Daily Archives: April 27, 2011
by Jeff Dunetz
Posted on April 27 2011 2:01 pm
For the second time since the Egyptian upheaval began, the pipeline bringing natural gas from Egypt to Israel (and Jordan) has been shut down because of sabotage. The explosion took place early Wednesday morning, rocked the area and caused 65-foot flames, according to reports. According to Reuters, a security source has revealed that an unidentified armed gang attacked the pipeline.
This is not a simple act of sabotage; it is an attempt by radical forces within Egypt to make Israel the scapegoat behind the terrible economic situation. It is this radical segment of the populace that seems to be winning the hearts and minds of the Egyptian people. A Pew Study released this week, Egyptians Embrace Revolt Leaders, Religious Parties and Military, revealed that ” By a margin of 54 percent to 36 percent, Egyptians say their country should annul the treaty with Israel.”
The United States did not fare much better; 39% of Egyptians said that the United States response to the political protest movement had a negative impact on the situation, 22% said it had a positive effect, and 35% said the effect was neither positive nor negative. Additionally, 15% of Egyptians said they would like Egypt to have closer ties with the United States, 43% said Egypt distance itself from the United States and 40 percent said ties between the two countries should remain the same.
While this is the second time the gas pipeline has been blown up, there was an unsuccessful attempt a month ago. The reason the pipeline is such a major target is that Egypt supplies Israel with about 40 percent of its natural gas, which the country relies on to produce its supply of electricity.
Israeli officials on Wednesday called for the country to find ways to reduce its dependency on other countries for gas, and urged the government to quickly develop newly found gas fields off the coast of Israel. Israel Electric Company said it had enough gas in the pipeline for the next few days and then would switch to alternative fuels such as coal and diesel to produce electricity.
Exploratory drilling off Israel’s northern coast this past December confirmed the existence of a major natural gas field — one of the world’s largest offshore gas finds of the past decade — leading the country’s infrastructure minister to call it “the most important energy news since the founding of the state.”
The US Geological Survey released a report saying the Levant Basin Province, which runs up the Mediterranean Sea the length of Israel (see above), through Lebanon and the bottom tip of Syria, contains an estimated 1.7 billion barrels of Oil and 122 TCF of natural gas (that’s the best guess estimate; some project the actual reserves may be double).
Since the overthrow of Hosni Mubarak, Egyptian natural gas sales to Israel have become a major issue. In fact, Egyptian authorities have extended Mubarak’s detention to question him regarding the gas deal with Israel, in which Egypt lost more than $714 million (according to the Egyptians). Candidates to replace Mubarak have said they plan to renegotiate the contract with Israel.
The fact that the pipeline has become a flash-point and the attitude of the Egyptian people, it is clear that Israel will have to redouble its efforts to tap those wells as soon as possible.
Gas and peace with Egypt are not the only Middle East crisis points exposed by the overthrow of Hosni Mubarak. For years, Mubarak was the intermediary in reunification talks between President Abbas’ Fatah and Hamas. Mubarak had always insisted that in order for the deal to be made, Hamas must find a way to recognize Israel or the possibility of peace with Israel (ironically the Fatah party charter also refuses to recognize Israel).
Today with Mubarak gone, Hamas and Fatah have announced a reconciliation deal. While no details have been announced, based on previous statements it is almost certain that Hamas will not have to change its violent anti-Israel stance as part of the deal. It is also certain that if the unification deal sticks, and Hamas retains its stance about the destruction of Israel, the E.U. and possibly even the United States will recognize the new terrorist government. This will add momentum to the Palestinian’s goal of a unilateral declaration of statehood in September.
An article by Ryan Lizza in this week’s New Yorker gives the answer. The article called, “The Consequentialist (How the Arab Spring remade Obama’s foreign policy)” ends on an unusual note:
Nonetheless, Obama may be moving toward something resembling a doctrine. One of his advisers described the President’s actions in Libya as “leading from behind.” That’s not a slogan designed for signs at the 2012 Democratic Convention, but it does accurately describe the balance that Obama now seems to be finding. It’s a different definition of leadership than America is known for, and it comes from two unspoken beliefs: that the relative power of the U.S. is declining, as rivals like China rise, and that the U.S. is reviled in many parts of the world. Pursuing our interests and spreading our ideals thus requires stealth and modesty as well as military strength. “It’s so at odds with the John Wayne expectation for what America is in the world,” the adviser said. “But it’s necessary for shepherding us through this phase.”
