FacebookTwitterGoogle+RedditEmail

Sweetheart Oil Deals

by THOMAS KNAPP

To the extent that the second debate between US president Barack Obama and aspirant Mitt Romney is generating media punditry buzz, that buzz centers mostly around the attack on the US consulate in Benghazi, Libya on September 11: What did Obama know, when did he know it, and so forth.

That’s all very interesting, I guess, but for me the key moment in the debate came early when the two candidates engaged on the subject of energy prices.

Obama pointed out that domestic US oil production has increased during his tenure in office, and that that increase has substantially been a private sector phenomenon.

In response, Mitt Romney — Mister “47% of the people … are dependent on government … feel they are entitled …” — whined that the Obama administration has been insufficiently charitable with “public” land (and taxpayer money) toward the oil companies.

It’s important to understand how such sweetheart “public” land use deals work. This is a subject I started following back in the 1980s when I read an article about leases of national forest land to timber companies. At that time, for every dollar a timber company paid in leasing fees, the US government spent $1.27 on road-building and other projects to enable the exploitation of those timber leases. Or, to put it a different way, the net budget impact was a 27% welfare check to the timber company from Uncle Sugar — prior to and excluding any profits the company might make on the timber itself!

My brief dips into subjects such as the proposed Alaska National Wildlife Refuge drilling kerfuffle indicate that nothing has changed over the intervening decades. So far as I know, the next time a natural resources extraction company offers to cover the entire cost of its own operations on “public” land, let alone deliver a net profit to the US government on the deal, will be the first time.

So now you know why these companies prefer operating on “public” versus “private” property: Taxpayer subsidies make it more profitable. And you know that Mitt Romney’s promise of lower gas prices by opening up more “public” land to drilling is a sleight of hand. He wants to hide some of the cost of gas in your 1040 or on the federal debt ledger instead of letting it be displayed honestly at the pump, so that you pay more while imagining that you pay less.

My point, mind you, is not that Obama is any better than Romney when it comes to corporate welfare. Can you say “individual mandate?” The Affordable Care Act alone is the biggest welfare check to the health insurance industry since Nixon’s HMO Act.

Both candidates are beholden to sets of corporate and special interest benefactors — the bulk of the political class — who expect beaucoup return on their investments. The mission of the state, after all, is to redistribute wealth from the pockets of the productive to the bank accounts of the politically connected. The current presidential contest is just another quadrennial re-appraisal and re-division of the spoils. And it doesn’t really matter that much who wins. They’ll all end up making out like the bandits they are, and you’ll be bled just a little more dry to cover the ever-increasing costs.

For those who oppose “welfare” — be it food stamps which allegedly benefit the poor while actually fueling subsidies to Big Agriculture, or oil leases which allegedly lower gas prices while piping your money to Big Oil via the back door — the only answer is to dispense with political government itself. “Welfare” for the already rich is its raison d’etre.

Thomas L. Knapp is Senior News Analyst at the Center for a Stateless Society.

Thomas L. Knapp is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

May 24, 2017
Paul Street
Beyond Neoliberal Identity Politics
Daniel Read
Powder Keg: Manchester Terror Attack Could Lead to Yet Another Resurgence in Nationalist Hate
Robert Fisk
When Peace is a Commodity: Trump in the Middle East
Kenneth Surin
The UK’s Epochal Election
Jeff Berg
Lessons From a Modern Greek Tragedy
Steve Cooper
A Concrete Agenda for Progressives
Michael McKinley
Australia-as-Concierge: the Need for a Change of Occupation
William Hawes
Where Are Your Minds? An Open Letter to Thomas de Maiziere and the CDU
Steve Early
“Corporate Free” Candidates Move Up
Fariborz Saremi
Presidential Elections in Iran and the Outcomes
Dan Bacher
The Dark Heart of California’s Water Politics
Alessandra Bajec
Never Ending Injustice for Pinar Selek
Rob Seimetz
Death By Demigod
Jesse Jackson
Venezuela Needs Helping Hand, Not a Hammer Blow 
Binoy Kampmark
Return to Realpolitik: Trump in Saudi Arabia
Vern Loomis
The NRA: the Dragon in Our Midst
May 23, 2017
John Wight
Manchester Attacks: What Price Hypocrisy?
Patrick Cockburn
A Gathering of Autocrats: Trump Puts US on Sunni Muslim Side of Bitter Sectarian War with Shias
Shamus Cooke
Can Trump Salvage His Presidency in Syria’s War?
Thomas S. Harrington
“Risk”: a Sad Comedown for Laura Poitras
Josh White
Towards the Corbyn Doctrine
Mike Whitney
Rosenstein and Mueller: the Regime Change Tag-Team
Jan Oberg
Trump in Riyadh: an Arab NATO Against Syria and Iran
Susan Babbitt
The Most Dangerous Spy You’ve Never Heard Of: Ana Belén Montes
Rannie Amiri
Al-Awamiya: City of Resistance
Dimitris Konstantakopoulos
The European Left and the Greek Tragedy
Laura Leigh
This Land is Your Land, Except If You’re a Wild Horse Advocate
Hervé Kempf
Macron, Old World President
Michael J. Sainato
Devos Takes Out Her Hatchet
L. Ali Khan
I’m a Human and I’m a Cartoon
May 22, 2017
Diana Johnstone
All Power to the Banks! The Winners-Take-All Regime of Emmanuel Macron
Robert Fisk
Hypocrisy and Condescension: Trump’s Speech to the Middle East
John Grant
Jeff Sessions, Jesus Christ and the Return of Reefer Madness
Nozomi Hayase
Trump and the Resurgence of Colonial Racism
Rev. William Alberts
The Normalizing of Authoritarianism in America
Frank Stricker
Getting Full Employment: the Fake Way and the Right Way 
Jamie Davidson
Red Terror: Anti-Corbynism and Double Standards
Binoy Kampmark
Julian Assange, Sweden, and Continuing Battles
Robert Jensen
Beyond Liberal Pieties: the Radical Challenge for Journalism
Patrick Cockburn
Trump’s Extravagant Saudi Trip Distracts from His Crisis at Home
Angie Beeman
Gig Economy or Odd Jobs: What May Seem Trendy to Privileged City Dwellers and Suburbanites is as Old as Poverty
Colin Todhunter
The Public Or The Agrochemical Industry: Who Does The European Chemicals Agency Serve?
Jerrod A. Laber
Somalia’s Worsening Drought: Blowback From US Policy
Michael J. Sainato
Police Claimed Black Man Who Died in Custody Was Faking It
Clancy Sigal
I’m a Trump Guy, So What?
FacebookTwitterGoogle+RedditEmail