Skip to comments.CBO report finds 'drill baby drill' in practice produces little revenue or oil (barf alert)
Posted on 08/19/2012 9:44:13 AM PDT by lowbridge
It has been confirmed in a new report by the non-partisan Congressional Budget Office that the benefits of opening up and leasing protected federal landsforthe development of oil and natural gas are next to nothing. The estimated profit would be as little as $500 million a year which is only 0.7% of the total gross take of revenue of $150 billion that is expected to be generated over the next decade from leases already in place.
A favorite cheer of the Republican party has been "drill baby drill." Some would now say that talking point has been proven impotent.
The analyzed issue was the opening of ANWR, The Arctic National Wildlife Refuge, and off-shore drilling sites between 5 and 200 miles away from both coasts. Certain parts of the Outer Continental Shelf were also included in the analysis.
The United States allows individual corporations and private businesses to bid on leases for resource development already, with 70% of these areas already in use.
Once operational, which in some areas may take as long as 25 years, the report finds a revenue of $2 billion a year may be possible but not sustainable.
(Excerpt) Read more at examiner.com ...
Is this the same CBO that told us that Obamacare would save us money? Yeah, I guess once they say something, it is proven, case closed. What a putz.
The cbo report:
Absolute Financial and Economic Sub-Moronic Idiots.
CBO needs to take one of those chartered government planes to North Dakota and see how the real world actually works.
That’s why ND has 3% unemployment? Riiiiight.
Just sick to death of the idiocy?
And the ability to eliminate ALL property taxes if desired!
The Feds have usurped both lands and fees from the states.
Government Bureacrat B: There is no way we could have known Solyndra would not make a profit...
Somebody should tell that to the State of North Dakota. They are suffering under the delusion that they’re in a boom.
The most important thing us how it effects the US Government, not jobs, or the oil that’s pumped out.
At least there, when you lease mineral rights, the owner doesn't yank your permits to drill.
When you tell people they can't drill somewhere every time there is a Democrat in the White House, they are going to look elsewhere to make a living.
The CBO is about as non partisan as the Justice Department, the State Department, ATF , ICE, and the IRS.
Who are they kidding?
If you define “benefits” as only what the Government collects in royalty taxes, and forget about the 150 billion in GDP and the high paying jobs that go with it.
Also don't forget that they are only scoring the Alaska national wildlife refuge.
Add in a stable domestic oil supply and any honest person can find more benefits that what they claim here.
Certainly, some members of congress resent that Alaska gets 90% when their state gets only 50% and that plays a part into the question of opening ANWR up to drilling.
As for offshore, any new drilling will include royalty sharing with the state.
In GOMESA 2006, TX, LA, MS, and AL were given royalty sharing. Offshore drilling Virginia will be predicated on royalty sharing. Likewise N Carolina, Maryland, and Florida if and when those states get drilled offshore
As those lands and resources were sold, the area then fell within the state domain.
As you may have noticed, people didn't buy an awful lot of it!
Every now and then someone will claim that many Western states that were brought into the union didn't get the same deal as the older Eastern states.
Actually, Virginia and other states relinquished their Western land claims to their new federal government. It organized and surveyed those lands ~ then awarded them to Revolutionary War patent holders and to private individuals who bought vast tracts with the idea of developing them with roads and trails, and then selling them to new settlers.
The same thing was done with much of the Louisiana Territory, and it's at that point they discovered there's some stuff that you just can't get people to buy!
In fact, some of the later territories acquired directly from Spain and their successor, Mexico, and Russia, were of little use beyond testing nuclear warheads ~ not exactly one of your more regular civilian pursuits eh!
So, no, the new states were treated the same as the original states, and by the ones organized in the 1800s. It's just nobody bought stuff.
Currently were in a situation where technology is allowing us to make use of a lot of the more desolate areas ~ but even then the folks who want the oil aren't buying it ~ they want to rent it!
Not likely folks in the Eastern states would be happy with the federales just giving that land away to those Western states ~ not only wouldn't be prudent, I'd like my money back first ~ just give me a piece of the Bakken Formation ~ I'll be happy!
One of the things I’ve learned since Barack the Kenyan rose to power is that the CBO is made up of a bunch of incompetent buffoons.
OTOH, that is economic activity that generates income and the feds levy an income tax on that.
And one reason gas is so prices are so high? not enough refineries. all the oil in the world won’t do you any good if you can’t process it.
And one reason gas prices are so high? Not enough refineries. All the oil in the world won’t do you any good if you can’t process it.
As you may or may not know, the oil companies/refiners are exporting record amounts of gasoline and diesel. The most since WW 2.
Royalty no but the state does get a severance tax per barrel of oil and unit of gas produced on private land.
Good. I don’t want drilling done to benefit the gov’t. I want it done to benefit our economy.
Tell that to N Dakota.
CBO says pregnancy unproductive, cites hundreds of examples of women who have been pregnant for half a year with no babies to show for it...
