Saturday, January 06, 2007

Bringing Home the Bacon or Why Oil Companies Can Now Cut Back on Their R&D Budgets

Yesterday FortBendNow headlined that Nick Lampson (D-Stafford) was going to announce that a $375 M 10-year DOE contract would be signed today to fund ultra-deepwater oil and gas exploration and production research. The benefiting consortium is the non-profit Research Partnership to Secure Energy for America group that is headquartered in Sugar Land. As a matter of fact, they share an address with their host, the Texas Energy Center: 1650 State Highway 6, Sugar Land.

The Texas Energy Center was specifically set up to take advantage of expected government funding. As seen in this article written over three years ago in The Houston Business Journal.

“Organizers are working feverishly to snare $6.6 million in matching state funds and at least 30 percent of $2.1 billion of federal funds expected to be appropriated by Congress for research into deep and ultra deep drilling.”
The TEC is a consortium of Energy Companies that include Greater Houston Partnership, CenterPoint Energy, Fluor Corp., ONDEO/Nalco, the Greater Fort Bend Economic Development Council, Halliburton and plenty more (just look at the list of board members).

The Austin Chronicle reported another influx of state funds for the TEC last September:

“The TEC has received $3.6 million from Gov. Rick Perry's economic development slush fund and is guaranteed federal funding over the next decade”.
Now here are my questions:
  1. Why are state and federal dollars being funneled into this one organization?
  2. Have not the oil and gas companies amassed record profits in the past year?

  3. Have not these same companies promised that they would reinvest these profits in finding ways to develop new technologies, especially in frontier areas like the ultra-deep water?

Is someone pulling a fast one?

The whole thing is the brain-child of, are you ready, Tom DeLay (R-Nowhere), who, in the grand tradition of earmarks and porkbarrel spending, inserted the provision in an energy bill after committee conference on it was closed.

The bill passed.

But early in February 2005, the Bush administration called

“…on Congress to repeal the Energy Policy Act provision subsidizing energy companies' research into deepwater drilling. The President is looking forward to Congress taking about $2 billion of these tax breaks out of the budget over a 10-year period of time.”
“With oil prices at record levels, energy companies have large cash flows - and energy companies should reinvest their profits into expanding refining capacity, researching alternative energy sources, developing new technologies, and expanding production.”

This link, on the same subject is courtesy of Susan.

This prompted Maurice Hinchey (D-NY) along with 27 others, including Edward Markey (D-Mass) who introduced his own bill as well, to introduce HR 5300, the Energy Fairness for America Act on May 4th, 2006.

Section 5 of this Act contained stipulations that would terminate certain provisions of the Energy Policy Act of 2005, including Tom DeLay’s added provisions:

“(6) Subtitle J of title IX (relating to ultra-deepwater and unconventional natural gas and other petroleum resources).”

The bill was first referred to the House Ways and Means Committee, then the House Resources Committee, then the House Resources Subcommittee on Energy and Mineral Resources, then the House Science Committee, then the House Science, Subcommittee on Energy.

And there, it died.

Hey, you know, Congressman Al Green (CD 9) sits on that committee. And hey, wasn’t that also Nick Lampson’s committee before he was turned out in ’04? Markey's bill? He just tried to get tax breaks in the Energy Policy Act terminated. It died in committee, too.

Bob Dunn, in today’s excellent coverage of this, reports that Nick was instrumental in getting the bill killed.

“Melanie Kenderdine, vice president of the Gas Technology Institute and a RPSEA board member, said Lampson was instrumental in rescuing the DOE program in May 2006, when Markey offered an amendment in Congress to kill the project.” She said Lampson, who was campaigning for the seat he ultimately won in CD-22, took time out to “educate his past and future colleagues” in the House about the benefits that would accrue from the project RPSEA now will manage.”
“ ‘When I found out there were no limits to what could be done with this research money, it was easy for me to contact Markey…,’ Lampson said. ‘I was able to get them to understand it was not just an oil subsidy…’ ”

Nick Lampson also claims that this will not cost the taxpayers one cent.

“Money for the research contracts will come from a trust fund set up by the federal Office of Management and Budget, which itself is funded by royalties paid to the government by oil and gas producers using federal land”.

Waitaminute. Those royalties are paid by oil companies so they can drill and produce on the Federal government’s land. OUR land. Those royalties should be reserved for the people: education, health, student loans, subsidizing Indian Casinos.

The profits made in the past year by oil companies are obscene. Fully integrated oil companies like ExxonMobil get it at both ends: high crude prices and high gasoline prices. They justify these obscene profits by saying that the cost of drilling in deepwater and frontier areas is steadily increasing, and they need to develop new technologies to get it done.

So now, the oil companies can keep more of their profits for corporate executive bonus plans. The royalties that they have to pay to us, US, are going back to the R&D efforts that they don’t have to pay for any more.

Well it’s only been a week, and Nick has found a way to bring the bacon (a form of pork) home to Sugar Land. That should get local detractors salivating, but you know, there still are people in Fort Bend County who don’t even look at an incumbent if there is a D next to his name.

Susan has a take on this that is more to the point, I think.

2 comments:

muse said...

You had me convinced at Tom DeLay (R-Nowhere).

Seriously, though, one concern I have is that DeLay made this happen through a late night, last minute addition to a bill. That's the way Republicans ran right over the rest of the House and Nick always said he hated that.

I wonder why we didn't hear about this back in May when Lampson was right in the heat of the campaign? Would the deal still have been done and the announcement made today if an R had one the seat?

Mark said...

Wanna see something extremely disgusting?

Check it:
http://congress.capitolannex.com/?p=11

Has his floor comments from yesterday, including this excerpt:

"I urge all of you, my distinguished colleagues, to join together in supporting these vital reforms. This is the first step toward restoring pride in our democracy, and that means restoring fiscal responsibility. Passing our massive debt on to our kids and grandkids is not a legacy we want to leave. Those who elect us are our employers, and we must be diligent in spending their hard-earned money which they entrust to us.

The number of earmarks alone increased nearly 400 percent and spending doubled over the last decade. We must all make an effort, Republicans and Democrats alike, to trim the fat from the budget. We can once again have a balanced budget, fund important initiatives and be diligent in our oversight of agencies of government, all without raising taxes.

I am proud to cast one of my first votes in the 110th Congress in favor of pay-as-you-go rules and aggressive reform of the earmark process so that we can return to a government truly of, by, and for the people."


These words were delivered ONE DAY after announcing a $1.5 billion earmark...A massive piece of pork in clear violation of pay as you go principles.

Rank, naked hypocrisy!