Councilman Terry Bornemann even used the opportunity to take a jab at the Bush administration, saying he thought it was an “interesting coincidence” that oil prices for the past six years have skyrocketed during the Iraq War and oil companies’ profits have done the same.
The subject was whether or not Bellingham should commission a task force to study the effects of “loss of oil supplies and increasing gas prices.” I might argue the loss of oil supply, but I won’t argue the supply of irony when observing public officials.
Yes, gas prices are increasing, but there is no shortage of oil, just an overabundance of big government interfering with drilling and refining capacity. As for the Councilman’s remark; yes oil companies profit. They invest, they risk, they profit. It’s called capitalism. It goes hand in hand with freedom and liberty. And if oil companies had the freedom to responsibly drill and refine oil where it is available, then no one would be throwing around the term “peak oil.”
Ironically, the petroleum industry is not alone in turning a profit from oil sales. Our government also profits when oil companies profit. I find government to be a little less deserving of the profit though, since they risk nothing and profit everything. Stories of government oil taxes aren’t published nearly as much as stories of oil company profits.
In 2006, America’s major oil and natural gas companies paid an estimated $81.5 billion in income tax. In addition, these companies collected over $48 billion in excise taxes in 2006 on behalf of the IRS. Additional taxes and fees imposed on the industry include gross production or severance taxes, import duties, and property, sales, and use taxes. U.S.-based petroleum companies must compete in the global oil and gas market to ensure a stable supply here at home.
That was the other side of the issue as presented by the American Petroleum Institute. The federal government is collecting billions upon billions from the oil industry, and as income tax, the government is profiting more when the oil industry profits more. An interesting situation that I’m sure doesn’t lower gas prices. In addition, the colorful little map shows how our local governments are also skimming over 54 cents of our money for each gallon of gas we pump. That’s a lot of taxing even for those who drive a Prius, worse for a family mini-van, and potentially devastating for business.
The moral of this story is that our elected government shouldn’t waste a penny of our money studying the effects of the problem; we know they won’t be good. Rather, we need our elected officials to study and implement ways of eliminating the problem. Petroleum related taxes should be first on their list because unlike the Peak Oil scare, Peak Tax is a real tangible problem.Tags: Oil Supply, Oil Prices, Oil Company Profits, Oil Supplies