On the heels of the Administration’s recent decision to place a de facto moratorium on offshore drilling in the eastern Gulf of Mexico and the Atlantic, we asked readers of today’s Wall Street Journal if they knew how much that decision might cost in terms of lost government revenue.
According to a study by ICF International, expanding domestic energy development in America’s offshore areas could alone generate $1.3 trillion in government revenues over the life of the resource – along with major increases in jobs and economic activity that result from offshore development.
To put this figure in perspective, consider the following numbers:
- In 2010, the U.S. federal budget deficit was $1.3 trillion.
- The total U.S. national debt currently stands at about $13.8 trillion.
- The U.S. oil and natural gas industry contributes more than $1 trillion a year to the U.S. economy.
As I indicated in my commentary on Wednesday about the moratorium, this decision is a real missed opportunity to spur economic growth, create more jobs and strengthen U.S. energy security. You can read more in last week’s post: DOI’s offshore plan: a missed economic opportunity that also weakens U.S. energy security.
Drilling in our own waters and in Alaska would do more than increase federal government revenues. Drilling would create hundreds of thousands of jobs, produce billions of dollars in desperately needed state and local tax revenues, supports suffering US industries with low energy costs, keeps prices down at the pumps (that’s more money in your pocket), strengthens their economy, weakens our country’s enemies and much more. Drilling will also increase energy stock values that are owned by American trade unions, private citizens, city and state pension plans, teachers unions, private retirement funds, etc. etc. etc. If we really want health care, we could pay for it with the taxes from US oil. If we really want to reduce the debt then we could pay it down with the taxes from US oil. If we really want to reduce unemployment then we could create jobs with US oil.
The oil in the ground will appreciate far more rapidly than oil sold today while the Middle East still has ample oil for sale and in reserves. Oil has the greatest long term value not as fuel but in the manufacture of goods and services derived from oil.
The reluctance to build refineries in the U. S. comes primarily from not wanting to spend money to process a product with a limited future as the world’s supply of petroleum is depleted.
The oil is worth more in the ground?! We don’t have the time anymore to sit on our hands and “wait and see”. We’ve got to act now if thiscountry is going to survive. We have too many enemies ready to exploit our current weakness.
Actually, it is not reluctance (due to “the limited future” of oil) of oil companies to build refineries, but the radical environmental movement’s success in getting laws passed which inhibit both investment in new production and the ability to tap domestic oil reserves. There is only good to come of being able to supply ourselves oil; independence from foreign oil, increased jobs, economic recovery, less expensive gasoline and other petro-based products. The list goes on. The chances of another BP-type spill would be no greater than they are now, and in fact would be less due to lessons learned from it.
“The reluctance to build refineries in the U. S. ” has nothing to do with “not wanting to spend money to process a product with a limited future” and everything to do with environmental whacko inordinate fear and the “not in my backyard” mentality…but there are plenty of places in America that WANT it in their backyard, so the only real remaining problem is the environmental whackos
The reason no new refineries are being built is to restrict supply and maintain price. The last thing they want is a surplus of gasoline to drive the prices down. If it was in their economic interest to build a refinery they would build it. Don’t be naive.
Of course you are not well informed about what is going on in refinery land. Refineries only produce as much product as is required by the market. Where are you going to put it if this were not true? What, build tanks only to sit on all the unsold inventory? Secondly, existing refinery capacity projects have been done such that we do not need as many refineries. Our refinery use is about 80% of the total, meaning we have 20% excess capacity, sitting idle, awaiting the time when needed. This excess capacity has an impact on the prices charged for refining. Often times, the excess capacity is actually used to refine things like gasoline for export just to fill up the capacity.
Refining is not the issue. The constraint is ultimately going to be the unavailability of inexpensive “crude” oil.
By the way, I love this new ad about North America having an abundance of crude oil. They mention that there are billions of barrels in oil sands. The talk about energy independence, about jobs for Americans, about lower costs for consumers, and the hundreds of thousands of jobs it will create. Of course they do mention (like in small print)… read more »
…that the oil sands are in Canada.
Canada is technically part of America, but of course not our Country. Any oil from there is still an export, still a balance of trade issue. The hundreds of thousands of jobs will be Canadians, not people from the US (at least most of the jobs). They are already looking at building or already building a major crude oil pipe line from Canada to the refineries in Texas or La.
Unfortunately we are not blessed with these oil sands. We do have tar sands, but the extraction costs are steep. Off shore oil is not cheap to get either.
