Action required now

Politics
1

Approximately 1 million oil and gas workers have now lost their jobs over the past 18 months. This needs to be reversed immediately.

The price of oil is being artificially depressed by OPEC countries and others. Saudi Arabia is the primary enemy of US oil domestic production.

The United States government needs to support domestic oil and gas exploration as a matter of obvious national security and other reasons which I will enumerate below.

My proposal is the United States government immediately impose an import tariff on all imported oil equal to the difference between $65 and the current crude oil spot price for West Texas Intermediate.

The following are the positive results of our government supporting domestic production in this way.

1. At current pricing, the federal government will collect approximately $35 per barrel for every barrel of imported oil. This would certainly help offset the dollars that we are currently spending in the Mid East to keep those foreign supplies of oil in production.

2. This will allow domestic production pricing to be elevated at a point close to the value of the imported oil including the tariff.

3. This will allow the federal government to also collect a higher royalty amount on federal properties, which would at current pricing essentially more than double the federal government’s current royalty revenue.

4. By allowing domestic oil's value to increase in price, oilfield workers will be put back to work and taken off of the unemployment rolls and the under employment rolls. Oilfield workers are generally paid very well and there will be a two-pronged benefit to the federal government because (a.) higher income tax is collected and (b.) federal subsidies in the amount of unemployment payments will stop.

5. By allowing domestic oil’s value to increase in price, the banking industry will acquire far fewer "special assets", which they do not want to acquire in the first place. This also firms the balance sheets of lending banks.

6. For allowing domestic oil’s value to increase in price, the oil companies and their halo industries will have fewer bankruptcies and being a position of making profit and paying corporate income tax.

7. The increase in exploration which will clearly come about will inject money in the form of bonus payments, rental payments and royalty payments into local economies. The additional benefit is that those injected dollars will be spent locally can support local businesses. In addition, the bonus and delay rental payments are taxed as ordinary income on federal taxes.

8. The severance taxes paid to the States by the oil companies will essentially, at today’s pricing, more than double and allow the states to have a better balance sheet and provide essential services without increasing taxes (if that state has a state income tax).

9. The counties also tax oil companies and royalty owners annually on the value of the asset. To increase the domestic price of oil will also increase the asset value and those dollars will flow directly to the counties, school districts, etc.

There is essentially no downside to this proposal for the American public. It will even go so far as to encourage alternative energy initiatives, because at the depressed price for hydrocarbons it is economically very difficult for green energy or alternative energy to compete.

I have searched the internet and have found no proposal that addresses the foregoing. Surely there must be some think tank somewhere who have considered this concept, but I have not seen one.

The American economy can not allow this abuse to our domestic energy industry to continue.

There is essentially no downside to this proposal for the American public. It will even go so far as to encourage alternative energy initiatives, because at a depressed price for hydrocarbons, it is essentially uneconomic for green energy or alternative energy to compete.

The American economy cannot allow this abuse to our domestic energy industry to continue.

I am sending this proposal to every presidential candidates' campaign headquarters.

If you agree that the foregoing makes sense, please comment and share this message to all of your friends. Please send this message to your congressman. Please send letters to the editor of your local newspapers. Please send letters to your state representatives. Please send letters to your local representatives.

Thank you for reading and considering my proposal.

R. D. Cotten
Cotten Oil Properties

2

All of the financial people I following and listen to say that until the price of oil goes up, the economy will stay stagnant.

3

Buddy:

A great proposal and I will follow your lead and send this to everyone I can think of. It is about time that someone had enough brass to stand up and do what is right. My fear right now is that this is exactly what Obama wanted and the majority of the American people outside of our blog readers are so hoodwinked that they would be against anything that helps any oil company. They like the cheap gasoline no matter what the negative effects might be.

4

The Federal Government Pays the Corn farmers to raise corn. As far as I know that don't pay the oil companies anything. All forms of Green Energy can't compete with oil and gas when they are high much less when it is cheap. When the oil and gas get real cheap like right now it makes it even harder for it to work without the Fed. Govt payments and support!

IF the U.S. Federal Govt. would curtail the money spent on other countries and spend more of that money here it would "Make America Great Again"!

Buddy make sure you send this idea to DONALD THRUMP!

5

Buddy,

I agree that your proposal makes a lot of sense and the first thing I have seen that takes a logical and easy to understand approach to the problem. My main fear is that it makes too much sense for geniuses in D.C. to wrap their little brains around but I will do my best to help push it along

Thanks for your efforts.

6

I have been in the oil business for over 40 years, and I think the proposal makes sense.

The opponents to this proposal will argue that the American public will benefit more from lower prices at the gas pump.