Leading from behind does not work. First of all true leadership starts with a call to “follow me!” not “go ahead and I will follow.” Secondly it ignores the fact that pure military might is respected in the Arab world, and the inconstancy of Obama’s “leading from behind” strategy is seen as nothing but weakness by the radical Islamist elements in the region.
Putting it all together, it seems as if the overthrow of Mubarak brings the Middle East much closer to a major war than ever before. Not that it could have been prevented; Hosni Mubarak had been unpopular for a long time. The real question is could our president have better managed the situation to ensure that the Egyptian government was turned over to more moderate elements? And there the answer is absolutely yes.
April 26, 2011 2:30 p.m
Attached is the verbatim text of a letter from the president to Congressional leaders regarding oil subsidies:
Dear Speaker Boehner, Senator Reid, Senator McConnell, and Representative Pelosi:
I am writing to urge you to take immediate action to eliminate unwarranted tax breaks for the oil and gas industry, and to use those dollars to invest in clean energy to reduce our dependence on foreign oil.
High oil and gasoline prices are weighing on the minds and pocketbooks of every American family. While our economy has begun to recover, with 1.8 million private sector jobs created over the last 13 months, too many Americans are still struggling to find a job or simply just to pay the bills. The recent steep increase in gas prices, driven by increased global demand and compounded by unrest and supply disruptions in the Middle East, has only added to those struggles. If sustained, these high prices have the potential to slow down the pace of our economy’s growth at precisely the moment when we need to be accelerating it.
While there is no silver bullet to address rising gas prices in the short term, there are steps we can take to ensure the American people don’t fall victim to skyrocketing gas prices over the long term. One of those steps is to eliminate unwarranted tax breaks to the oil and gas industry and invest that revenue into clean energy to reduce our dependence on foreign oil. Our outdated tax laws currently provide the oil and gas industry more than $4 billion per year in these subsidies, even though oil prices are high and the industry is projected to report outsized profits this quarter. In fact, in the past CEO’s of the major oil companies made it clear that high oil prices provide more than enough profit motive to invest in domestic exploration and production without special tax breaks. As we work together to reduce our deficits, we simply can’t afford these wasteful subsidies, and that is why I proposed to eliminate them in my FY11 and FY12 budgets.
I was heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies for the oil and gas industry. Our political system has for too long avoided and ignored this important step, and I hope we can come together in a bipartisan manner to get it done.
In addition, we need to get to work immediately on the longer term goal of reducing our dependence on foreign oil, and our vulnerability to price fluctuations this dependence creates. Without a comprehensive energy strategy for the future we will stay stuck in the same old pattern of heated political rhetoric when prices rise and apathy and neglect when they fall again.
I recently laid out my approach to a comprehensive strategy in my Blueprint for a Secure Energy Future, which includes safe and responsible production of our domestic oil and gas resources and doubling down on fuel efficiency in the transportation sector while investing in everything from wind and solar to biofuels and natural gas. None of you will agree with every aspect of this strategy. But I am confident that, in many areas, we can work together to help show the American people that we can make progress on an energy policy that creates jobs and makes our country more secure.
And I hope we can all agree that, instead of continuing to subsidize yesterday’s energy sources, we need to invest in tomorrow’s. We need to invest in a 21st century clean energy economy that will keep America competitive. In the long term, that’s the answer. That’s the key to helping families avoid pain at the pump and reducing our dependence on foreign oil.
It is time for great rejoicing. Washington has at last declared war on Texas. It is not a war of guns but of regulations, which is war by other means.
Some Esteemed Comrades may not realize that I live in Texas. There. I feel better. I came out. This Bruno bit is nothing, but I’ve been hiding my red soul under a potato basket from some of the people here at the Karl Marx Reeducation Center.