I have been hearing this line” The oil in the ground will appreciate far more rapidly …”since the “Great Oil Embargo of 1973″ Fuel is just one of many products derived from crude oil. If there is a reluctance to build refineries because of “a limited future” why would they want to spend all of the $ drilling for it. Ever since the OPEC oil Embargo the politicians have been talking about energy independence from mid east oil. The best way in my opinion to be independant is to drill in every place we have available for oil, the Gulf, Alaska, the shale fields in the western states,etc. Get these wells ready to pump! I am not saying to necessarily pump it but be in a position to pump at will. That should drive OPEC prices down.Oil is their only revenue stream, they are addicted to it.They have to sell it to pay for their needs.If oil prices rise great enough to induce the companies, that own the rights to the reserves where they have drilled, to start pumping and selling it that would only increase the supply and have a definite impact on the price coming from all foreign… read more »
…sources. Something to think about.
The increase in federal revenues would be most welcome and regular people do need jobs to survive. The recession’s effects have impacted so many ordinary Americans. What the Administration may be trying to ensure is that drilling is done is a safe manner, with appropriate safety, and overseen by a truly independent agency. Drilling is currently done in a haphard manner, resulting in events like those we have seen in the Gulf. This has affected the livelihood and health of Gulf residents. Americans need both jobs and a clean environment, both for themselves and for their children.
Vic, thanks for your comment, but I have to disagree with your thoughts about how the industry approaches drilling. What happened in the Gulf of Mexico was clearly far outside industry norms. When best practices are followed, incidents like Macondo should not occur. In fact, the oil and gas industry has drilled more than 14,000 deepwater wells around the world without an incident such as Macondo.
Our CEO recently spoke to the National Commission on the BP Deepwater Oil Spill about our approach to safety. I hope you get a chance to take a look, as it provides some insights into our commitment to the safe production of America’s oil and gas resources. http://www.exxonmobil.com/Corporate/news_speeches_20101109_rwt.aspx
Making decisions based on data has been an exxon difference and the math is compelling. http://www.nytimes.com/2010/07/21/books/21oilbooks.html
Uh… Exxon’s commitment to industry safety? 20 years fighting the Valdez clean-up?
It’s impossible to convince a man of something if his paycheck depends on him believing the opposite… Mark Twain
Having been involved in the Exxon Valdez litigation, I am very aware of what can happen. Your statement “when best practices are followed, incidents like xxxxxxxxx should not occur” could apply to any number of human failings. That statement is awfully self-serving. Of course xxxxxx shouldn’t happen – but it will – and as long as humans are human – they will. I’m all for drilling where it is safe – but I’m more interested in focusing on alternatives to non-renewables. If American technology can solve the problems of drilling at the bottom of thousands of feet of water – miles into the rock – that same ingenuity can find effective ways of replacing petro (incl. Methane) as our primary fuel source! It is all a matter of priorities!
I would also add that specific percentages of net revenue go to alternative energy production modalities. This can be mandated as a federal or state requirement depending and possibly offset corporate taxation as private spending on alternative energy research would save the government money it would spend to do the same through grants.
It is good for a corporation to be responsible and invest in smart alternative energy solutions that have an excellent chance to be economically viable. However, I respectfully disagree that government mandates are good. Government mandates give us things like ethanol which do nothing to help the environment or reduce our dependance on conventional energy.
Mark, it sounds as if YOU have invested in oil stock. We can gain all of these benifits by investing in new and renewable energy sources. Instead of spending money searching for deep off-shore oil resources, efforts should be pointed towards developing wind, tidal, solar, and other renewable energy options. Oil should be saved for important manufactoring products, especially in the health care sector, not so millions of soccer moms can fuel their eight cylinder SUV’s… Energy companies should invest in new renewable energy, they should invest in the worlds future.
Mr Cohen or Matthew Correct me if I am wrong but don’t the oil companies use the crude they purchase or produce to refine petroleum products that have the highest rate of return based on demand? In the refining process I believe you can only get so much “High End” chemicals for plastics, health care, etc. Then you continue to “refine” until you have the very least quality products like ingredients for Ashphalt, etc.
