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  • Morning Bell: Yes, Politico, There Is a 'Pelosi Premium'

    Considering their recent fumbles, no one can rightly accuse House Republicans of being marketing geniuses. But the campaign they launched last month, the “Pelosi Premium,” highlighting how Democrat energy policy drives up the cost of gasoline, is dead on.

    Covering congressional energy policy, the Politico today dismissively writes of the GOP slogan: “as if House Speaker Nancy Pelosi (D-Calif.) personally sets the price of gas at every filling station across the land.” The Politico may have reporters with great Washington contacts, but the newspaper needs to send its reporters back to school for some basic economics courses. No, Pelosi does not personally set the price of gas in her office every morning. But everything she has done  through policy since taking office has raised the price of gas at the pump.

    Restricting Supply

    Anybody who passed Economics 101 will tell you that a decrease in supply of a commodity will increase its price. Liberals have restricted our national supply of oil for decades, a practice only increased under Pelosi. In 1995, Democrats began limiting oil production in the Arctic National Wildlife Refuge. In 2006, they extended the ban to the Outer Continental Shelf.

    More recently, Democrats in Congress moved to thwart regulations necessary for commercial development of oil shale. An MIT study shows that 750 billion barrels worth of oil shale in Colorado alone would be enough to potentially power the U.S. economy for decades. Full-scale production of the reserves within five years could completely end U.S. dependence on OPEC by 2020.

    A Department of Interior study shows that the Green River Formation in Colorado, Utah and Wyoming has an estimated 1.2 trillion to 1.8 trillion barrels of oil. Developing 800 billion barrels of this shale would produce three times the oil  in the proven reserves of Saudi Arabia.

    Taxing Producers

    The recent House energy bill also included multiple tax provisions guaranteed to drive up prices at the pump, including: 1) increased taxation of income derived from foreign oil and gas production; 2) reduction in the deduction taken by oil companies for domestically produced oil and natural gas; and 3) a change in the amortization period for oil and gas exploration equipment, which raises oil company tax payments.

    In the long term, raising taxes on the cost of capital for exploration and production makes some domestic energy projects less viable, which decreases supply and raises prices. In the short term, tax-paying corporations tend to recoup increased tax payments in the form of higher retail prices.

    Costly New Mandates

    Congress first mandated use of biofuels  in 2005. The 2007 House energy bill more than doubled the amount of biofuels mandated for 2008 and more than tripled the amount for 2015. Analysis of the bill shows that hundreds of new factories will be required and perhaps a billion tons of plant material will need to be hauled around every year. Estimates of the required investment start at tens of billions of dollars. And unlike gasoline, ethanol cannot be shipped via pipelines and must be transported via rail, barge or truck. The logistical and regulatory costs of mixing ethanol into the fuel supply are a huge factor driving up prices at the pump today.

    For months now, Americans have been telling pollsters that the No. 1 issue they will be voting on this November is the economy. According to Gallup, 60 percent of Americans say they are cutting back significantly on household spending to compensate for higher gas prices. Americans deserve to know who is responsible for their soaring energy prices, and lazy reporting and kabuki theater hearings in Congress do not help them pay their bills.

    Quick Hits:

    Posted in Energy [slideshow_deploy]

    11 Responses to Morning Bell: Yes, Politico, There Is a 'Pelosi Premium'

    1. Art Fredenburg, Hous says:

      Need more of tis out to the general public to counter the local medias

    2. Don DaCosta, Raleigh says:

      Who's running the show? These three issues should be put on the ballot in November and let the voters decide, yes or no.

      1) Drilling in ANWR.

      2) Drilling in the continental shelf.

      3) Develop the oil shale in Colorado, Utah and Wyoming.

    3. Mary Ann Clark Sun says:

      I would like to know why Pelosi is against driling for oil in Colorodo, Utah, and Wyoming. I hope congress does something to get on this bill so we can END our dependence on foreign oil.

      Thankyou, Maryk Ann Clark

    4. John says:

      Congress is against the Colorado, Utah, and Wyoming thing because of the effect it may have on the environment – and well, of course the mountains just wouldnt look as pretty when they fly over them.

    5. John, Plano Tx says:

      Congress is against the Colorado, Utah, and Wyoming thing because of the effect it may have on the environment – and well, of course the mountains just wouldnt look as pretty when they fly over them….

    6. Scott D, Norfolk, VA says:

      We need to also consider the secondary effect, as energy prices go up so does the cost to the military, thus requiring more money for training and the conflicts in Iraq and Afghanistan. This in turn increases the federal deficite and reduces the readiness of our forces.

    7. Keith B.Dallas,texas says:

      Why in the world does this type of information not reach the general public? We have become a nation of wimps who are more concerned with Britney Spears having another child than we are about the fact that we( the American people) are under attack not by a foreign enemy but by the greedy self serving bastards of our own government.People need to understand that throughout history it has been bullets that change governments first there is some sort of declaration then there is some type of force to enforce it.Pay attention America we are headed down a bad path.

    8. Steve C, Florida says:

      We are now only beginning to pay the price for "knee jerk" reactions to the environmental concerns of the 70's & 80's. The old saying "everything comes at a price" is more true now than ever. What we don't need now is another knee jerk reaction to this problem. All the available solutions need to be explored, and the true cost, financial and environmental, realized before we react. There are many obstacles in the way of fossil fuel development in our Country, foremost is the fact that environmental laws have been enacted that forbid, or severely restrict the building of new Refineries in the U.S. It's great we have all these possibilities for new fossil fuels, but we do not have the capacity to process them. What we have now is only the beginning of the problem we have regulated ourselves into.

    9. sandie shuck says:

      Politics aside, I am voiting for the candidate who can get me more US oil (the fastest), get the most new green energy to me (policy is not good enough) and also tells the truth that we are addicted to oil. We need oil for: fuel for cars, homes, business,government offices (Lord knows how many of those we heat and cool with oil), planes, resorts and hotels, for defending our nations and borders, food, clothes, etc.

      IN ADDITION, WILL ADMIT THAT IT TAKES OIL TO RESEARCH, DEVELOPE, AND DISTRIBUTE GREEN ENERGY, NEW GREEN CARS, ETC.

      I am tired of the politicians telling us how smart they are and how much we need them-how stupid we have been.

      Sandie Shuck

      WA State

      Hmm Isn't it funny that most of these politicians who are blocking the drilling of US oil and natural gas use much more than the average citizens.

      They have bigger than average homes/mansions , are on the road much, have more than one office,

      travel much more than the average American,etc.

    10. Charles Kouns, Teque says:

      With zero 'greenhouse gas' emissions, Nuclear energy has my vote for electrification across the country(where feasable). Heck! even the French see the logic in that. France has something like 56 Nuke plants in a country the size of Texas. While we have 108 in the whole US generating something short of 20% of demand. We could (and should) double that easily.. Just my opinion.. gk

    11. Don Lund says:

      We have realized these problems for years and have had a blog regarding them. We now have a pro-active website, http://www.fuelsusa.com, spelling out how "We The People" MUST react NOW to solve the Pelosi Premium!

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