The recent debt ceiling debate has prompted increased focus on deficit reduction, with President Obama and congressional leaders proposing various cuts and tax increases aimed at moving the budget towards balance.  As has become typical, for President Obama and his friends in Congress, this means targeting the oil and gas industry with proposals to nix tax credits and deductions that are broadly available across industries well beyond oil and gas.

Ironically, however, two new studies indicate that if Obama wanted to boost revenues from the oil and gas industry, he would not need to do it via pursuing tax hikes.  Rather, according to a new study commissioned by the Gulf Economic Survival Team (GEST), an organization dedicated to helping rebuild the Gulf Coast’s flagging economy, returning to normal drilling levels in Gulf waters would boost revenues demonstrably.

Since the BP Gulf Oil spill – which happened over one year ago – the Administration has been dragging its feet in allowing American companies to drill in American waters. Approvals for shallow- and deep-water exploration permits are down by over 50 percent and 80 percent respectively.  But a resumption of drilling would pour $44 billion into the American economy, create 230,000 jobs and, what’s more, increase tax revenues from American oil and natural gas companies by $12 billion, according to GEST.

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Criticism continues to amass on the heels of the blog posted by the Whitehouse Wednesday boasting ‘Expanding Safe and Responsible Energy Production.” Attempting to drive home the point that, long before this current spike, their main concern rested in “increasing responsible domestic energy production – including oil and gas,” the Obama Administration engaged in a bit of revisionist history. In reality, actions taken by President Obama and his staff indicate that despite the rising cost of oil, there is little sense of immediacy to get one of our most profitable industries back to work.

The main argument behind the stagnant permitting, the Obama Administration maintains, is BP’s disasterous blowout in the Gulf, “protecting” Americans from the horrors that would no doubt ensue should deepwater drilling restart at a pre-Gulf oil spill clip. Forbes reporter Christopher Helman makes a valid point in exposing the disingenuous nature of the Obama administration’s willingness to issue permits: while the industry was not adequately prepared to clean up the spill, reports have shown that the main problem was in BP’s implementation of the well, not the overall industry’s handling of the disaster – nor the industry’s chances of a second failure. In fact, the chances of another spill have gone down significantly with the most recent set of safety procedures established by the Department of the Interior. Companies now have the technology to drill safely in deep water, and new measures are in place to contain and control a BP-sized blowout, in the (very) off chance such an incident should happen again. It was BP’s haste in building the well, not the industry’s haste in correcting the problem.

William Reilly, co-chair of the presidential panel tasked with investigating causes of the oil spill, remains impressed with the industry’s ability to respond to the disaster, The Hill reports.

“William Reilly, co-chair of the presidential panel tasked with investigating causes of the BP PLC (BP, BP.LN) oil spill, on Tuesday called the oil and gas industry’s response to the disaster ‘remarkable and reassuring,’” Dow Jones reports.

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While Harry Reid may have allowed the energy tax hikes to die on the floor of the Senate, liberals nationwide have continued their attacks on the energy industry. The Gulf oil spill is barely a fond memory of a moratorium and Democrats are already seizing on the incident to push a host of job-killing, industry-kneecapping taxes and regulations designed to do what they failed to do legislatively: take down the American energy industry.

First the regulations: starting in January, the EPA will begin enforcing a little known provision called the “Tailoring Rule” – a new series of regulations that allow the EPA to dole out permits to carbon-generating companies “allowing” them to pollute in certain amounts, strictly regulated by environmental watchdogs. These regulations don’t just touch the usual suspects, but also renewable energy sources that don’t immediately fall into the “green” category as defined by environmental groups – sources like Maine’s biomass industry, which creates usable energy from environmental waste. Under the EPA regulations, the biomass industry, which was viewed – and treated – up until now, as carbon neutral, would face a host of regulations directed at greenhouse gas producers – regulations that would greatly raise the cost of doing business and could have dire economic consequences for Maine and beyond.

And then there’s the taxes.