All, why should oil companies be bullied/forced into participating in their demise? This is, after all, what the “Energy companies should invest in new renewable energy” gang really wants. When they say Energy companies, they really mean Oil companies. This gang thinks the OIL companies are inherently bad, so the oil companies should be ashamed of their badness and should repent by cowering to this gang of passive aggressives to change their ways and become a business that the “gang” finds worthy…
Well, “gang”, here’s what I believe… PEOPLE who believe oil is bad should invest their time and resources into working the levers of capitalism to create new renewable energy and invest in the worlds future. Stop wasting your collective time and resources continuing to beat down the oil companies. Get to solving the problem already for goodness sake. Look within for solutions and then go pursue the solutions with all your might. Continuing to point out that there is no alternative to date is quite ridiculous. Go do the hard work of finding the alternative yourself rather than finding places to repeat your platitudes!
And no, I don’t work for oil, I don’t invest in oil, and I don’t belong… read more »
…to any pro-oil group. I’m a citizen capitalist that wants cheap energy and is tired of people adding absolutely no value to society with their unending complaints about how bad aspects of our society are and expecting someone else to do something about it.
Come back when you have a solution, not another complaint.
Agreed that we need to keep our money in America – not abroad. However, there is movement to tax less now.. so that revenne would never be realized in the current state. Also, ExxonMobile, by directive, is responsible to its board and stockholders. Therefore profitability comes before putting money into job-creation etc. ExxonMobile made records profits – why are they not being funneled into job creation programs already? Where are your accounting jobs? India?
Drilling offshore will produce both enormous profits for the oil companies, as well as enormous taxes for the government. The cost of the last two disasters have yet to be fully realized, the Exxon-Valdez cost an estimated $5,000,000,000 to clean up, The BP disaster could cost up to $40,000,000,000. So in terms of jobs and profits, drilling off shore and having accidents are extraordinary lucrative. The long term costs of the environmental impact have yet to be realized, but we just have to answer to the future generation why we foolishly squandered their heritage for profit$.
Those are exactly the reasons why Obama and the Democrats will not go along with it.
Offshore drilling would be a great boost to the US economy, no doubt.
However, the best predictor of future behavior is past behavior. If you give Washington an extra $1.3 billion they will simply spend $2.6 billion – or more.
The problem isn’t that the government doesn’t have enough money, it’s that they can’t reign in their spending. Giving Washington another $1.3 billion is like giving an alcoholic a bottle of whiskey. They’ll always want more.
With or without offshore drilling, we will continue to have a deficit until our creditors make it too painful to borrow any more.
Good point!
I would love to see the extra revenue to help pay our troops better. Freedom isn’t free!
We should be investing in change, we should have a long time ago! NOT OIL ….. Energy from SUN,WIND, GEOTHERMAL
Anthony – The global energy demand is growing such that all economic sources of energy will be necessary. Change takes time, especially when you think of the decades we spent powering our economy with wood before transitioning to coal and then oil. In fact, we detail the evolution of energy in a chart on page 2 of our Energy Outlook: http://www.exxonmobil.com/Corporate/files/news_pub_eo_2009.pdf
But we agree that renewable fuels, along with nuclear, will see strong growth over the coming years. As one example of our commitment to research into breakthroughs in energy technologies, we’ve dedicated resources to researching biofuels from algae. We’re still in early stages of the project, but it could someday play an important role in meeting our growing need for transportation fuels while also reducing CO2 emissions. You can read more about it at: http://exxonmobil.com/algae
We’re also a founding supporter of the Global Climate and Energy Project at Stanford University, where we’re providing $100 million to support GCEP’s research work into technologies such as solar voltaics, fuel cells, biofuels and hydrogen. You can read more at: http://gcep.stanford.edu/
Ken – when you compare your $100 million investment with $40,000 million (one estimate of the damage in the Gulf) – your efforts at GCEP are quite anemic. Reportedly drilling for the Deep Water Horizon cost around $540 million. All it could possibly have found was Oil and Gas – which will run out. How about putting $540 million into finding and developing energy resources which will NOT RUN OUT?
The oil is worth radically more if left in the ground and used in the future for non-fuel products. The $1.3 trillion is also a fictional figure. No one knows what the tail end of global oil production will be worth, but anyone who understands finances knows that using current prices $1.3 trillion paid out over 30 or more years has far less present value.
I wish I could trust oil companies with deep sea, off shore drilling. $1.3 trillion in tax revenue sounds great, but how many clean-ups will need to take place in the future? The BP clean-up is at $40 billion and counting.
Rick
The oil industry develops the technology to drill safely & clean up their spills when they do occur, leading the world in these advanced methods. You act as though the oil & gas industry never learned anything from their mistakes.
Name me anything our government does well other than spend OPM?
