The world price of crude oil has been on a roller coaster lately, gyrating above and below $100 a barrel. Several weeks ago, prices at the pump reached $5 a gallon in some places but seem to have settled down, at least temporarily, to less than $4 in many parts of the country. The elevated cost of gasoline—and of heating oil, aviation fuel and other energy products derived from “black gold”—understandably is a matter of great concern to most Americans.

Rising energy costs already have changed many families’ summer vacation plans, threatened to short-circuit the weak recovery from the Great Recession and, combined with recent increases in food prices, contributed to incipient inflationary pressures that foreshadow a lower standard of living and a return to the stagflation of Jimmy Carter’s presidency.

Fluctuations in crude oil prices are being driven mostly by uncertainty over supplies from oil-producing countries in North Africa and the Middle East, along with a weakening U.S. dollar and other political factors that largely are beyond the control of the much-maligned U.S. oil industry.

But they are not totally beyond Washington’s control. Just recently, President Obama reversed course once again, announcing policy initiatives that the White House claims will increase domestic oil production.

The president says he now wants to lease more drilling areas in the Gulf of Mexico and reduce bureaucratic delays in issuing permits for energy exploration and recovery.

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From The Hill:

The Senate will hold a test vote Tuesday evening on a Democratic plan to repeal several tax breaks for the big five oil companies.

The plan would repeal an estimated $21 billion worth of incentives over a decade from Exxon, Shell, BP, ConocoPhillips and Chevron.

The vote on a motion to formally proceed to the bill will require support from 60 senators, and it faces big hurdles amid widespread opposition from Republicans and Democrats from oil producing states.

Because, as is noted, Republicans and several Democrats oppose the legislation, the measure could well fail.

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So. With yesterday’s farcical Senate theater, the brain-trust begs a very basic question:

“Senate Finance Committee Chairman Max Baucus, D-Mont., who presided over the hearing [said] ‘Businesses should make a profit. That’s what drives our economy. But do these profitable companies need taxpayer subsidies?’”

Huh. Sen. Baucus, you come out in the black, and every year, too. And it’s fair to say, you are somewhat subsidized by the taxpayer, non? The salary, of course. The car. The driver. Retirement lucre. The trips to and from the office and your home. Often, that’s ‘homes’.

Biiiiig taxpayer-subsidized (actually, provided) budget to underwrite  your work, which of course does nothing so harmful as produce a product driving our economy. More like slowing it down, if fiddling here and there in hope of engineering outcomes desired by your political class along the way.

Then there are the junkets, and for those you may bring with you. The per diems. The mail costs to promote yourself. Then there’s that health insurance. Yep. Really something when someone, who could pay for these things without the taxpayer propping it up, has hard-working people foot the bill for doing his business.

And as a result you’re now worth …ok, well, there’s a little confusion here, with you having reported a negative net worth, while buying a $900,000 home.

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On today’s edition of Coffee and Markets, we’ll discuss what’s driving gas prices and other environmental issues with James Taylor of the Heartland Institute.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

James Taylor at Forbes
Bloomberg: Consumer Comfort Declines as Gas Prices Rise
WSJ: In Washington, Oil CEOs on the Hot Seat
Environment and Climate News
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On Friday, we all woke up to the happy news that gas prices might go down a teensy little bit after Memorial Day. Even though that “teensy bit” might just mean “down to $3.50, that news was welcome in a slow economic climate that an administration pre-occupied with it’s own image seems unwilling to acknowledge. But Americans should make no mistake: the tiny decline in gas prices has little to do with the administration’s energy policies, and this week, they’re going to demonstrate that to the nation as they put “Big Oil” on the chopping block in a new round of finance committee hearings chaired by that perennial failure at basic economics, Chairman Max Baucus.

From Politico:

Senate Democrats are looking to bring to the floor next week a plan to strike billions of dollars in annual tax incentives for the five biggest oil companies.

“That’s what we’re thinking,” a Senate Democratic leadership aide told POLITICO Thursday evening, adding there won’t likely be a vote on the measure next week.

Finance Committee Chairman Max Baucus (D-Mont.) will also hold a hearing next Thursday on gas prices and oil tax incentives for the biggest oil companies — including ExxonMobil, BP, Chevron, Shell and ConocoPhillips.

One major question for the Senate leaders: how any money saved from reducing the tax incentives would ultimately be used. Many Democrats are pushing for the money to go toward deficit reduction, the leadership aide said.

Now this all might sound well and good, using money that we pour into domestic industry to pay down the deficit…but that’s merely a sound bite being used by Democrats to sway a public they think will respond to lip service and key words, and won’t dig deeper into their nefarious plans. The truth is, oil companies, like other companies, rely on tax breaks to be competitive in the world market and to spur on a thriving American industry in times of economic recession, like now.

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On Tuesday, President Obama urged Congress to raise taxes on energy firms by ditching the ability of oil companies to take advantage of certain tax provisions– a move he no doubt expected to be greeted with enthusiasm by members of his party and the liberal base, but which earned him a slap from Rep. Dan Boren (D-Okla.).

Via the Tulsa World:

Democratic U.S. Rep. Dan Boren said Obama just needs to be quiet.

“Americans are tired of empty rhetoric on both sides and want a real plan,” Boren said. “If the president doesn’t want to stand up and be a leader, then his silence would be appreciated from people who are trying to find solutions.”

Boren described Obama as completely uninformed about the oil and gas industry.

“The industry is not made up of just major companies,” he said. “It is made up of small independent firms like those in Oklahoma that produce a vast majority of our domestic production.”

For every CEO of a major company, Boren said, there are thousands of blue-collar jobs that are affected by the Obama administration’s energy policy.

“It is a policy that is very inadequate and has left so many on the Gulf Coast unemployed.” Boren said.

With the midterm elections approaching, it is now clear that cap-and-trade, Democrats’ main weapon in their war on energy companies, is effectively dead—that is, at least until after the election, when some Democrats who may then be exiting Congress will feel more comfortable supporting it.

However, the demise of cap-and-trade does not mean Democrats have put what some dub “plans” to target energy companies on hold completely, or placed them on the back burner.

The Obama administration has worked hard to impose a moratorium on deepwater drilling, which one prominent expert says could directly result in a loss of $2.1 billion in output, nearly $100 million in forfeited tax revenue, and close to 10,000 mostly middle-class job losses.

In addition, the agency responsible for issuing new permits to drill in the Outer Continental Shelf (“OCS”) has issued just four permits during the last three months, as compared to 56 permits in the three months prior to that.

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