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There’s a great new report from the Manhattan Institute emphasizing the role of tort law as a supplement (and alternative) to regulation. If fishermen in the Gulf coast had a right to be free from pollution, perhaps BP would have invested more in preventing the recent disastrous spill. Unfortunately, as the MI piece points out, trial lawyers have tended to focus not on these genuine – and objectively verifiable – harms but instead on hypothetical and highly subjective concerns. A series of class action suits resulting in essentially arbitrary payouts has enriched the trial lawyers but done little if anything to protect individuals or the environment from harm. Indeed, arguably these suits have been counterproductive as they have often led to the elimination of beneficial substances, while diverting resources to lawyers and plaintiffs and away from more productive uses.

One of the examples given in the MI report is MTBE, an additive used in gasoline to make vehicles run more efficiently (and thereby produce less pollution). Oil companies started adding MTBE to fuel in 1979 but its use was increased after 1990 – as the MI report points out “Congress had reached the policy judgement that adding MTBE to motor fuel produced a net benefit, even though the chemical can affect the taste of drinking water if it enters the water supply.” The EPA also evaluated MTBE and concluded in 1997 that “there is little likelihood that MTBE in drinking water will cause adverse health effects” in the quantities present. Given that the EPA tends to err on the side of caution (demanding very wide margins of safety), it seems fair to conclude that MTBE in drinking water really was most unlikely to pose a danger to health.

If historic tort standards were applied, there would be no case: MTBE might have an impact on taste, but that is of course subjective. It does not – according to the EPA at least – cause an “objective” harm to human health. This distinction is important. For the law to act as a guide to human behaviour, it must be based on objective standards. If judges apply subjective standards after the fact, how are we to know the standard against which we will be judged? Taken to its logical conclusion, we enter the world of Kafka’s Josef K, who is tried with crimes he didn’t even know he had committed.

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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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The media continue to report dismal economic news, raising the specter that our teetering economy may fall back into a “double-dip recession.” Continuing high unemployment is the biggest worry for most Americans. The percentage of working-age people in the labor force last month fell to 64.7 percent—the lowest figure in a quarter century.

You would think that the administration’s top priority, then, would be to foster a pro-investment, pro-hiring business atmosphere. You’d certainly not expect them to pursue policies that could push any impending recovery, fragile at best, over the “tipping point” and down into another economic chasm.

That, however, appears to be just what they’re doing.

The administration’s entire agenda—from “stimulus” spending, to government-run healthcare, to takeovers of financial institutions, to higher taxes—has spread paralyzing uncertainty throughout the investment community. But that hasn’t caused them even to slow down, let alone change course.

Consider three job-killing measures imposed by this administration in a single area: environmental regulation.

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A lot of things have gone wrong in the last 72 days since oil started spilling into the Gulf, and very few things have gone right. Unfortunately, the oil spilling into the Gulf is only one of many, many problems in the Gulf. There are the obvious problems of extremely polluted water, the oil soaked animals, the oil soaked beaches, the loss of tourism, the loss of jobs, and the loss of faith in the process that is supposed to ensure things like this never happen. But, why hasn’t the oil been cleaned up? Why is the leak still spewing oil into the Gulf? BP has their fair share of blame, but so does the federal government.

The government has had a lot of missteps. The EPA would not allow ships to skim oil from the water because they couldn’t get 100% of the oil out. They could only get 99% of the oil out. They failed to get rid of the horribly outdated Jones Act that forbids foreign vessels from helping us clean up the gulf. There have been plenty of problems with the way the Federal Government has reacted to the oil spill, but it’s never too late to start getting it right.

The Heritage Foundation has put together a list of things the Obama administration can do to mitigate the damage that the oil slick can still do. These are steps that can be taken immediately, and more items will be added to the list when appropriate. Simple things like waiving the Jones Act (as the Bush Administration did during Katrina), or accepting international assistance. Or allowing ships like the S.S. A-Whale–that has the capability to skim 500,000 barrels a day– to immediately start assisting efforts. It’s in the Gulf now, but it is still not being used.

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In this week’s edition of Coffee and Markets, featuring The New Ledger’s Francis Cianfrocca, we’re talking about the BP spill, the right approach to tax policy, and why Obamacare won’t work. We’re brought to you as always by Andrew Breitbart’s BigGovernment.com and LibertyPundits.com.

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Related Links:

TNL: Dances With Bears
BigGovernment: Obamacare Isn’t Medicine for Deficit
Avik Roy: Orszag’s Weak Response
Barack Obama: Frat Boy in Chief?