Who will pay for the clean-up of this governments mess of 15.8 trillion dollars and 100′s trillions of unfunded liabilites?
Our children and grandchildren…that’s who!
The oil industry develops the technology to drill safely & clean up their spills? If that is the case why are they still cleaning up the Exxon Valdez disaster? Why are the people in the Gulf not getting the money promised them for the major disruption of their businesses? The waters in the Gulf may be called safe but the fish and shrimp are not totally back to what it used to be and they are catching smaller size fish and shrimp. It is still going to take maybe a generation after ours before that water will be clean.
As far as the $15.8 trillion goes can you say Iran and Afghanistan at a cost of over $32 billion a month 0r $384 billion a year for over 10 years comes to $3.84 Trillion. not including the loss of life which has no price.
Screw the offshore drilling. What about the oceanic wildlife? Or are we too wrapped up again in what we can gain for ourselves? Yes, I sympathize with job creation and the economy. I also feel strongly that the environment is not ours to mess with. Leave it be. We do not need oil refineries polluting more oceans. Our waters are polluted enough. But, why leave anything for future generations? It’s all about money. I say, no offshore drilling!!
(I say, no offshore drilling!!)
Then you condemn this country to economic slavery.
Probably the best way to reduce our reliance on foreign oil is to use less. There are many efficiency measures that can be taken NOW that reduce energy consumption. (E.G replacing light bulbs, tuning your car, consolidating driving trips, buying less plastic.) Those changes do not require large capital investment and will help release us from our slavery to oil.
Do you use anything that requires petroleum products or by products? I also have to agree with Bryant and Ken it has taken a long time to evolve our energy needs from wood to coal to oil to nuclear to whereevr it goes in the future. Can you imagine what life would be like in the cities if we still relied on horse and mule power?
Mark is the only person on point here, we are in the economic emergency room, no place for long term questionable alternatives. Drill right now with everything you can muster to get the job done. Build some refineries, right now, government can help us by clearing the way for all this to happen immediately. We need to self sustain our energy needs then use the proceeds to pay down the debt, fund new renewable energy research, and fund healthcare if you like. Tax this new production more heavily for the first 10 years to get the maximum benefit. Eiliminate the the revenues from any appropriation by the government, they would be entirely direct to the intended use. The oil in the gulf is currently harvested by foreign governments while the revenues are deployed against American interests. What does it take to see the light?
Hello?
Drilling generates $1.3T
US deficit = $1.3T/yr
What do you do in year 2?
Hello?
Hello any body remember the OIL SPILL
The oil spill was an aberration. Placing this nation’s very economic future on a single spill is the depth of idiocy.
that is the same thing that was said about Exxon.
As if $1.3T would go toward the deficit! The people getting rich by destroying the future for our children and grandchildren are NOT the ones we should be going to for economic and environmental advice. Play now, pay later always sounds good to rich, old, white guys and ROWG wannabes. The people left with the cancers, the blighted beaches, the stacks of lies and the cleanup bills get tired of being told how “good for us” these corporations are.
I don’t think we have missed anything,,The oil is still there and in lite of the last spill we should move slowly and develop ways of recovering 99% of the spilled oil if an accident should happen and work out ways to protect the lands and waters,,Drill YES,,Blindly NO,,Using our resources and money wisely should be at the top of the list
Hey Ken,
You make an interesting point. Quick and important questoin about data, though:
You say “expanding domestic energy development in America’s offshore areas could alone generate $1.3 trillion in government revenues over the life of the resource.” Is $1.3 trillion the net present value (NPV) of that revenue stream (including assuredly fair deductions for risk and uncertainty, etc) or are you just adding up the money naively (which is what it sounds like from the language used)?
(The answer to this question makes a big difference, since -$1.3 trillion and -$13.8 trillion are the actual present values of the respective federal deficit and national debt. Also, assurance that the figure is fairly factoring in uncertainty and risk is important, since -$13.8 trillion and -$1.3 trillion are figures we can be very certain about.)
Another thing– does the $1.3 trillion figure include deductions for (probabilistically) anticipated federal EXPENDITURES in connection with this prospective industry? For example, (I know this is cheap but…) a certain recent disaster in the Gulf of Mexico caused the United States to incur some costs. Is the expected value of possible costs like these (as well as other unrelated costs that would not be incurred otherwise) factored into the $1.3… read more »
…trillion?