Our glorious environmental friends have discovered the sand hills lizard, which is 3” of sheer bliss. It is thought to exist in about five West Texas counties and three New Mexico ones, and being a lizard, it is more important than any of the citizens there, or the economies of Texas and New Mexico. Which is as it should be. Ten million acres and billions of wealth held hostage to a lizard. Wipe your eyes, comrades: it gets better. Better yet, get a fresh cup of borscht, and yes, it’s worth the splurge.
We are in the process of holding meetings to see if the lizard is endangered. I am confident that it will be found to be endangered: it has no use whatsoever; everyone has seen thousands of them; and so they are perfect. Their complete and total unimportance is the perfect excuse for war.
If we are lucky in our hearings, the lizard will be considered an endangered species, and that will occasion a two-year study on the impact of, well, work and living, in West Texas and New Mexico. For two years there will no farming or ranching. That’s one excellent way to make people quit eating the beef that they like: let the cattle starve in a pen for the rancher can’t buy food for them, or have a forced sale at giveaway prices. This is sure to ruin the rancher.
Ranchers and farmers are being cursed by Gaia now, in the worst drought in fifty years. That’s why we have these wildfires. Many ranchers and farmers have taken mortgages on their land, often underwritten by the government, that they will not be able to repay. Often the government, very wisely in my view, let them borrow much more money than the collateral would bear. It’s not about being a prudent lender. It’s about taking OPM by force and lending it under circumstances which can succeed only if nothing goes wrong.
Fortunately for us, things always go wrong, and if they don’t, we’ll see to it. Misery for all, all for misery! When the land is foreclosed, it will be worth virtually nothing because of the prohibition on ranching and farming. Not only will the government have managed to waste the money it lent, it will acquire property whose value it destroyed. This is brilliant collectivization. The counties’ tax bases will be corrupted, as the property will be exempt from taxation, and since the other property values will plummet, see below, this will further harm the local governments’ abilities to extract as much money as possible under circumstances as unpleasant as possible while they still stay in office. By whatever means. No tapeworm ever feels overpaid or unwelcome.
The laying of pipelines across the property will be banned. Any hydrocarbons will have to detour around the lizard’s putative range. This will add to the cost of gasoline, which is just what President Obama wants. If the winter is cold in the northeast, gas might be scarce, and there is little need for those gas-fired power plants when we can have wind turbines which turn when it is still, and they will after the CBO decrees it after we wave our Prog Wizard’s wand. You know, the one that Paul Krugman sells on late-night infomercials.
There will be no seismic work to prospect for minerals. It might hurt the lizard. But this is fine because all drilling operations shall be curtailed. Two of the Texas counties alone provide 20% of the oil and gas that Texas produces. I wish it were more, to hurt people more. There. I’ll come out again. I’m a made prog and I love to hurt people. That’s why I’m a made prog. Oh, that and self-righteousness and unlimited self-entitlement. That’s why I’m Father Prog Theocritus. If I weren’t I, I’d shoot me.
The value of the mineral owners will be destroyed. And most of them are just people who inherited them. Blameless people. They have to go. Seize their wealth—for they’re oil barons.
The economies of those counties will be destroyed, forcing house foreclosures and vehicle repossessions. Property values of houses will go into free-fall. I have seen houses sell for half the mortgage, and that was in times which will seem good to the ones we can have here. There will be no takers of the foreclosed homes. The lender will sue the borrowers for a deficiency judgment, which they will have to declare bankruptcy to avoid, and this is wonderful because they’re sued and it’s not their fault. They were making payments before they lost their jobs. The jobs they sedulously went to in a vital industry, but then again: working people, vital industry. What is that compared to a lizard and my self-righteousness? See how good it is? It’s like shocking the dog at random times. Soon the dog gives up and doesn’t even try to avoid the shocks. But these are bitter-clingers and so must be made to pay as Lord Obama flies overhead on another vacation. Perhaps he can arrange for the sewage of Air Force One to fall onto a Texas county. How lucky the county would be. And a presidential turd! Be still my beating heart. To think that he shit on us in fly-over country while his government was ruining the bitter clingers who are making money and not consuming it. Yet. It is pure manna from heaven.
More work for attorneys, our party’s biggest contributors. At times I think that maggots could go to law school and learn things.
