Obama – King of Class Warfare

 Published in the Lynchburg Ledger on May 13, 2011


We have never had a president as divisive as Barack Hussein Obama, never!  Class warfare is his specialty where he pits the entire nation against the “rich,” be it individuals or corporations.

All the while, he has no problem living like royalty at taxpayer’s expense.  He has been the most extravagant living president ever, treating himself to luxury living while the normal taxpayer struggles to put gas in their car.
On the day Obama took office, gasoline was $1.83 a gallon. Now,  according to the American Automobile Association's Daily Fuel Gauge Report, the national average is $3.96 and every action the Obama administration takes makes it worse.  If the present conditions continue, we may just look back on $3.96 gas as a bargain.

In Europe, they are paying $8 per gallon and Secretary of Energy, Dr. Steven Chu, appears to think that would be fine for us also. 

The White House would rather the public remain ignorant of its own role in driving prices higher, so cynically it has announced probes of investors and oil industry executives that will turn up absolutely nothing, but will further demonize the “rich” in this country.

Naturally, the liberal media will continue to cover for Obama, praising him for the killing of Osama Bin Laden, while keeping the American public ignorant and uninformed in the energy issue.
Not only is the Obama administration actively preventing domestic oil exploration and production but it is also losing revenues from production and leases.

Following the April 20, 2010 explosion of the Deepwater Horizon rig in the Gulf of Mexico, the administration issued a moratorium on May 6, 2010, suspending work on 33 wells in various stages of construction.  Many of those rigs have packed up and moved, never to return which means lost domestic production.

The Obama administration also halted new lease sales in the Gulf, and suspended permitting for leases already offered.

As a result there will be a projected decline in Gulf oil production of 240,000 barrels a day.  That equated to billions of dollars lost in potential revenue to the federal government as oil companies pay the federal government an 18.75 percent royalty on the oil produced.

The offshore oil industry paid $8.3 billion in royalties to the federal coffers in 2008 and an additional $9.4 billion for bids on new leases. In 2010, those bids brought in just $979 million.

Although the  moratorium was lifted on October 12, 2010, oil companies are complaining of a deliberate slowdown in the permitting process.

The Shell Oil Company announced it must scrap efforts to drill for oil in the Arctic Ocean off the northern coast of Alaska because the Obama administration EPA is withholding necessary air permits  because drilling would somehow be hazardous for the people who live in the area. 

The closest village to the proposed drill site is Kaktovik, Alaska, one of the most remote places in the United States.  The village, which is 1 square mile and has a population of 245, sits right along the shores of the Beaufort Sea, 70 miles away from the proposed off-shore drill site.

The EPA  ruled that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project.

Shell has spent five years and nearly $4 billion dollars on plans to explore for oil in the Beaufort and Chukchi Seas. The leases alone cost $2.2 billion.

That loss is going to be passed right along to us at the pumps and the Obama administration either doesn’t know that or they do not care.

Obama loves to rip into the oil companies accusing them of excessive profits and announcing he wanted to remove current tax subsidies.

While the oil company’s profits are high in dollars, they are low in terms of percentage of sales.  For example, in 2010, ExxonMobil had a profit of 6.8 percent where companies like Microsoft and Google showed returns of 20 percent or more.

The tax subsidies Obama wants to eliminate fall into three categories, which are:  oil depletion allowance, expensing indirect drilling costs, and  a tax credit for taxes paid to foreign nations during foreign operations.  

The oil depletion is similar to that for all mineral extraction and timber producers.   The second category (expensing indirect drilling costs) permits writing off indirect drilling costs in the year incurred rather than capitalizing them and writing them off over several years.. The third category (foreign tax credits) is available for all international companies. Closing this "loophole" would discriminate against oil and gas companies in favor of other international companies such as General Electric, which contributed heavily to Obama.

The removal of these tax subsidies will also end up being reflected at the pumps in terms of higher prices. Again, either Obama does not understand this basic economic principle, or he just does not care.

Barack Obama continues to drive wedges between those who produce and those who do not.  Obama believes it is the federal government which makes the country great. Last week in San Francisco, Obama told a Democrat audience that America’s greatness comes from government spending, not from a free market which has produced the highest standard of living the world has ever known or the God-given liberty which has allowed our fellow countrymen to pursue their dreams.

Obama has no problem living the life of the rich and famous for himself (at taxpayers expense), but detests it when those who actually take the risks and succeed do likewise