A Siegel posted an informative diary on Tuesday, but it was lost amidst the North Carolina/Indiana primary results. 28 members of the House have banded together to oppose the Clinton/McCain plan for a gas tax holiday. A 29th, Rep. Mark Udall (running for Senate in Colorado) has issued his own statement:
Senator Clinton claimed yesterday that I either stand with her on this proposal or stand with the oil companies. To that I say: I stand with the families of Colorado, who aren't looking for bumper sticker fixes that don't fix anything, but for meaningful change that brings real relief and a new direction for our energy policy. We can't afford more Washington-style pandering while families keep getting squeezed.
Since Hillary's still campaigning on this hare-brained scheme, it's worth looking into related energy policy a little. There's some Clinton-era oil revenue issues worth revisiting. We might find better sources for revenue from the oil companies there than the "windfall profits" tax Hillary has put forth.
But first: My other beef on Bill Clinton's energy policy? Obama reminds us that there's been no upgrade of vehicle fuel efficiency standards for thirty years. This is another thing the Clintons don't like to hear mentioned, because they didn't do much about it when they had the chance. Yeah, I know there was a Republican Congress. But not for the first two years. That was something that should have been tackled right up front. But perhaps they didn't want to get into a confrontation with John Dingell, who has hurt the Detroit auto industry by protecting them from increasing efficiency standards. My gut feeling, then and now, is that it simply wasn't of much interest to the Clinton Administration.
Jimmy Carter had a very forward-looking energy policy. If only it had stayed in place for the past 30 years, the world would be in much better shape than we find it in today. When it comes to energy policy, Al Gore would certainly be the best President. Richardson was better than the candidates who emerged as front runners. (Ditto on related public lands issues.) And Obama's better than Hillary - particularly when you take the actions of the Clinton stint in the White House into account.
Superdelegates step up to the plate
Mark Udall, along with the two other House members who are running for the Senate now (his cousin Tom Udall in New Mexico, and Tom Allen in Maine) have to date remained neutral in the Presidential race. I think they are especially sensitive to divisions in their state parties, and have much to lose if resentments linger for the general election in the fall. Be that as it may, Udall has now issued a public statement in direct opposition to Hillary's recent gas tax pander.
In addition to Udall, 28 other House members (list at end of diary) have banded together to a similar purpose. Of this group, only one is an undeclared superdelegate - Pete Stark (CA-13). The rest are for Obama, and it looks like they've got his back on this one. When this notice went up, DeFazio (OR) was undeclared, too, but he announced yesterday. Perhaps Stark's name will join the Obama column soon? From the website of Rep. George Miller (CA-7):
In response to this serious and long-term policy challenge, Sens. John McCain (R-AZ) and Hillary Clinton (D-NY) have proposed suspending the $0.18/gallon federal gas tax for the summer. We are strongly opposed to this short-term and counterproductive response, for several reasons.
They list three, and I have added a fourth from Udall:
- Proposal will drain funds from Highway Trust Fund, with bad results for employment and the nation's infrastructure
- No guarantee that oil companies would pass savings along to the consumer
- Congress's ongoing work is to increase fuel efficiency, develop alternative fuels and so on - that's the way to go.
- Moratorium on purchases for strategic oil reserve will ease pressure on prices
Hillary's proposing an "excess profits" tax. With eye-popping record billions on profits reported each quarter, it does seem reasonable to expect Big Oil to chip more into the national treasury. Except the nation already is losing out on billions in oil royalties due to actions of the Bureau of Land Management's Minerals Management Service under Bill Clinton in the 1990s.
The Royalty Relief Program
Back in 1998, oil prices were less than a third of what they are now. And something called Royalty Relief was put in place. It's goal was to provide incentive for additional exploration, by waiving royalty payments when the price of gas was low. Above a threshold price per barrel, $60 or so, royalty payments were supposed to kick in. Except, somehow, the New Orleans office of MMS (covering offshore drilling in the Gulf of Mexico) "mistakenly" entered a bunch of leases that left that $60 per barrel cap off. So now, a bunch of leases are still in place where with oil at $120 per barrel, this oil from the commons is being pumped and sold with ZERO royalties being paid on it.