The roughnecks working on the rigs will be fired. They’ve just bought new pickups to replace the old ones that they had, since the chance of employment, and overtime, and Sunday work, was so high. Also roughnecks tend to live life immediately. They often spend money when they get it, not knowing where they’ll go. Not only will this get them, but then the people who put money away will be destroyed by the inflation coming from the printing presses. See? We’ve got it all. Destroying the impetuous and destroying the prudent. The only safe existence will be, are you ready? Working for government, which is of course all that matters. Government = slavery in the Perfect Prog World. All for the Democrat Party, nothing outside the Democrat party. With this logic alone you can plan re-education camps.
These pathetic red-staters will not be able to service that debt and the pickups will be repossessed. This will cause a glut of pickups on the Texas market, causing even Government Motors to have to cut back on production, although I must say that in the last year I have been seeing more Ford pickups. I don’t know why these roughnecks prefer the only auto company that didn’t take money from them by force. That’s reasonable and oriented toward their survival, meaning that of course it’s wrong. De facto wrong, but de jure right. After all, isn’t the First Church of Gaia all about de jure right? How else could we make people do things that make no sense whatsoever? De facto? It is to laugh. De jure? Bend over, baby, and get used to it. You’ll have a Ford F-250 there next. That’s the only way you can keep it. De jure right = de facto might.
I do worry though about those roughnecks who love guns. I don’t know why: the Second Amendment is obviously misread, and ought to read that the citizenry must be unarmed at all times, and only the government militia can have arms. The Bureau of Land Management has taken to wearing side arms. [ This is true. ]
The bitter-clingers must be disarmed before anyone can play them the Sierra Club commercial asking terminally ill people to take out a dam as they die. Because that sort of speech is so very reasonable coming from our sort, and pardon me while I sniff, but it’s fascist when coming from anyone who is not quite our sort. Bear in mind, we don’t like guns unless they’re guns our goons are holding on evil people. For which read anyone who is responsible, works, and loves this country. Because that self-sufficiency won’t do.
And in counties where the lizard is thought to be, we can use the lack of a lizard as proof that it is endangered. On this logic we can look for penguins or lantern fish in any county in Texas and do it again. After the second time, it’s easy. Remember dear Karl’s dictum that history repeats itself the first time as tragedy, the second time as farce. We can play this Washington farce county by county until the entire state, the red state, I remind you, is immiserated and immerded. Which Texas ought to be, because it didn’t see the greatness of Lord Obama, and may his feet never touch the ground. He could even shit on us without being in Air Force One. Well, his government is trying to. Such heaven.
There we have it. The destruction of a huge chunk of the Texas and New Mexico economy. Foreclosed ranches and farms. Foreclosed houses. Repossessed vehicles. Plummeting property values. Legally acquired assets which cannot be used. Complete and total human misery for a state which did not vote for Lord Obama and which has taken the entirely mistaken view that Washington is where the Sons of the Boys from Brazil came to live. A Texas which ignored Washington as much as possible—that’s the crime of course—and was doing better for it. A low-tax and low-service state. Kill it. Take it behind the barn and kill it with an ax. Can’t let them get uppity; more Californians might want to move there, but they won’t, when the economy tanks.
Then when the government has bankrupted the agriculture and oil businesses, it can declare the lizard to be at sustainable levels. Lenin forfend that we not have an adequate supply of sand hill lizards; might need to put them in say Utah to steal the property there. The government can either keep the property or sell it, with restrictions on drilling rights, further alienating the owners of the minerals from their property. A private citizen can’t do that. But what’s with private property? This is the first step toward its elimination. Oh. The tenth step. Do I hear thousandth?
The crippling of the counties producing 20% of Texas’ oil, and the best oil counties in New Mexico and just as the oil companies had discovered the technology for producing whole new fields to lower the price of gas.
Anticipate the skyrocketing gas prices. Could we get to $8 a gallon? I surely hope so. After all, Lord Obama’s Secretary of Energy wants European gas prices, but then the entire cabinet wants European stagnation and collectivism, as a pit stop on the road to serfdom because nothing will serve until each of has has its own STASI agent.
Pardon me, comrades. This is such a heady draught that I’m squirming in my seat at the utter and complete fulfillment of the progressive fantasy: the ruination of other people’s lives under banner of saving something entirely useless. Was there ever greater power? But I get to feel good about being the meanest person in America, next to Lord Obama.