The media in the backdrop of Barack Obama’s now infamous “whose ass to kick” comment has argued that this President’s critics are angry at him for not showing more emotion.  That conservative bastion CNN features an article entitled ‘Why Obama doesn’t dare become the ‘angry black man’ that reads:

Who would have ever expected some white Americans to demand that an African-American man show more rage?

If you’ve followed the Gulf of Mexico oil disaster, you’ve heard the complaints that Obama isn’t showing enough emotion.

But scholars say Obama’s critics ignore a lesson from American history: Many white Americans don’t like angry black men.

[…]

“Folks are waiting for a Samuel Jackson ‘Snakes on the Plane’ moment from this president as in: ‘We gotta’ get this $#@!!* oil back in the $#!!* rig!’ But that’s just not who Obama is,” says Saladin Ambar, a political science professor at Lehigh University in Bethlehem, Pennsylvania.

A few observations here.  First, notice how it is only leftists like Bill Maher, Spike Lee and the elites in academia and the media coming out and making this a race issue.  Second, how unintelligible is this argument?  People are upset because the President is not getting upset, but they are wrong to be upset because they don’t like President’s that play into stereotypes?  What exactly does this have to do with an oil spill that is crippling the nation?  And who is perpetuating such a stereotype?  Third, which Americans are demanding that Barack Obama show rage?  People of all stripes and colors are looking for a President to stand up and show calm but confident and steadfast leadership, irrespective of the President’s race.  If Barack Obama happened to be purple it wouldn’t make a damn difference.

The race issue is simply devised as a smokescreen by which the left seeks to distract us.  Since the President has done a poor job leading the nation in the wake of the ongoing BP spill, the media pulls the race card to shift the focus away from Obama and towards his critics who after all are all clansmen.  Yet notice again that throughout this Presidency, the only people talking about race are the leftists themselves.

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Click to Play

From Palo Alto, Oaklahoma City, Washington DC, the Gulf Coast of Mississippi, Instanbul Turkey, to The Republic of Georgia, we go totally global this week. But enough about us, here’s our new and improved and by popular request Ricochet podcast index:
0:00 to 9:45  Peter and Rob chat
9:45 to 21:23  Mickey Kaus on his quixotic run for US Senate in California as he battles the unions and pension funds.
22:50 to 37:10  Matt Continetti on his travels to the Republic of Georgia.
39:50 to 1:06:34    Claire Berlinski from and on life in Istanbul. Key phrase: 7 cats.
1:09:30 to 1:33:33  Mississippi Governor Haley Barbour talks about oil in the gulf and catfish in Central Park.
1:33:35 to End    Wrap Up

President Obama has once again shown his lack of judgment, by sending Attorney General Eric Holder down to the Gulf of Mexico to investigate possible litigation. Clearly, the White House has misplaced priorities, instead of sending more engineers and experts, we are sending down trial lawyers to determine possible punitive damages. The President makes time in his daily schedule to appear regularly on television programs, yet his recent trip to Louisiana only lasted a handful of hours. Instead of concentrating on stemming the ongoing oil spill, the Obama administration is opening up a new gusher, full of litigation and trial lawyers. Is this the best President Obama can do to stop the oil spill?

Critics of the amount of golf President Obama has been playing need to look at the bright side: it’s equipped him for a very serious task at hand.

Since he’s shown such pitiful leadership for a president purporting to care about the environment, perhaps he can put his finely-tuned golf skills to the test and stop the oil spill in the gulf.

The New York Times reported that BP now plans to use such things as golf balls to plug the hole and stop the oil from spewing into the Gulf of Mexico.

The lights should be going off above the heads of all the handlers in the White House: the president’s moment of glory has arrived.  He suddenly would be hip and cool again.  Mr. President, we need you to shoot the golf balls into the hole.

If Kosmo Kramer can shoot a ball into the blow-hole of a whale, surely you can land a few in the name of saving the southeast coastal region.  You’d be the hero.  Everything would turn around and your party might not be decimated nearly as badly in November.

Then you can stand up and tell America that you lent your unique abilities to save the day.