Editorial from 2/21/06 Baltimore Sun (sorry, no link available any more):
Much of official Washington seemed shocked to learn last week that the federal government expects to forgo $7 billion in royalties over the next five years from gas and oil drilling off the Gulf Coast at a time when the energy industry is making record profits.
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House Republicans, with no interference from the White House, blocked an attempt last year by Massachusetts Democrat Rep. Edward J. Markey to suspend the royalty relief program when prices rise. What's more, there's nothing to stop Congress from suspending the program now. And that's exactly what lawmakers should do. This $7 billion is like found money. The social programs squeezed in Mr. Bush's budget could put it to far better use than further fattening the bottom lines of profit-rich companies such as Exxon Mobil. A particularly appropriate use for royalties earned from mostly deepwater drilling in the Gulf of Mexico would be restoration of the coastline damaged by Hurricanes Katrina and Rita.
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Some energy companies are balking at paying royalties even in these flush times. Mr. Markey's legislation suspending the relief program was designed to avoid legal challenges by requiring the drilling leases to be renegotiated. If Mr. Bush and Congress are truly opposed to extending charity to a wealthy industry at the same time taxpayers are struggling with pump prices and federal programs for the poor are on the chopping block, the royalty relief program should be promptly scrapped.
I diaried about this at the time, when Richard Pombo was still running the House Resources Committee. The Bush Administration said that it would be wrong to violate contracts entered, so nothing could be done about it. Nice to know something is sacred to them (contracts!), even if stuff like habeas corpus and the U.S. Constitution and Bill of Rights are not!!! And to this day, there's a lot of oil being pumped with no royalties being paid - despite record prices being set practically every week nowadays.
So, Hillary's a working class hero? Looking out for us common folk? Who "gets" what's up in America?
[A]ll Hillary Clinton has left is giving people another month of reasons not to vote for the black guy. She thinks she still has that going for her, along with the cockeyed notion that somebody who can loan herself more than $11 million to keep running for President is more of a working-class hero than Norma Rae.
I don't buy it. I think this gas tax holiday is just a talking point, a pander she's grasped onto in the far-fetched hope that it will benefit her campaign. It doesn't seem like it's helped her a whole lot, and I'm glad for that. And I don't see how windfall profits has as much merit as going after the royalties given away during the Clinton Administration. The latter would be easier to put in place, too. Just block any company with these royalty-free leases from bidding on any new ones until the old ones are renegotiated. It might not take much more than that. There's a royalty policy already in place, so it only has to be extended to the leases where it was left out.
But Hillary isn't likely to point to a mega-billions "mistake" on her husband's watch as the appropriate source for picking up revenues from the obscene profit levels of the oil companies. And when you tax "profits" there's plenty of games the accountants can play to minimize the effect. Royalties collect revenue on the basis of resources extracted from the public domain (oil, gas and coal from offshore and public lands and split-estate private lands) used for the profit of private companies. It is beyond reasonable for the public treasury to have a share in those profits for depletion of public resources.
Back in 2006, when this story came to light (in the New York Times), Republicans scrambled to cover their asses about it. Like the Bush Administration, the Republican Congress didn't want to force the oil companies to step up to the plate on revenues. Pombo announced he would hold hearings about it (as the NYT reported 2/16/06):
Mr. Pombo made it clear that a primary purpose of his investigation was to attribute much of the problem to decisions by the Clinton administration to sweeten the incentives in 1998 and 1999.
With a Democratic President & Congress, it will be time to rectify this problem, and start charging royalties. Oh, and there's another problem about oil royalties, even where they are being paid. The Interior Department quit their audit program and went over to an "honor system" (NYT, 3/1/06).
The changes have drawn protests from several oil-producing states and American Indian tribes, which receive a share of the royalties energy companies pay the federal government for oil and gas produced on public lands. Those royalties have risen much more slowly then prices for oil and gas, which reach record highs last year, and are expected to remain high for several years.