There. You have it. A lizard will bring down the most vibrant economy of all the states. A lizard will make gas prices jump. A lizard will derail the economy. A lizard will pull Texas’ teeth.
A lizard. A 3” lizard. A completely unremarkable lizard will destroy the usage of ten million acres of desert land sitting on top of oceans of oil and gas. A lizard.
All hail the lizard king! It wins over the bitter clingers every single time. As long as it has the Washington thugs in its corner.
Sorry. This is too much prog happiness. I’ll see you later after I clean up and bite the heads off kittens. Such a wonderful snack. I love deep-fried kitten heads, wrapped up in copies of the Constitution, which I then use to take care of the remains of the last batch of deep-fried kitten heads.
Wednesday, April 27, 2011
By Letters to the Editor/Gloucester County Times
To the Editor:
Joe Mingin (letter, April 17) made the tired accusation that Republicans didn’t care about the deficit when President George W. Bush was increasing it. What news media were he listening to all those years? The majority of conservatives were very critical of Bush’s spending, and said so regularly.
President Barack Obama has now increased our debt far more than any other president in history. He’s added trillions to the deficit with no thought of how we’re going to pay this all back. And this comes from someone who, just over two years ago, promised to cut the budget deficit in half by the end of his first term.
When pressed, all Obama does is talk about the need to raise taxes on the wealthy. There never seems to be a social program that he is willing to cut or do without.
The top 10 percent of income earners already pay more than 70 percent of all taxes, while the bottom 40 percent pay no taxes at all. According to experts, if all earnings were confiscated from every wealthy person in America, it wouldn’t be enough to pay our debt. It won’t be long before the middle class shoulders the burden for all those entitlements.
In his book, “The Roots of Obama’s Rage,” Dinesh D’souza makes a convincing argument tying Obama’s actions to his father’s anti-colonial views. In 1965, Obama’s father wrote in a paper that there is no tax rate that is too high, and even a 100 percent tax rate can be justified under certain circumstances. Barack Obama Sr. believed that the rich had gotten rich at the expense of the poor and, so, should give their wealth back to the poor.
In “Dreams From My Father,” Obama suggests that he has taken on his father’s dreams. D’Souza believes Obama is on a systematic campaign against the colonial system that destroyed his father’s dreams, and is “committed to keep going until he has brought that system down.”
With the help of left-wing financier and billionaire George Soros, it seems that President Obama is on the road to doing just that.
Leda Muth Pitman
WASHINGTON, April 26
(Reuters) – President Barack Obama said on Tuesday oil producing countries should increase their output to curb the rise in gasoline prices because “if we’re not growing, they’re not going to be making money either.”
“We’re talking to oil producers around the world and letting them know it’s in their interest to make sure that high oil prices don’t end up hurting the world economy,” Obama said in an interview with the CBS affiliate WTKR in Hampton Roads, Virginia.
“So they need to increase supplies. And obviously there’s been some disruptions because of Libya but we think that they can make it up and we’re pushing them to do so,” the president said.
(Editing by Sandra Maler)
04/26/11 6:12 PM By: Mark Tapscott
President Obama says there’s not much the federal government can do to bring down gas prices any time soon. Michael Bromwich, Obama’s chief bureaucrat in charge of issuing permits for oil and gas companies to drill off-shore, said the same thing today:
“‘Even if we permitted the hell out of everything tomorrow — every pending permit, some permits that haven’t even been filed yet — it would not have a material effect on gas prices. That’s the simple, clear reality,” said the director of the Bureau of Ocean Energy, Regulation and Enforcement (BOEMRE).
Both Obama and Bromwich either are purposely lying or they simply don’t know what they are talking about. Check out the chart that accompanies this post. Notice what happened on July 14, 2008? Oil prices suddenly plummeted from their historic high of $145 a barrel. Why?
Because that was the day President George W. Bush signed an executive order lifting the moratorium on off-shore drilling in the eastern half of the Gulf of Mexico and off the U.S. Atlantic and Pacific coasts. Overnight, the price per barrel of oil plunged, and that plunge was reflected at the pump soon thereafter.