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With oil flowing into the Gulf of Mexico for weeks, we’ve known about efforts to stop the flow. We’ve heard details about 75 ton concrete domes, freezing methane gas, catheter piping siphoning off 20% of the flow, top kill. So it at least seems, that round-the-clock efforts were underway from the beginning.

What about the containment side of the problem? We originally heard about oil containment booms and the challenges with deploying them in choppy Gulf waters. However, it then went quiet. We’ve not heard much lately. We’ve held our breath, assuming – or at least hoping – that these challenges have been overcome or worked around. We’ve hoped that critically sensitive areas were being closely monitored and guarded, that contingencies (to utilize booms or naturally or commercially available oil-adherent or oil-absorbent products) had been identified and were ready to be deployed as a last line of defense.

Now we learn that oil is upon us, that beaches are slicked over, that marshes are impacted, that some critical estuaries are lethally inundated. It seems now that our hopes and assumptions have been wrong. Where is the federal government? Is this just BP’s problem? Is this just Louisiana’s problem? Is just another localized economy in shambles, not a problem to the rest of the country, not a concern to the federal government? Is destruction acceptable if it furthers an agenda?

What happened to the last line of defense?

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One week ago, I shared the text of a message Interior Secretary Ken Salazar sent to all employees of his department two weeks after the BP Deepwater Horizon disaster began in the Gulf of Mexico. It was provided to me by a friend who works for DOI.

Today, I share the text of his most-recent “Secretary’s Priority Message” about the ongoing disaster which includes some decidedly anti-Big Oil rhetoric. See if you can spot it below:

From: Secretary_of_the_Interior@ios.doi.gov [mailto:Secretary_of_the_Interior@ios.doi.gov]
Sent: Tuesday, May 11, 2010 2:16 PM
Subject: Secretary’s Priority Message – Deepwater Horizon

( NOTE TO SUPERVISORS: Please ensure that all employees without e-mail access receive a paper copy of this distribution.)

Dear Team,

I write to thank you for your hard work and service to our Country. Over the last 21 days, many of you have put in long hours, with little sleep, as you help our Nation respond to the Deepwater Horizon tragedy and spill. I extend my heartfelt appreciation.

As we continue to work hard to address and resolve the oil spill in the Gulf, we must not hesitate from making changes and reforms we know are needed. This incident has made it clear that the public servants of the Minerals Management Service deserve more tools at their disposal, more resources, and an organizational structure that fits the missions that you are being asked to carry out. I am proud of the reforms we have already made together – from broadening MMS’s portfolio to include offshore renewable energy production to simplifying royalty collections – but the time has come to make even more fundamental reforms.

Earlier today, I announced to our colleagues in the MMS a set of changes that we as a Department must undertake to strengthen our oversight of the companies that develop energy in our Nation’s waters.

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In an e-mail message to employees two weeks after an explosion rocked BP’s Deepwater Horizon drilling rig in the Gulf of Mexico, Interior Secretary Ken Salazar continued parroting the Obama Administration lines about “being on the job from Day One” and about BP being responsible.

“From day one, we have been anticipating and preparing for the worst case scenario,” Secretary Salazar writes in the e-mail’s opening paragraph. “Thirteen days into this event, the situation is still dangerous.”

I find it telling that the action words in Secretary Salazar’s message are “anticipating and preparing” instead of acting, fixing, resolving or, if he had wanted to be honest — hoping.

In the fourth paragraph, he writes, “BP has a massive oil spill for which they are responsible,” —–even though no official investigation report has reached that conclusion.

Below, I share the full text of the message:

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From the Associated Press:

WASHINGTON (AP) – Suddenly, everything changed.

For days, as an oil spill spread in the Gulf of Mexico, BP assured the government the plume was manageable, not catastrophic. Federal authorities were content to let the company handle the mess while keeping an eye on the operation.

But then government scientists realized the leak was five times larger than they had been led to believe, and days of lulling statistics and reassuring words gave way Thursday to an all-hands-on-deck emergency response. Now questions are sure to be raised about a self-policing system that trusted a commercial operator to take care of its own mishap even as it grew into a menace imperiling Gulf Coast nature and livelihoods from Florida to Texas.

The pivot point had come Wednesday night, at a news conference at an oil research center in the tiny community of Robert, La. That’s when the nation learned the earlier estimates were way off, and an additional leak had been found. (more…)