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It's Energy, Stupid ... Conaway sees energy as winning issue in presidential race
by Mella McEwen
Midland Reporter-Telegram
By Mella McEwen
Oil Editor
If the theme of the 1992 presidential election was "It's the economy, stupid," then the theme of the 2008 campaign could well be "It's energy, stupid."
"From a strategic, electoral standpoint, it's a winning issue for Republicans," said Rep. Mike Conaway, adding his party will emphasize the issue throughout September and October leading up to the Nov. 4 election.
Republicans, he said, will emphasize the fact they support all forms of energy -- nuclear and clean coal for electric power generation and oil and natural gas, coal-to-liquids and hydrogen for transportation. "We're for hybrid cars, plug-in cars, hydrogen cars, we're for all of it," he said. "We're for all of it; we're also for drilling on the Outer Continental Shelf and in Alaska. That is how we will survive today until we get to that utopia of renewable energy and energy independence the Democrats promise.'
The Midland Republican was back in town for the congressional recess and met Friday with a group of oil and gas industry representatives to discuss energy and other legislative issues.
Congress, primarily Democrats, said Ben Shepperd, executive vice president of the Permian Basin Petroleum Association, which hosted the event, were looking for villains to blame this spring when prices soared over $140 a barrel. First, he said, it was Big Oil, then it was market speculators. Is there any legislation, he asked, to limit speculation?
Conaway said the head of the Commodity Futures Trading Commission had testified before Congress that the commission searches for manipulation daily and has found no evidence in the oil markets.
"There is speculation in every market but raw onions; by law they can only be traded between producers and wholesalers. The swings in raw onions are as dramatic as in any other market. Speculators provide the liquidity you have to have in the markets."
The commission, he added, is doing a study on speculation and the oil markets and Congress should get the results of that study in September.
Buddy Sipes, former city council member and president of Chisos Operating, asked Conaway about the possibility of increased taxes, "particularly the Democrats' mantra of taxing Big Oil."
Any windfall profits tax, Conaway replied, would likely be structured differently than it was in the late 1970s-early 1980s but still would take resources away from the exploration and production phase of the industry, slow discovery of oil around the world and impact prices. There are several bills proposing a windfall profits tax on the industry, he said, "unless we have a president who says he wants to do this and then we'll have some serious proposals in the Senate." He went on to point out that Democratic presidential nominee Barack Obama already has promised to take funds from the oil industry and give $1,000 to families across the nation to help with health care, mortgages or other needs, "though it's unclear how he plans to do that."
It is an issue that's important, said Sipes, saying he was hit with the tax in the early 1980s and waged an expensive, frustrating battle with the government over excess withholdings by the government before he won his case.
"You cannot plan your business because you don't know the impact on the bottom line," he said of the tax. "I'm concerned because we have a good revenue stream and we're putting it all back into the ground. Tax us and we'll have less to put back in the ground.
Taylor Mayne, president of Mayne & Mertz, asked if Republicans were focusing on deepwater offshore drilling or Alaska, and Conaway replied both, but primarily offshore drilling. "Even Floridians have decided that if it's not visible over the horizon, it's OK. The Santa Barbara board of supervisors (in California) recently approved drilling in the channel. Santa Barbara's been the poster child for banning offshore drilling because of a spill 40 years ago and for the board to approve drilling is a big sea change. The Rockies and Alaska are there, but the big deal is offshore."
Conaway went on to point out that, beyond Santa Barbara, 70 percent of Americans "think it's better to produce our own oil than buy from Hugo Chavez. I think the American people will demand a clean energy bill and I bet there's 300 votes in the House to drill the Outer Continental Shelf."
Paul Kenworthy asked if Americans' softening attitudes toward domestic drilling was related to T. Boone Pickens' recent advertising campaign that emphasized the billions sent overseas to buy crude oil and calling it "the greatest transfer of wealth in history."
Answered Conaway, "I do. Americans are waking up to the idea that we're buying from people who don't like us. If we have a choice of doing that or doing something else, they say, why not do something else?"
Shepperd agreed that public pressure has caused the Democratic leadership to shift its position opposing increased domestic drilling, particularly offshore.
"The Democratic leadership has been forced, at least in rhetoric, to consider domestic drilling to be a viable alternative in answering our energy problems."
Other questions covered current events in Iraq, changes to the capital gains tax and how to ensure Social Security is viable for the foreseeable future.
