Editorial Comment

	Vol. 224 No. 7
THOMAS R. WRIGHT, JR.,  PUBLISHER

Hypocrisy or ignorance? Republicans (and Libertarians) generally believe that government should leave businessmen and consumers alone to govern their own affairs, and that politicians should not be in the business of micromanaging the economy. But for Republican politicians, at least, any resemblance between rhetoric and policy seems purely coincidental. That’s because the Energy Policy Act of 2003 that recently passed the US House of Representatives is true folly. As Peter VanDoren and Jerry Taylor of the Cato Institute so aptly stated, “the only real disagreement between (Republicans and Democrats), at least when it comes to economic policy, is which group of Peters ought to be robbed and which collection of Pauls ought to be awarded a place at the government trough.”

The GOP saw fit to force companies to add renewable fuel (ethanol made from corn) to gasoline. Ethanol is three times more expensive to produce than gasoline – which is why it has to be mandated upon an unwilling fuels industry – and it can’t be shipped in pipelines used for standard gasoline. This makes ethanol even more expensive and renders the nation more vulnerable to occasional regional supply shocks. But it’s made from corn.

The (so-called) Republicans also chose to expand the government-owned and operated Strategic Petroleum Reserve to one billion barrels. VanDoren and Taylor assert that a public inventory undermines the incentive for private inventories, and that political control over inventories increases, rather than decreases, risk in petroleum market operations and encourages more, not less, price volatility.

Republicans also created a tax deduction for small refiners that comply with new diesel fuel sulfur rules. If the GOP thought the rules were too costly, they should have repealed them. Going this route, however, gives an advantage to inefficient small corporations and blurs the true cost of environmental regulations. Another tax credit was established for small oil and natural gas producers to increase domestic production. In the strictest sense, it’s silly to prefer greater domestic production from small companies than from large ones. Besides, energy prices are set in world markets, regardless of how much the US imports. Fewer imports make the US no less vulnerable to petroleum market shocks.

Finally, just to make sure that “no lobbyist is left behind,” the Republicans even managed to extend the tax credit for electricity generated by so-called renewable fuels through 2007. VanDoren and Taylor are convinced that renewable energy as a major source of electricity is a pipe dream, since wind power and solar energy, because of their natural variability, require fossil fuel backup. Therefore, they cannot replace coal, nuclear or natural gas alternatives. If wind and solar were economically competitive, they wouldn’t need the subsidy in the first place.

It could be argued that the Energy Policy Act of 2003 represents the sheerest hypocrisy, since it flies in the face of everything Republicans allege to stand for. But that would presuppose that Republicans are consciously saying one thing while doing another. VanDoren and Taylor say their conversations with Republican office-holders suggest that the GOPers scarcely understand the implications of their rhetoric about limited government and are thus incapable of hypocrisy. “They are, however, capable of intellectual incoherence, and that’s what we have here.”

Good job. Your local TV station or newspaper likely didn’t report the exemplary environmental and safety performance of several companies and individuals which was recognized recently by the US Department of Interior’s Minerals Management Service. Thus, we feel it is important to name those who were cited as “the best in the oil and natural gas industry” in terms of industry excellence, outstanding leadership, safety and achievements in pollution prevention.

The awards program recognizes companies that not only meet tough environmental regulations but exceed them. They set the standards for the future and help preserve and enhance the quality of life while meeting US energy needs.

The Corporate Leadership Award (CORLA) is given to individuals that have worked closely with MMS to improve revenue collection and processes for offshore development. 

The 2002 CORLA winners include frequent World Oil author and coiled tubing authority Alexander Sas-Jaworsky II, SAS Industries, Katy, Texas; plus Steve Adamcik, El Paso Pipeline Group, Houston; Mike Bell and Terry James, Unocal Deepwater USA, Sugarland, Texas; Steve Brooks, Exxon Mobil, Houston; Mark Davis and Steven Whiteside, Shell Offshore, Houston; David T. Deal, American Petroleum Institute, Washington, D.C.; Mike Faulise and Steve Smetana, Shell E&P Company, Houston; Donna M. Hurley, ExxonMobil Production, Houston; Craig Landry, Ocean Energy, Houston; Gerald Macey, EnCana Corp., Houston; Mark Schindler, Lynx Enterprises Inc.; Ron McCaslin and Jeanne Smith, Devon Energy, Houston; Tammy Naron, Apache Corp., Houston; Wanda June Parker, WJP Enterprises, Plano, Texas; Joseph Peschier, Island Operating Co., Houston; James P. Ray, Shell Global Solutions (US), Houston; Brian Russo, Affiliated Computer Services, Inc.; Larry Smith, Oil States Industries Inc., Houston; and Maralene Spawn, Burlington Resources Oil and Gas Co., Houston.

The Safety Award for Excellence (SAFE) recognizes outstanding safety and pollution prevention achievement by offshore oil and gas operators and contractors. The Minerals Revenues Stewardship Award recognizes companies that demonstrate exceptional compliance with revenues laws and federal financial requirements.

The 2002 SAFE Award winners were ExxonMobil, Hunt Petroleum (AEC), ENSCO Offshore Co. and Texas Island Operating Co. The 2002 Mineral Revenues Stewardship Award winners were Conoco Inc. and Red Willow Production Co. and Kennecott Energy Co., both in Montana.

And finally, the Safe Operations and Accurate Reporting (SOAR) is presented to the best of the best in industry that have demonstrated the highest commitment to safety, stewardship and resource management. The 2002 SOAR Award went to Dominion Exploration & Production Inc., of Houston.