In other words, does this figure include a real, brutally honest, intelectually defensible, GAAP compliant total cost of ownership (so to speak) for the drilling decision? The kind of thing I could find in a 10-K? Or is it just a “you could save up to…!” meaningless promotional figure?
I don’t mean to suggest an answer to this question; it’s a genuine question. However, I will admit that I have seen a lot of figures on stuff like this that are more like gimmicky sticker prices than fair expected values.
Which kind do you use, Ken? Just wondering.
Best wishes this Christmas, Channukah, Kwanzaa, New Year, and all the rest!
The figure you reference stems from a study by ICF International titled, “Strengthening Our Economy: The Untapped U.S. Oil and Gas Resources.” More information on their reporting methods are detailed at: http://www.api.org/Newsroom/upload/Access_Study_Final_Report_12_8_08.pdf
I’m not impressed by an ICF study Ken, and most educated voters and consumers wouldn’t be, but this sensationalized news isn’t for those folks exactly is it?
The ICF is a lobbying firm, nothing more, nothing less. If I paid them enough money, I could get them to produce a report that the sand on the moon was a great source of high protein cheese.
Brass tacks – we do need better energy sources. What the government should do is give companies like Exxon tax incentives for R&D activity that promotes renewable energy sources.
The propensity for short-term thinking that we seem to have rampant everywhere is indicative of aged leadership. Old men will die soon, so why worry about the future, just live for now. We need new leadership at some of these companies and in government.
^^LIKE
In Lee County, Florida the local waste hauler bought and is using garbage trucks that run on compressed natural gas, not diesel fuel or oil. All of the fleet trucks and buses used for local transportation should be run on natural gas which we have plenty of which is cleaner than oil. That would put a dent in our oil comsumption.
The headline is grossly inaccurate, either intentionally or unintentionally. The story states that these actions could generate $1.3T “over the life of the resource”, which I assume is many years. The government deficit is $1.3T per year. So “over the life of the resource”, which might be 20 years or more, this action could generate enough to pay off one year’s deficit. When the time value of money is considered, it wouldn’t even do that.
I recognize that Exxon Mobil’s primary interest is the profitability of Exxon Mobil. To pretend that you are advocating for drilling rights for the purpose of closing the federal deficit or enhancing national security if pure nonsense. You want these drilling rights so Exxon Mobil can make more money. End of story. Everything else is just a magician’s misdirection intended to distract the viewer from what is happening.
Your comment implies that the Middle East will eventually run out of oil. We already know that’s not true. The Earth continually produces oil. We can drill now and still have oil tomorrow. It’s not getting more valuable sitting in the ground. The Earth produces oil on an ongoing basis. We need to drill now, for everyone’s sake.
How many milenium does it take to make a barrel of oil. I think you need to read articles on “Peak Oil” several very informative complied by Exxon.
We are within ten years of peak oil for all major global deposits assuming no rates of increase in its use!!!!????
Stop drinking the “cool AID”
Can you explain how the Earth produces oil on an ongoing basis?
You do realize it takes millions of years to produce oil right? So all supplies can be exhausted…there is no unlimited supply of any resource anywhere on this planet. Everything is limited, although the breadth of those limits changes with the amount of a resource available and its rate of consumption.
The middle east will eventually run out of oil, just like every other well that’s ever dried up did.
Anthony: Wind, Solar and geothermal technologies are not yet making those energy sources viable. In other words, electric cars and solar energy simply hasn’t been made affordable yet. It’s oil, baby. That’s all we’ve got right now. Big Oil has dragged their feet for a long, long time on developing these other energy sources. It’s just not there yet.
Maybe Exxon could help jumpstart this by paying some portion of the $53B in royalty payments that the oil companies have already scammed the US government out of. Don’t believe it? Check out:
http://www.reuters.com/article/idUSN0820402820100408
Unavoidably and predictably the world’s source of oil will vanish in the very near future–certainly within the span of my grandchildren’s lives. Does it not make more sense to investigate and promote alternative energies? Inevitably, offshore drilling will result in endless reruns of the debacle we witnessed in the Gulf of Mexico last spring. How much more of America’s coastline and beaches must be held hostage to this dated and dangerous contributor to atmospheric pollution and erosion of our fragile shoreline? Using up what remains of the Earth’s oil may have some limited justification but not expending every possible avenue of invewstigation into new energy resources is wasteful spending.
Oil remains a valuable commodity by keeping supply down, thus the reason for the decade of increased cost.