Directly from the Mineral Management Service(MMS)
Revenues collected from onshore and offshore Federal lands by MMS are one of the largest sources of non-tax revenue to the Federal government. In 2009, MMS disbursed $10.7 billion in mineral revenues to States; the Office of the Special Trustee for American Indians
for distribution to Indian Tribes and individual owners; other Federal agencies; and U.S. Treasury accounts.
$2.0 billion directly to states and eligible political subdivisions, such as counties and parishes
$6.05 billion to the U.S. Treasury
$538 million to 34 American Indian Tribes and 30,000 individual American Indian mineral owners
$1.53 billion to the Reclamation Fund for water projects
$892 million to the Land & Water Conservation Fund
$150 million to the Historic Preservation Fund
Same old stupid argument: “Once operational, which in some areas may take as long as 25 years,...”
So its not worth it because it take a long time to make money on this. What about caring where we are in 10 years?
So it cant solve the whole problem, so lets not even try to make it part of a biger solution?
Its funny, but we heard these lame arguments back in 1990s over ANWR. The naysayers said it would take 10 years so it wasnt worth it; it would only be 1/2 million barrels a day and that’s just 3% of our energy use ... that was 15 years ago. We could use that oil right about now.
I do hope we get smarter about this so in 2024 we are energy independent instead of having dumb arguments that stop us from doing the obvious right thing. Drill here, drill now!
Production from newly opened areas over the 20232035 period would be far less than the amounts produced by current operations in the Gulf of Mexico.
That's what is on the CBO website, that's not in the report...
Potential Budgetary Effects of Immediately Opening Most Federal Lands to Oil and Gas Leasing
Here is the only instance of "newly" in the pdf...
And the report also says this about "after 2022"...
One should really read the actual report before writing about it instead of reading a website about the report and writing about that.
Drill, baby, drill!
This article sounds to me like somebody is "putting a thumb on the scale".
Lou Colagiovanni, Detroit Liberal Examiner
Lou Colagiovanni is an activist, journalist, and political consultant from the motor city Detroit, Michigan. He is also the founder of the popular political discussion group, “We Survived Bush. You Will Survive Obama.” You may contact Lou at firstname.lastname@example.org or email@example.com.
Garbage in, garbage out from pencil pushers and a liar who wrote this crap.
Garbage in, garbage out from pencil pushers and a liar who wrote this crap.
first of all...Lou is talking about income to the GOVERNMENT not anyone else. and the 70% already leased doesn’t mean anything If the other 30% is where the oil is. Idiots...or think we are.
I’ve been saying this inconvienent truth. Drilling for oil benefits the oil company doing the drilling (not necessarily an American oil company) and does not make sure the US is oil independent because the oil is sold on the global market; not to the US. With China’s growing need for oil, it will probably be gobbled up by our enslaved friends who recieved our industry, jobs and economy. The lease charge is not worth giving up the oil.
Globalism needs to go. It’s humanity rush down the toilet to enslavement.
Why do you say this oil supply is “domestic” when oil is sold on the global market-not in America. Also, the competition to drill our oil would be international - not necessarily American.
The way our politicans, government and elite operate and think within the framework of globalism, is not the way you assume it to be. We get the lease and the mess. We lose our resources. The “global” thing gets the profit and the oil.
That is correct. This story is nonsensical. There are about 5000 wells in the Bakken and they cost 6 to 12 millions a pop. They are doing 240 wells a month - will do 40,000. Do the math.
This just in from the King, this month is not August but actually December.
Any link for more information on that? Thanks
I have invested in a decent road ready travel trailer to haul from Alaska to North Dakota because of the lack of decent wages here in Alaska, since the start of the year I have only grossed $15k, nowhere near my normal yearly wages.
The problem is that you need affordable lodging there. I can tolerate the winter if I had to, its all about going to where the work is.
I used to be an oil field mechanic in Texas back in 1984.
As with bonus payments, between 50 percent and 90 percent of those receipts would be paid to the state of Alaska, if specifications in the authorizing legislation were similar to those in recent legislation.
This legislation has not happened yet.
It is foolish to argue against domestic drilling by using the ‘global market ruse.
There is a global market for timber too, but we still control our own.
They don't collect a royalty but the oil industry pays a 6.5 percent extraction tax and a 5 percent gross production tax to the state.
The US has a surplus of refinery capacity. We refine more petroleum than we use.
Number and Capacity of Petroleum Refineries
Current Refinery Capacity in in US = 17,322,178 Barrels per Day
Petroleum Product Supplied (sold) in US
Current US consumption of refined products = 16,539,000 BPD
We haven't built any new refineries lately, but we have been expanding and upgrading the existing ones for decades.
Sorry, I forgot my link on the tax rates.
Correct and with the manipulative benefit of the words “non-partisan” tacked on.
Many of the CBO requests for study are simply to confirm what the requester knows and are designed to give an answer that the politician wants.
I got that from you. You probably don't remember that but a couple of years I quizzed you about Alaska's share of royalties.
No. That is not true. That 90% was based upon applying laws more recently enacted for the Gulf Coast and “hoping” the same would be done for Alaska.
Read above for the current basis.