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.

Will Falk moved to the West Coast from Milwaukee, WI where he was a public defender.

Like What You’ve Read? Support CounterPunch
July 30, 2015
Bill Blunden
The NSA’s 9/11 Cover-Up: General Hayden Told a Lie, and It’s a Whopper
Richard Ward
Sandra Bland, Rebel
Jeffrey St. Clair
How One Safari Nut, the CIA and Neoliberal Environmentalists Plotted to Destroy Mozambique
Martha Rosenberg
Tracking the Lion Killers Back to the Old Oval Office
Binoy Kampmark
Dead Again: the Latest Demise of Mullah Omar
Kathy Kelly – Buddy Bell
No Warlords Need Apply: a Call for Credible Peacemaking in Afghanistan
Ramzy Baroud
Darker Horizons Ahead: Rethinking the War on ‘IS’
Stephen Lendman
The Show Trial of Saif Qaddafi: a Manufactured Death Sentence
John Grant
The United States of Absurdity, Circa 2015
Karl Grossman
The Case of John Peter Zenger and the Fight for a Free Press
Cesar Chelala
Cultural Treasures Are Also Victims of War
Jeff Taylor
Iowa Conference on Presidential Politics
July 29, 2015
Mike Whitney
The Politics of Betrayal: Obama Backstabs Kurds to Appease Turkey
Joshua Frank
The Wheels Fell Off the Bernie Sanders Bandwagon
Conn Hallinan
Ukraine: Close to the Edge
Stephen Lendman
What Happened to Ralkina Jones? Another Jail Cell Death
Rob Wallace
Neoliberal Ebola: the Agroeconomic Origins of the Ebola Outbreak
Dmitry Rodionov
The ‘Ichkerization’ Crime Wave in Ukraine
Joyce Nelson
Scott Walker & Stephen Harper: a New Bromance
Bill Blunden
The Red Herring of Digital Backdoors and Key Escrow Encryption
Thomas Mountain
The Sheepdog Politics of Barack Obama
Farzana Versey
A President and a Yogi: Abdul Kalam’s Symbolism
Norman Pollack
America’s Decline: Internal Structural-Cultural Subversion
Foday Darboe
How Obama Failed Africa
Cesar Chelala
Russia’s Insidious Epidemic
Tom H. Hastings
Defending Democracy
David Macaray
Why Union Contracts are Good for the Country
Virginia Arthur
The High and Dry Sierras
Jon Langford
Mekons Tour Diary, the Season Finale, Mekonception in Redhook
July 28, 2015
Mark Schuller
Humanitarian Occupation of Haiti: 100 Years and Counting
Lawrence Ware
Why the “Black Church” Doesn’t Exist–and Never Has
Peter Makhlouf
Israel and Gaza: the BDS Movement One Year After “Protective Edge”
Carl Finamore
Landlords Behaving Badly: San Francisco Too Valuable for Poor People*
Michael P. Bradley
Educating About Islam: Problems of Selectivity and Imbalance
Binoy Kampmark
Ransacking Malaysia: the Najib Corruption Dossier
Michael Avender - Medea Benjamin
El Salvador’s Draconian Abortion Laws: a Miscarriage of Justice
Jesse Jackson
Sandra Bland’s Only Crime Was Driving While Black
Cesar Chelala
Effect of Greece’s Economic Crisis on Public Health
Mel Gurtov
Netanyahu: An Enemy of Peace
Joseph G. Ramsey
The Limits of Optimism: E.L. Doctorow and the American Left
George Wuerthner
Bark Beetles and Forest Fires: Another Myth Goes Up in Smoke
Paul Craig Roberts - Dave Kranzler
Supply and Demand in the Gold and Silver Futures Markets
Eric Draitser
China’s NGO Law: Countering Western Soft Power and Subversion
Harvey Wasserman
Will Ohio Gov. Kasich’s Anti-Green Resume Kill His Presidential Hopes?
Jon Langford
Mekons Tour Diary, Episode 4, a Bowery Ballroom Blitz