Mella McEwen can be reached at casell@mrt.com.
Oil Editor
If the theme of the 1992 presidential election was "It's the economy, stupid," then the theme of the 2008 campaign could well be "It's energy, stupid."
"From a strategic, electoral standpoint, it's a winning issue for Republicans," said Rep. Mike Conaway, adding his party will emphasize the issue throughout September and October leading up to the Nov. 4 election.
Republicans, he said, will emphasize the fact they support all forms of energy -- nuclear and clean coal for electric power generation and oil and natural gas, coal-to-liquids and hydrogen for transportation. "We're for hybrid cars, plug-in cars, hydrogen cars, we're for all of it," he said. "We're for all of it; we're also for drilling on the Outer Continental Shelf and in Alaska. That is how we will survive today until we get to that utopia of renewable energy and energy independence the Democrats promise.'
The Midland Republican was back in town for the congressional recess and met Friday with a group of oil and gas industry representatives to discuss energy and other legislative issues.
Congress, primarily Democrats, said Ben Shepperd, executive vice president of the Permian Basin Petroleum Association, which hosted the event, were looking for villains to blame this spring when prices soared over $140 a barrel. First, he said, it was Big Oil, then it was market speculators. Is there any legislation, he asked, to limit speculation?
Conaway said the head of the Commodity Futures Trading Commission had testified before Congress that the commission searches for manipulation daily and has found no evidence in the oil markets.
"There is speculation in every market but raw onions; by law they can only be traded between producers and wholesalers. The swings in raw onions are as dramatic as in any other market. Speculators provide the liquidity you have to have in the markets."
The commission, he added, is doing a study on speculation and the oil markets and Congress should get the results of that study in September.
Buddy Sipes, former city council member and president of Chisos Operating, asked Conaway about the possibility of increased taxes, "particularly the Democrats' mantra of taxing Big Oil."
Any windfall profits tax, Conaway replied, would likely be structured differently than it was in the late 1970s-early 1980s but still would take resources away from the exploration and production phase of the industry, slow discovery of oil around the world and impact prices. There are several bills proposing a windfall profits tax on the industry, he said, "unless we have a president who says he wants to do this and then we'll have some serious proposals in the Senate." He went on to point out that Democratic presidential nominee Barack Obama already has promised to take funds from the oil industry and give $1,000 to families across the nation to help with health care, mortgages or other needs, "though it's unclear how he plans to do that."
It is an issue that's important, said Sipes, saying he was hit with the tax in the early 1980s and waged an expensive, frustrating battle with the government over excess withholdings by the government before he won his case.
"You cannot plan your business because you don't know the impact on the bottom line," he said of the tax. "I'm concerned because we have a good revenue stream and we're putting it all back into the ground. Tax us and we'll have less to put back in the ground.
Taylor Mayne, president of Mayne & Mertz, asked if Republicans were focusing on deepwater offshore drilling or Alaska, and Conaway replied both, but primarily offshore drilling. "Even Floridians have decided that if it's not visible over the horizon, it's OK. The Santa Barbara board of supervisors (in California) recently approved drilling in the channel. Santa Barbara's been the poster child for banning offshore drilling because of a spill 40 years ago and for the board to approve drilling is a big sea change. The Rockies and Alaska are there, but the big deal is offshore."
Conaway went on to point out that, beyond Santa Barbara, 70 percent of Americans "think it's better to produce our own oil than buy from Hugo Chavez. I think the American people will demand a clean energy bill and I bet there's 300 votes in the House to drill the Outer Continental Shelf."
Paul Kenworthy asked if Americans' softening attitudes toward domestic drilling was related to T. Boone Pickens' recent advertising campaign that emphasized the billions sent overseas to buy crude oil and calling it "the greatest transfer of wealth in history."
Answered Conaway, "I do. Americans are waking up to the idea that we're buying from people who don't like us. If we have a choice of doing that or doing something else, they say, why not do something else?"
Shepperd agreed that public pressure has caused the Democratic leadership to shift its position opposing increased domestic drilling, particularly offshore.
"The Democratic leadership has been forced, at least in rhetoric, to consider domestic drilling to be a viable alternative in answering our energy problems."
Other questions covered current events in Iraq, changes to the capital gains tax and how to ensure Social Security is viable for the foreseeable future.
Mella McEwen can be reached at casell@mrt.com.
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