The Truth is out! What the Fed govt makes on oil leases

[red-beard]

Read through the article. The fed makes 37% to 51% on the oil produced in a USA lease. If Oil is $100/bbl, then the fed makes $37-51.

We need to drill offshore and in Alaska big time, so that the Fed can be fed!

Drilling for Dollars
September 12, 2008

Congress is usually scrambling for revenue to spend, not rejecting it out of hand. Which makes it all the more strange that Democrats have resisted the windfall they stand to collect if they drop their ban on offshore oil-and-gas development (see here).
Allowing drilling isn't the giveaway to industry that Speaker Nancy Pelosi and environmentalist dead-enders claim. In fact, liberating publicly owned resources could net the Treasury as much as $2.6 trillion in lease payments, royalties and corporate taxes, according to one estimate currently knocking around Capitol Hill. The returns wouldn't roll in overnight, but that's almost a full year of spending even for this spendthrift Congress.
Already, with the ban in place, offshore development is one of the federal government's greatest sources of nontax revenue, amounting to $7 billion and change in 2007. Energy companies bid competitively to acquire leases upfront, then pay rents. The feds are also entitled to a royalty on the market value of oil and gas when sold. Corporate income taxes on producer profits add to the bank.
All told, studies (some industry-funded, some independent) estimate that the total government take from leases in the Gulf of Mexico ranges from 37% to 51%, depending on the location of the lease. The take is somewhat higher is Alaska.
If the ban were lifted, how much Congress might rake in depends on how much oil and gas is recovered, as well as energy prices, royalty rates and taxes at any given time. A 2007 study by University of California economists Matthew Kotchen and Nicholas Burger concludes that opening up a small portion of the coastal plain of the Arctic National Wildlife Refuge would generate $251 billion in government and state revenue, with oil at its 2005 price of $53 per barrel. Prices are now double that.
And that's just for a patch in Alaska. The $2.6 trillion estimate, prepared by John Peterson (R., Pa.) and Neil Abercrombie (D., Hi.), is a back-of-the-envelope calculation from exploiting the 86 billion barrels of oil and 420 trillion cubic feet of natural gas that the Department of the Interior determines are undiscovered but "recoverable" on the Outer Continental Shelf. And these volumes are almost certainly too conservative.
We don't know what's actually out there because analysis with modern equipment has been forbidden by Congress in many areas for 26 years. Exploration technology is considerably more advanced today.
In other words, Congress can expect buckets of revenue if it gets out of the way of an ocean of oil. Since fossil fuels are expected to provide nearly the same share of total energy supply in 2030 as they do today -- even with major growth in alternative energy -- Washington might as well make a few bucks.

[Chuck Moreland]

Pretty much what I said in this thread:
Oil policy, the economic impact

Only my estimates on oil leases rights might have been low.

However the economic impact is far greater than that articles suggests. The article doesn't consider the stimulus to the economy (due to the oil money being spent domesticly instead of being sent to foreign producers) and resulting increased tax revenues from that.

[red-beard]

True. But I think the focus of the article was what the Fed gets out of drilling. We need to "Drill Drill Drill", so that we can have lower income taxes!

Imagine, opening up all the coasts to drilling, then doing away with the income tax...

What effect would that have on the economy?

[sammyg2]

So much for the liberal democrat lie of oil subsidies.

They take a big chunk of the oil when it's pumped, and most leases have catches where the government gets even a higher percentage when oil gets over $90 a bbl or something. Then they tax the crap out of the oil companies and refineries, then they tax the crap out of the consumer at the pump.
If you're paying $4 a gallon for gas, chances are at least half will end up in the government's pockets eventually.
I've heard it many, many times on this board and every time I ask for specifics, details on these mythical subsidies. They don't exist but the libs keep spreading the manure anyway.

[Chuck Moreland]

Huge effect. Both by filling the tax revenue coffers and economic stimulus.

To coin a phrase, what we need is "transitional drilling". We need to transition from foreign oil dependance to domestic alternative energies - this will take 20+ years to complete. We fill the gap with "transitional dilling".

That means we start drilling immediately to satisfy our domestic oil demands while the alternatives are developed.

[dtw]

Why bother with all that messy drilling (which means real work, and real economic substance, can't have that), when you can just double (or more) the capital gains tax and bleed the Baby Boomers dry in their retirement?

[The Gaijin]

Think of the poor Saudis.. Poor Chavez. Uncle Sam has enough money.

[cgarr]

They should get in the bottled water business, lot less work for about the same cost.

[Mule]

Obama should be all for this. Think of the money he could send to Africa!

[MichiganMat]

Until there is a complete overhaul of the Interior Department, everything should stop:

http://www.nytimes.com/2008/09/11/washington/11royalty.html?_r=1&scp=1&sq=sex%20drugs%20contracts&st=cse&oref=slogin

As Congress prepares to debate expansion of drilling in taxpayer-owned coastal waters, the Interior Department agency that collects oil and gas royalties has been caught up in a wide-ranging ethics scandal — including allegations of financial self-dealing, accepting gifts from energy companies, cocaine use and sexual misconduct.

and...

In three reports delivered to Congress on Wednesday, the department’s inspector general, Earl E. Devaney, found wrongdoing by a dozen current and former employees of the Minerals Management Service, which collects about $10 billion in royalties annually and is one of the government’s largest sources of revenue other than taxes. “A culture of ethical failure” besets the agency, Mr. Devaney wrote in a cover memo.

The reports portray a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch. The reports portray a dysfunctional organization that has been riddled with conflicts of interest, unprofessional behavior and a free-for-all atmosphere for much of the Bush administration’s watch…

Why would we want to give these jokers more business?

[Mule]

Damn right. Stop all oil production!

[berettafan]

Wow, sometimes it's not what you are told but rather what you are NOT told!

That kinda $$ covers up a multitude of poor spending decisions doesn't it!

[sammyg2]

Originally Posted by MichiganMat

Until there is a complete overhaul of the Interior Department, everything should stop:

What a ridiculous thing to post. Do you even think about what you type?

[The Gaijin]

Look at the Norwegians - those crazed right wingers. Drilling all these years in the North Sea. They hate the environment. And adding those trillions to their economy. How sad.

[Mule]

Originally Posted by sammyg2

What a ridiculous thing to post. Do you even think about what you type?

Think about what you said Sammy. You think this guys is capable of reason?

[Tobra]

Originally Posted by sammyg2

What a ridiculous thing to post. Do you even think about what you type?

you are funny