7

Many of you may have already seen this; but, if it will open up, it is worth reading. Getting anything done under the present administration will definitely be swimming upstream. I can still hope.

http://www.washingtontimes.com/news/2016/jan/17/stephen-moore-oil-at-30-a-barrel-no-thanks-to-obam/

8

Bigfoot, just FYI the Washington Times is and has been owned by the Unification Church of Reverend Sun Myung Moon. I think he is dead now and it is run by his sons.

Stephen Moore is a WSJ / Heritage foundation guy who the Kansas City Star will not publish because of his lack of adherence to using actual facts.

http://www.cjr.org/united_states_project/stephen_moore_heritage_foundation_paul_krugman_kansas_city_star.php

9

A gas price calculator that I used said the difference between $30 and $65 would be 87 cents a gallon.

10

I am not a Washington Times supporter; but, I so like and trust most of what Stephen Moore says and most of what comes out of the Heritage Foundation. With that said, each of us are supposed to have a mind to read and decide if the information makes sense or not. If the information is garbage, then place it in the local can.

11

Here is a little history of oil price regulation.

http://www.downsizinggovernment.org/energy/regulations#sthash.AUoSsbX6.dpuf

12

Lynden Foley is all about liberal politics.

13

Yes, my politics are liberal.

14

I hear alot of the same thing. Problem is they are grasping at straws as they really don't know.

A drop in oil prices means less money in the hands of oil producers but more money in the hands of oil consumers. Currently the U.S. is importing about 5.1 million barrels a day more than we’re exporting of crude oil and petroleum products. At $100 a barrel, that had been a net drain on the U.S. economy of $190 billion each year. That drain that will now be cut by more than half by falling oil prices.

http://econbrowser.com/archives/2016/01/can-lower-oil-prices-cause-a-recession

15

Your proposal is certainly well-intended, but domestic oil and gas production has increased throughout this price decline, contributing greatly to the reduction in commodity prices. This price environment has resulted in operators being more efficient in their drilling and completions costs, and every day is a new learning experience for the operators as they increase their understanding of the shale formations, and experiment with ways to optimize production to reduce the decline curve and lengthen the life of wells. The motivation to improve on these aspects of drilling and completion is greater than ever because of the low price environment, and as a result we're seeing improvements at a much faster rate than we would in a $100 environment. These advancements will ultimately serve to benefit the industry and mineral owners in the long run.

In my view, the US has already done what it needs to do to level the playing field, and that is to lift the export ban. The OPEC nations that rely almost exclusively on oil exports to balance their budgets are in a much worse position than we are in the United States, and eventually they will succumb to the demands of their social programs. Our domestic oil and gas companies with good acreage that properly managed their debt leading into the price drop will emerge stronger than ever, whereas the overleveraged companies will face bankruptcy. This is already reflected in stock prices. The two year charts of RSP Permian, Parsley Energy, Diamondback, Pioneer, Cimarex, Concho etc look pretty healthy all things considered, whereas Chesapeake, Legacy Reserves, Linn Energy, Penn Virginia, Exco, etc...do not share the same good fortune.

Long story short, the OPEC nations leading the supply war charge have budgets that require higher prices per barrel to stay balanced than our domestic shale companies do to be profitable. Eventually the economics will swing in favor of those that require a lower price per barrel to be profitable, or balance a budget, and that is US shale companies.

16

I think that most of the reason of production holding its own through most of 2015 is a direct result of about 85% of 2015 production being hedged at about $90 per barrel.

With a reduction in drilling and fracventory an all time high, I think US production will continue to diminish through 2016.

Best,

Buddy Cotten

17

Hedging does play some part, but the largest producer in the Permian, Oxy, as well as a number of the well funded startups, do not use hedging. The core areas of onshore plays are profitable with oil in the $40s, and gas under $2. That said, I agree, production will decline in 2016 as the debt heavy players throw in the towel.

18

I think Joe Barton (R-TX) is Chairman of the Energy Subcommittee in the U.S. House. He would want to see your proposal, I would guess.

19

Gas is under $2? Wow. I remember when it was about $13.50, those were good times!

20

I don't know that it would do any good. In the oil bust of 1986, that's putting it mildly, Senator Phil Gramm of Texas (1985-2002) spoke in sound bites of the oil industry asking for help. He pointed out, and rightfully so, that the industry traditionally DID NOT WANT governmental interference of any kind. I don't know if it was Gramm in the same sound bites, but someone also referenced the "FREEZE A YANKEE" bumper stickers. The solution? Writing your Congressman sounds good, but don't expect your investment of a stamp and letterhead and envelope to yield any practical results.

The main problem is..... Well, too obvious to even post.