As was mentioned earlier, the money to be paid to the USA in taxes would be over period of 25+ years, not exactly a deficit killer.
The real problem with expanded and continued use of this power source is the overall disastrous affect it will have on the economy and the environment. Increase in cost drives recession, even depression, which is unacceptable. Continued pollution of our planet means extinction of several species including ourselves.
Just those factors alone would lead the more intelligent individual to be suspect of more drilling just for a possible relief of the national debt.
Here is a plan, stop shipping production, manufacturing and jobs overseas and watch the debt dwindle to nothing. But that wouldn’t be acceptable to the plutocrats
This blog is, unfortunately, typical of why we have such stupid conversations on energy. You start off with a great point – “how much that decision [to place a de facto moratorium on offshore drilling in the eastern Gulf of Mexico and the Atlantic] might cost”. Such perspective is a valuable tool to understand the issue. Kudos!
Then you go off into statistical la-la-land by restricting the cost consideration to government revenue! Maybe I lost track of the situation, but I thought that Exxon was a private corporation and not a government agency. Has this changed? If not, then Exxon should be talking about the total cost or all of that valuable perspective gets lost.
And then you commit the greatest statistical stupidity available to man – by comparing “revenues over the life of the resource” with “the U.S. federal budget deficit” for a single year. PERSPECTIVE, people! You’re destroying all perspective when you compare 20-years of revenue with a single-year of deficiet.
Exxon needs to be part of the solution – but this dribble has no part in that solution. The world deserves better and Exxon needs to… read more »
…live up to that standard.
I’m not against offshore drilling but do energy companies actually pay taxes?
Rick, the answer to your question is yes. In fact, ExxonMobil is one of the largest taxpayers in the United States – with a tax bill exceeding $60 billion over the past five years. From time to time some in the media or politics incorrectly seek to persuade people otherwise. I talked in greater detail about this last year – you can read my post here.
Ken, please read my post below from March 22 @ 7:42 CT. I am currently engaged in an ‘amateur’ political debate and have been tasked with explaining Exxon-Mobil’s tax expenditure for 2009. I have personally reviewed the 10K filing and cite your response in above mentioned blog “The myth started with a misreading of our 2009″. Upon review of that 10K, it clearly states that Exxon-Mobil’s tax expense to the US was less than 0, section 18. Income, Sales-Based and Other Taxes.
Michael, Thank you for your comments. In addition to the information on the blog post you reference, you might be interested in an article by Politifact, a publication of the St. Petersburg Times. It includes a detailed explanation of our 2009 tax expenditures: http://politifact.com/truth-o-meter/statements/2010/dec/10/bernie-s/bernie-sanders-filibuster-exxon-mobil/.
I love the third bullet – The U.S. oil and natural gas industry contributes more than $1 trillion a year to the U.S. economy. “Contributes”! It seems Exxon is a veritable philanthropist. If this is the case I’d ask how much the government “contributes” in supporting the oil company’s endeavors in war? How much do the taxpayers “contribute” in tax subsidies? How much of these lofty contributions you speak of actually remain in the United States and how much of these contributions are taxed for the good of the people? It’s growing tiresome hearing the same capitalist PR. Try using your mountains of money to tap into energy that has no end (sun, wind, water) and stop focusing on 19th century technology. Intelligent folks know it cannot happen overnight, but develop a plan, get proactive and actually do something… Something more than launching another BS website from your PR company.
Or don’t, and you lose.. Unfortunately so does everyone else.
I agree with those who cry “Drill baby, drill”. Renewable energy is currently a pipe dream of environmentalists. Nuclear energy is the only renewable energy with any realistic expectation of massive implementation. The only other alternative currently is fossil fuels. In an heretofore already unstable supply from foreign sources, the current trend of increasing volatility and instability from those sources dictates that we act quickly to avoid the impending crises which are to sure to come in the relatively near future. Fossil fuels are a finite source of energy. In a perfect world “green” strategies would be ideal but have been proven to be unrealistic in terms of cost/benefit ratio mostly due to the reliance on fossil fuels to accomplish those goals. Our economy has grown to a level which cannot forgive any interruption in a steady supply of energy. The use of fossil fuels are completely entrenched in absolutely every aspect of our economy. While there have been other cycles in the American past of recession, depression, and normal economic downturns, there has always been a source of incredibly cheap energy to weather those storms and carry us through those hard times. Dependence on foreign oil coupled with the… read more »
…current restrictions on the harvesting our own natural resources in this country is a recipe for disaster. It is a fool’s folly to think we can “go green” at this time. There are no proven technologies to supplant fossil fuels, other than nuclear energy. The power grid which provides electric vehicles the necessary electricity is dependent on fossils fuels and would be much more so with massive public acceptance of this particular transportation alternative. The concept of “niche” energy alternatives is simply that: niche. It makes for a nice, politically correct warm fuzzy feeling for those who do not look beyond the immediate. While I agree that use of fossil fuels is not a long term solution to our energy dependence, it is really the only viable game in town. To rely on foreign countries for our energy needs instead of expanding production of our own known resources is just plain crazy.