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But in a letter last week to House members, a group of state and tribal auditors said that the Interior Department had cut back on audits in favor of a much looser approach known as "compliance review" that could miss many instances of cheating. "Compliance reviews do not involve getting underneath the reported information to look at company's books," wrote Lisa Dockter, chairwoman of the Association of State and Tribal Auditors. As a result, she said, the government would not be able to confirm whether a company's report was accurate.
So, we need to get the auditors in the Interior Department back up to speed. Minerals Management Service is one of the biggest revenue centers in the federal government. It is perhaps worth mentioning (and should surprise no one) that MMS has been closely tied with Cheney during the Bush II regime.) There's also been some kickback schemes come to light, defrauding the feds of royalty payments. Denver Post, 2/6/06:
Jack Grynberg is a Colorado oil tycoon who's made a small fortune off suing other energy companies. But the multimillion-dollar settlements Grynberg has been able to extract from companies over the past 30 years pale next to what he stands to gain if he can win 73 lawsuits he has pending in Casper. Those lawsuits accuse more than 300 energy companies of defrauding the federal government of an estimated $30 billion in mineral royalties.
Side Note: And, as it happens, some hard core Republican western ranchers have been rethinking their allegiances when it comes to energy policy, too. Pete McCloskey introduced me to this lady:
I had no idea of the controversy surrounding natural gas extraction until 2002, when I learned that a rancher’s wife named Tweeti Blancett had locked the gate to her ranch to protest the practices of the energy companies that operated on her family’s grazing land. While there had been wells on the Blancetts’ 32,000-acre ranch — 95 percent of it is federal land, on which the family holds an exclusive grazing permit — for 50 years, the coalbed drilling spree of the last 15 has threatened the very existence of her family’s business. Unsecured holding ponds and leaking, polluted water poisoned their cows, and the tangle of roads and pipelines on her ranch killed forage grass and spread noxious weeds. Blancett, who had served as a local campaign coordinator for George Bush in the 2000 presidential election, soon became an icon of the struggle between the locals and the energy companies — a lifelong Republican transformed by the drilling rigs into an outspoken opponent of the Bush administration’s energy policies.
A well-thought out energy plan, and some real controls on the drilling spree that Bush-Cheney have set loose, can help with people like this in the west, where solar and wind are sensible sources for energy anyhow. And I definitely see people such as this crossing over to the new guy, rather than looking backwards to the Clintons. (In case there's any undeclared superdelegates reading this diary...)
Here's a list of the 28 who have organized and united to oppose Hillary's (& McCain's) gas tax holiday proposal. I've seen no signs of similar support welling up for Clinton or McCain on this issue.
- George Miller (CA)
- Xavier Becerra (CA)
- Lois Capps (CA)
- Anna Eshoo (CA)
- Barbara Lee (CA)
- Zoe Lofgren (CA)
- Pete Stark (CA) - undeclared
- Rosa DeLauro (CT)
- John Larson (CT)
- Hank Johnson (GA)
- Neil Abercrombie (HI)
- David Loebsack (IA)
- Jan Schakowsky (IL)
- Michael Capuano (MA)
- Wm. Lacy Clay (MO)
- Paul Hodes (NH)
- Carol Shea-Porter (NH)
- Melvin Watt (NC)
- Earl Blumenauer (OR)
- Peter DeFazio (OR)
- David Wu (OR)
- Steve Cohen (TN)
- Eddie Bernice Johnson (TX)
- Lloyd Doggett (TX)
- Robert Scott (VA)
- Ron Kind (WI)
- Gwen Moore (WI)
- Nick Rahall (WV)
This afternoon, Rachel Maddow and David Gregory have been discussing why superdelegates have not "banded together". Looks like in this case they have, but on a policy question rather than new endorsements. Personally, I think this is a good sign, and wish it was getting a little more media attention. The Hillary Death Watch is the media narrative du jour, but this is a superdelegate angle that deserves a bit more attention than it's gotten so far.