OMT One Man's Trash...from Norman Leahy

Friday, April 28, 2006 :::

Still Sticking it to Big Oil

The Senate's new tax and budget proposals won easy approval in that chamber yesterday. And while it does seem the chances for a state budget agreement have risen sharply, the Senate's tax proposals reflect the grim truth that high gas prices tend to make politicians say and do the craziest things:

"It is time to separate the debate. It is time to understand that the budget of this commonwealth is in place," said Sen. Charles R. Hawkins, Pittsylvania Republican and sponsor of the Senate's new $748 million-a-year transportation bill.

His plan features a 6 cents-per-gallon fee that would be assessed on major fuel distribution terminals in Virginia, a move he and other supporters framed as a slap at the petroleum industry as gas prices shoot past $3 a gallon.

"Make no mistake about it, this is a fee that would be charged to big oil companies," said Sen. R. Edward Houck, Spotsylvania Democrat, referring to recent reports of record oil profits and pay packages in the hundreds of millions of dollars for oil executives.

"I have no problem, I have no reservation about hitting the big oil companies here in the commonwealth," Mr. Houck said in a speech supporting Mr. Hawkins' bill.

Damn the market and full speed ahead! Nevermind that oil company profits stem from a rise in global demand for their product...profits that every vote-seeking pol this side of the sunrise is looking to grab a portion of in order to look they are sticking up for the little guy. And to prove it, the Senate did something truly silly:

The full Senate also approved an amendment Sen. Thomas K. Norment Jr., James City Republican, offered that he said would bar terminal operators from passing on the costs, even after Finance Committee counsel Mark Vucci warned the panel that the provision appeared unenforceable and prone to being struck down in court.

Pay no attention to the legalities of the amendment...they're on a crusade against big oil!

And they aren't the only ones. Doing it's best Foster Brooks imitation, Congress is fumbling and stumbling over itself to find a way to sock to the majors:

Various committees and individual lawmakers scrambled to offer relief to consumers, punish suppliers and promote favorite energy-related provisions, most of them offering little or no immediate relief at the gas station pumps.

Senate GOP leaders rolled out a fat package of energy measures, including a $100 rebate to most taxpayers, and reaffirmed authority for state and federal officials to fight price gouging. The proposal also would allow drilling in the Arctic National Wildlife Refuge in Alaska; Democrats called the controversial idea a deal-killer for the rest of the package.

Democrats unveiled their own ideas, including various windfall-profit rebates, a temporary suspension of the federal gas tax and alternative energy investments.

Rebate checks...windfall profit taxes...suspending gas taxes...any daffy and costly idea in a political storm (of their own making). At least someone hasn't lost his head:

Wall Street analysts discounted the likelihood of congressional action against oil companies. "As someone in the industry for more than 25 years, I've seen it before," said Fadel Gheit, an oil company analyst at Oppenheimer & Co. "Penalizing oil companies does not lower prices at the pump. If we have a windfall profits tax, it will just create another moneybag for the government. It will not increase oil production by one barrel. It will not lower gasoline prices by one cent or alter our dependence on OPEC countries."

Of course, Mr. Gheit isn't a politician, so he's more rational in his outlook than they could ever hope to be.

::: posted by Norman Leahy at 4/28/2006 2 comments


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