In other words, Obama could with the stroke of a pen sign an executive order telling his appointees at EPA, the Department of Interior and the Department of Energy to stop throwing up obstacles to increased U.S. oil and natural gas production and instead work with the energy industry on a crash program to “drill here, drill now.”
Given the recent publicity surrounding this issue, this statement may come as a surprise, yet it is 100 percent true. Also true is that the industry pays more than $86 million to the government every single day and has an effective income tax rate of 41 percent. Why then have so many readily bought the notion that the taxpayers are supporting this highly profitable industry?
A fundamental pillar of the U.S. income tax system is that businesses are taxed only on net income. This means that there needs to be some practical method for businesses to recover costs. There are many tax code provisions that allow companies to recover their costs, but tax deductions and cost recovery mechanisms should in no way be confused with subsidies.
For example, many inaccurately classify the ability to recover costs associated with drilling a well as some sort of unique subsidy for the industry. When companies drill, they incur intangible drilling costs, such as site preparation, labor, engineering and design. These “intangible” costs associated with drilling a well usually represent 60-80 percent of the cost of the well. Independent producers can deduct 100 percent of these costs in the year they occur while larger, non-independent companies can deduct 70 percent of the costs in year one and amortize the remainder over five years.
This is the same treatment afforded many different types of taxpayers. Small businesses can expense 100 percent of certain equipment costs and mining companies can deduct mine development costs. Further, research and development (R&D) costs incurred by industries such as biotech, pharmaceutical and software firms can be immediately expensed.
As is the case with research and development, oil and gas development is no sure thing. Despite great advances in technology, drilling a well is the only means to determine the actual presence of hydrocarbons in reservoir rock or sand. And when companies drill, they often rely on new and innovative methods. While these methods have led to the recovery of domestic reserves few thought possible a decade ago, they remain, essentially risky ventures.
Deductions allowed for the U.S. oil and natural gas industry are often more restrictive when compared with other industries. For example, in 2004, Congress enacted the Section 199 Domestic Manufacturers Deduction to spur job creation and retention for all businesses that grow, extract, produce and manufacture goods in the United States. Contrary to assertions, this is not a deduction unique to oil and natural gas manufacturing. It applies to all qualifying industries, from newspapers to home builders, electric companies to movie studios and — logically — oil and gas companies.
For most U.S. manufacturers, the deduction is 9 percent of their domestic net income. However, recent legislation has already penalized U.S. oil and natural gas companies by freezing their deduction at 6 percent.
It is misleading to say this deduction is a subsidy for one industry but a legitimate business deduction for other industries receiving the full amount. Those who argue that oil and natural gas companies are not entitled to the same tax considerations available to other industries ignore the substantial revenue generated by the oil and gas industry for federal and state governments. Every single day, U.S. oil and gas companies pay more than $80 million to the federal government in the form of rents, royalties, lease payments and income tax payments. This goes above and beyond motor fuel excise taxes or state income, property and severance taxes. And they ignore the fact that, since 2000, the industry has invested almost $1.7 trillion right here at home in U.S. capital projects to advance all forms of energy, including alternatives, while reducing the industry’s environmental footprint.
Making the false claim that the industry gets subsidies in order to tax it more has made little impression on voters. As indicated by a recent poll, 62 percent of more than 10,000 voters surveyed oppose efforts to increase taxes on the industry. Perhaps these voters understand something very basic that some politicians and pundits don’t: with some oil and natural gas companies bearing an effective tax rate of more than 40 percent and a real need to develop domestic reserves, policies to impose almost $90 billion in additional taxes do not make any sense.
“We’re organizing the matter, and quickly. The Tamar field gas pipeline will be connected during 2013. We’re also preparing a back-up for this pipeline, in other words, the ability to use coal, diesel, and heavy industrial oil. We’re also working on building a dual-fuel plant, which can operate on natural gas and coal, and are acting to receive gas via a floating terminal.”
Commenting on the latest attack on the gas pipeline in Egypt, which was closed as a result, Landau said, “Our system is ready to handle events of this kind and provide a response. Let’s wait and see how things will develop. Both we and they have a paramount importance in preserving the peace treaty and economic agreements.”