If the government took away your subsidies and started making you pay taxes in the US, It would be worth even more than 1.3B!
Seeing as how corporations hardly pay any taxes at all why do you people think drilling oil will benefit us any at all..I think it only benefits wall street and speculators and the GOP and oil on the global market is lucrative right now but does nothing to help the man at the pump..all this rhetoric is for the benefit of the corporations I am not fooled at all by those wanting to foul our water,land and air…money is the root of their evil…..we are the disposable ones
I am 17 years old, and I think we should start drilling now because I don’t want to waste my hard earned money on mistakes the people of this generation have made. The government is biting off the hand that will feed this country someday. $1.3 trillion a year would be better than just saying “Oh we are going to fix this economy…after we spend some more money.”
Public disclosure (10K & income statements) have been cited that Exxon-Mobil has taken advantage of off-shore tax shelters in 2009 to receive a net positive in US Federal tax liability (meaning the government owed them money). Some Exxon-Mobil spokespeople have publically disagreed with this information however at present all the public has is what is public record and it appears no taxes paid. Please do not get me wrong here, I am as conservative and ‘rightist’ as it gets, but how can we trust that 1.3 Trillion in tax revenue can be generated DOMESTICALLY when Exxon-Mobil has a history of using aggresive tax strategies?
Look there. In the news.
Oh, my!!!
Another oil slick floating on the Gulf.
What this article assumes is: 1. that these areas will be off limits forever. 2. That the cost of oil is static. If you think about it, the longer we wait to drill these reserves and the price of oil goes to 150 or 200, the US gov’t will actually pay off more of the debt, because they’ll make more money off of the oil. That’s why it’s insane to drill to keep costs low. We are better off as a nation to transition to alternative fuels and wait to tap into those reserves later so that we can make money off of the poor suckers who decided not to transition off of oil. Why do you think Brazil’s is such a rich nation at the moment. They transitioned off of oil during the 80′s and 90′s. At that time, many conservatives were saying, “why is Brazil transitioning from oil, they are destroying their economy, they need to drill more”. But they did the opposite. And now they are an oil exporter, enjoying huge profits and budget surpluses that come with $100 oil. Brazil “can’t wait” to see oil hit $150 to $200 per barrel. Because to them, it’s all… read more »
…”icing on the cake”!!
I have a much better environmental-friendly alternative to raise the same trillion dollars. Currently the tax exempt status of religions in the US deprives our government of hundreds of billions of dollars per year, is used to advance sectarian interests, and to pay for for so-called “free and voluntary” charity. When charity is forced it is not free or voluntary, it is a tithe. Let’s make the religions pay their fair share of the taxes for our democracy. Democracy is not a free-lunch – it costs money.
Exxon doesn’t care about what’s best for the American People. Its a multinational corporation. This ‘blog’ is just propaganda device. This is very manipulative. Remind me to buy exxon products as little as possible.
Check out this link…
http://www.businessweek.com/globalbiz/content/aug2009/gb20090828_057017.htm
They are outsourcing jobs to India. Why not keep them in States if they really cared about jobs.
Last year the oil and gas industry posted a record profit of 18 billion dollars and yet Exxon/Mobile paid no income taxes in the US. Quoting from the article in Mother Jones “No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.” By way of contrast, Walmart, the largest corporation in the US paid $7.1 billion in taxes $5.9 billion of which went to the US. If Mr. Cohen is so anxious offset the deficit, perhaps Exxon should stop whining and give back the billions in taxpayer subsidies it has received or at least forgo the off shore tax shelters it uses to prevent paying US taxes.
Don’t you be naive! The Big oil companies have fought for years to have the government built new refineries, They would save billions by having oil rifined here in America instead of in another country and then having to ship the refined product here. The enviromentalists have fought building new refineries for years and, with the current administration they are winning and having their way!
