The Phony Energy Bill

Mountain Goat Report accuses Congressman Sali of merely voting against the Democrats Phony energy bill out of some loyalty to the oil companies. I think it’s far more complex than that. I’d encourage everyone to read Congressman John Campbell’s (R-CA) commentary on the bill:

Lack of Incentive: The bill allows offshore drilling, only for States that choose it, no closer than 50 miles from the coast, however it also prohibits revenue sharing of new oil and gas proceeds, thereby removing any incentive for States to “opt in” and allow drilling off their coasts. Nor does the bill offer any lawsuit protection, so companies that do search for oil will continue to be hampered with limitless litigation by environmental groups.

Reduces revenue: The Congressional Budget Office [CBO] has estimated the government could initially receive $5 billion in additional revenue without raising taxes by opening the OCS and allowing drilling in the Arctic National Wildlife Refuge [ANWR]. Yet this bill continues to limit drilling in the OCS.  According to CBO, it reduces revenue to the Treasury by $1 billion,

New Fees for Energy Companies: The bill raises $5.8 billion by imposing new fees on certain leases that currently pay no royalties. It also imposes $1.8 billion of new fees on non-producing Gulf of Mexico leases, and requires retroactive lease payments back to 1 October 2007 on certain leases.

Yeah, make energy companies pay royalties of $7.6 billion on leases that aren’t producing anything, that’s great policy. The Bill also includes a $2 billion earmark for New York State ( I know Walt Minnick would have supported his New York masters on that.)  It also places requirements for Freddie Mac and Fannie Mae to develop “loan products and flexible underwriting guidelines to facilitate a secondary market for energy- and location-efficient mortgages on low- and moderate-income housing. ” I think Freddie and Fannie have been flexible enough, thank you very much. If they were anymore flexible, they’d have been handing money out the door.

This illustrates one of the key reasons for the failure of Fannie Mae and Freddie Mac: government mandates that were placed on them and other lenders by the Democrats, and the Clinton Administration in particular.

Congressman Sali talked about other problems with the energy bill. Reading through MGR’s, you get the impression that he just voted against it because he thinks we need to consume more energy. I’d urge you to watch the full clip where he addresses several key problems with this phony legislation: