’s the little matter of a dozen or so uprisings in oil-rich Middle Eastern nations over the past four months, which have elevated uncertainty regarding oil production and regime change in the region.

There’s the declining value of the U.S. dollar, due to Democrats’ hyperactive spending orgies, which has increased the price of imported oil.

There are seasonal differences in gas prices, many induced by onerous federal regulations.  For example, many states force gas companies to sell purer, more expensive blends during the summer, when a disproportionate amount of driving is done.  Not only does this directly raise gas prices all summer, it indirectly raises them in the spring by temporarily making gasoline scarce, since refineries must halt production while they shift their operations to the summer plan.

Then there’s the administration’s relentless, premature, taxpayer-subsidized push for unprofitable “green” energy, which makes prices higher for everyone, with no concomitant increase in fuel quality or reliability.

Both political parties insanely continue to support the production of biofuels such as ethanol, a program that does nothing but increase food prices, raise the cost of automobiles and fuel, and (if you care about such things) boost carbon dioxide emissions.

In addition to arbitrarily increasing automobile fuel efficiency standards to levels that are not cost-effective given current technological developments—which forces car companies to cut corners on performance to comply with the law—the Obama administration has twice defied a federal judge’s orders to lift the moratorium on drilling in the Gulf after the BP oil spill.  He continues to oppose drilling in the Alaska National Wildlife Refuge, off the coast of Virginia, and just about every place else where there’s oil.

Obama’s Environmental Protection Agency is doing its best to initiate creative new methods of preventing oil and natural gas drilling.  For example, the EPA recently proposed adding the sand dune lizard to its list of endangered species, thus greatly hindering oil exploration in the Texan/New Mexican Permian Basin, the second-most bountiful gas and oil field in the country.

But all of this should be good news to Obama, he of the “Electricity rates would necessarily skyrocket” and “If somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them” statements on the consequences of cap-and-trade restrictions.  Though he would never publicly admit it, $10-a-gallon, European-level gas prices are the apotheosis of Obama’s environmental plan for this country.

Don’t believe it?  Check out the statement his energy secretary, Steven Chu, made to the Wall Street Journal shortly before Obama’s election: “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”  His Secretary of the Interior, Ken Salazar, once famously said that he would refuse to allow expanded offshore drilling even if the price of gas rose to $10 a gallon.

But Democrats need not fear that high gas prices will reduce Obama’s reelection prospects.  If Obama takes action that a gullible public perceives as tough on oil companies, yet gas prices rise anyway, he’ll just claim that he tried his level best to rein in Big Oil, but the behemoth was simply too big to wrestle to the ground.



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