Tuesday, July 1, 2008

New No-Energy Energy Bills

In case you missed it, last week Congress brought to the House floor two more "energy" bills in an attempt, as Rep. Pete Sessions (R-TX) put it, "to push through poorly-drafted and politically-motivated legislation before the 4th of July..."

I repeat the part of his e-mail update that I received from him on June 27:

This week the price of oil reached a record high of over $140 a barrel. Instead of providing real energy solutions to our nation’s very real energy crisis, this week Congress brought to the House floor two more “no-energy” bills in an attempt to push through poorly-drafted and politically-motivated legislation before the 4th of July District Work Period.

Unfortunately, both bills fail to address the real problem: a lack of supply. Instead, the Democrat Majority has chosen a two-prong approach: blame the free-market system and punish the companies that want to develop more American energy resources.

The first bill scapegoats the futures market, blaming it for higher gas prices. The Energy Markets Emergency Act attempts to over-regulate energy futures – an important price-discovery and risk management tool for businesses. This bill is a sham because it simply restates current law. The “speculators” the Majority attempts to blame for the run-up in oil prices are actually traders who buy and sell contracts to lock in goods at a future price and allow commodity consumers to hedge against possible market volatility.

The futures market is critical to our economy because it stabilizes prices and adds liquidity to the market – but it has nothing to do with the availability of oil in the marketplace. Punishing businesses and investors will not add one additional barrel of crude or BTUs of natural gas to our supply – but increasing our production of American energy certainly will.

The second bill – the Responsible Federal Oil and Gas Lease Act, also known as the “Use-It-or-Lose-It” bill – provides a good sound-bite for the Majority as they rail against oil companies on the House floor, but it actually discourages domestic production by increasing federal regulation on energy-producing companies. Oil and gas producers are already required to surrender their leases if they do not produce after resources are discovered. This bill would add additional timelines that ignore the complexity of the discovery process.

The Majority in Congress would also like American consumers to believe that oil companies lease land so that they can sit on it idly without producing to keep supply low and prices high. This is simply not the case. It is extremely costly and time consuming to lease land, get permits, and conduct geological exploration and discovery exercises. It makes no sense that these companies would jump through all these hurdles just so they could sit on the land and not produce – especially with prices at all-time highs.

Again, the Majority has fallen back on its worn-out strategy of blaming “Big Oil” for the high cost of gas, but they fail to acknowledge who owns “Big Oil”—mostly middle class Americans who have invested in mutual funds, stocks, and pensions. The Majority’s answer to the problem is simple: increase regulation and increase government interference in private sector business operations.

I strongly oppose these no-energy political games that bring meaningless legislation to the House floor but do nothing to lower the price of energy for American consumers. Real Americans are suffering, and the time for games is over—we need to increase the production of American energy now.

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