CBO report finds 'drill baby drill' in practice produces little revenue or oil (barf alert)

examiner ^ | august 18, 2012 | Lou Colagiovanni

[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.

[thackney]

The author is correct that the ANWR royalty goes 90% to Alaska and 10% to the feds.

Any link for more information on that? Thanks

[Eye of Unk]

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.

[thackney]

The CBO report states the following:

http://www.cbo.gov/publication/43527

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.

[Beagle8U]

If the mid-east falls apart with wars etc we can control any export of domestically drilled oil.

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.

[thackney]

In ND the drilling is on private land so neither the feds or the state earn a royalty.

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.

[thackney]

And one reason gas is so prices are so high? not enough refineries.

The US has a surplus of refinery capacity. We refine more petroleum than we use.

Number and Capacity of Petroleum Refineries
http://www.eia.gov/dnav/pet/pet_pnp_cap1_dcu_nus_a.htm
Current Refinery Capacity in in US = 17,322,178 Barrels per Day

Petroleum Product Supplied (sold) in US
http://www.eia.gov/dnav/pet/pet_cons_psup_dc_nus_mbblpd_m.htm

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.

[thackney]

Sorry, I forgot my link on the tax rates.

http://www.nd.gov/tax/misc/faq/oilgas/index.html

[1010RD]

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.

[Ben Ficklin]

"Any link for more info?"

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.

[thackney]

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.

[thackney]

I got that from you.

- - - -

No you did not:

https://www.google.com/search?q=Alaska+ANWR+%22Ben+Ficklin%22+thackney+site%3AFreerepublic.com&sugexp=chrome,mod=14&sourceid=chrome&ie=UTF-8

[Ben Ficklin]

Yes I did. But rather than argue that, lets look elsewhere.

The Examiner article at the top of this thread, which is about the CBO report, says 90-10.

The recent Daily Caller article about the CBO report says 90-10 but that it could be negotiated to 50-50.

The recent Rig Zone article about the CBO report says 50%-90% of the royalty would go to the state

Looking elsewhere:

ONRR says 90%

This blurb about Don Young mentions that at a time in the past he was willing to negotiate ANWR down from 90-10 to 50-50

[KC_Conspirator]

Would someone tell me more about this “non-partisan” CBO?

[thackney]

I want to thank you for taking the time to link that.

I was sure it was not the case, that only recently was there sharing done with Gulf Coast States.

Your link to the ONRR lead me to information showing this has been the case for quite some time, here it is in 1995:

http://www.onrr.gov/Stats/pdfdocs/stmin95.pdf

I was wrong, thanks again for the info.