This discussion about $1.3 Trillion has been an interesting read about government and the oil industry. I tend to seriously doubt that the oil industry will resolve the U.S. budget crisis, though.
Regardless of where the oil comes from, it is still the world’s largest and most valuable commodity. Therefore, oil is an economic factor of enormous proportion worldwide.
It would appear that the oil companies, of which ExxonMobil is no exception, rule the world through their manipulations of the supply of oil, including the control of the U.S. government and the American market to ensure their own profit and survival.
An interesting point was made about trash haulers and public transportation using natural gas as its fuel of choice. One must ask how long natural gas has been available, and then ask why it has not been used? Natural gas has been available in quantity for a very long time. So, why has it not been used? What is the energy industry’s product of choice? What has ExxonMobile done to provide natural gas at its network of retail outlets?
In recent years, there have been obscure reports of a few think tanks who believe that the next world war will be between… read more »
…China and the United States, each with its selected allies, fighting over occupation of the middle east and its vast oil fields. Who currently controls the supply of oil coming from the Middle East?
Obviously, oil companies by any name they are called control the flow of oil. OPEC is its public personna. But, eventually individuals, be they American or any other nationality, control the market for any commodity. Oil is no different.
When the price has finally become so intolerable that the individual no longer is willing or capable of paying the market price demanded by those who control the supply, they will demand of their individual governments’ that the situation be rectified.
From a political point of view, it would seem that the U.S. government just proved the political expediency of satisfying the American demand for cheap energy by tapping into its oil reserves. Eventually the U.S. government will be forced into opening up drilling in American supply fields in the gulf and Alaska, etc. by its voters in their insatiable quest for cheap energy, or seek it elsewhere from protected sources.
No matter how finite oil may be, the question must be asked, “To what extent, then, are Americans and/or the Chinese willing to go to satisfy their national need for cheap available energy?”
Will ExxonMobil among others be a benefactor of this rebellion by the people in the marketplace?
Thank you.
Come on now… This blog is so FAKE! Exxon is filling it with bogus responses; pretending to be real readers. It’s pretty obvious — and really amateur. Exxon, you pay your cutesy PR agency too much.
Exactly. Whomever this Cohen guy is, he obviously works for the company. The Plutocracy lives!
Right. By all means we need to continue and grow our addiction to oil. Really good future thinking.
you’re trying to prop up a dying system. redirect your engineering skills and capital to creation of supply and delivery infrastructure for renewal energy including conservation systems and you’ll be part of the future. Otherwise you’ll be extinct shortly, and you won’t turn to usable petroleum for a couple million years, a waste all around. We will accept a more modest efficient lifestyle and survive, or continue ‘upscale’ overconsumption and die.
Are you kidding? Start with the correct facts, in the debt was more than 13 trillion dollars (heck, in 08 it was nearly 11 trillion) more that 250 billon goes to pay the interest on the debt. When President Obama took office we had debt of nearly 11 trillion dollars, consider this, we have paid nearly 3/4 of a interest on GWB’s debt that he left. So in reality President Obama has increased debt about 3.5 trillion, this during a time when the banking system was on the verge of collapse, the auto industry would have gone into bankruptcy and just to mention a few of the issues. Really Exxon, get your facts straight!
I am an ‘environmental whacko’ and I am tired of being blamed for the lack of domestic production. Most of us want to see an energy secure USA. Our biggest problem with Oil is that we currently export refined brent crude and we don’t want to see clean natural gas burned to boil heavy crude out of tar sands, its stupid, will take years to hit market and still won’t impact the overall energy deficit we continue to underwrite with American blood as the currency as well as exported dollars. Do you really believe Exxon is hampered by US policy makers. Exxon’s annual profits exceed some European countries, they have the influence to get what they want. Not knocking the company, as far as multi-national, non-US aligned energy companies they are no worse than any other. What do you all propose we do when one of the five princes goes dry, or Canada decides to export to China? You can drill every square inch of Alaska, its still a finite whole in the ground.
If Exxon would sincerely like to help reduce the national debt instead of just promoting its own self-interests, perhaps they could start by supporting (instead of thwarting) legislation to eliminate taxpayer-funded oil subsidies, currently estimated at more than $20 billion for the five largest oil companies over the next 10 years.
Otherwise this simply sounds like another bit of typical GOP propaganda, thinly disguised as “news”…. especially since it’s not mentioned that 2/3 of said “debt” is inherited from the previous administration, during which I would wager Exxon never voiced any similar “concerns”.