One of the most interesting points that Governor Palin brought up in her interview with Brett Baier last Friday was that Obama’s proposal to decrease or eliminate the $4 billion in subsidies for oil and gas companies would negatively impact independent oil producers and explorers rather than Big Oil. It was interesting because I haven’t heard any other high-profile Republican articulate that one of the reasons why we shouldn’t just go along with Obama’s proposal to end the oil subsidies is because independent and smaller oil companies, rather than Big Oil, will be hurt if these subsidies are taken away. Quite frankly, Brett Baier missed an opportunity to go deeper into this issue during his interview with the Governor as she may have just come up with the best argument our side can use to fight Obama’s proposal to take away the $4 billion in subsidies.
One of the reasons why other Republicans haven’t used Governor Palin’s argument is that they simply do not understand the oil and gas industry. They don’t have the same level of experience that Governor Palin does in dealing with oil companies and probably don’t comprehend that tax incentives and subsidies don’t impact all oil and gas companies the same way. Unlike Governor Palin, hacks like Romney and Pawlenty, con-men like Trump and Huckabee, and space cadets like Bachmann have been unable to explain how the oil industry works in a way that goes beyond trite and tired talking points.
Today, Democrat Martin Frost effectively conceded that Palin’s analysis of the oil industry was correct. Here’s the video courtesy of PalinTV (transcript included with emphasis added). Smart Republicans will start using the argument that Governor Palin introduced during her interview with Baier about the deleterious impact that eliminating such subsidies will have on independent oil and gas producers. Please help us spread the youtube video and this post as the liberal media and certain elements of the conservative media will try their best to ignore what we have presented.
[videoplayer file=http://www.youtube.com/watch?v=nzve55NwruQ width=560 height=315 /]
Palin: As for the government subsidies that we’re hearing Obama flirting with right now in wanting to decrease those or eliminate those, we’re only talking about four billion dollars. Compare that to the fourteen trillion dollar debt that he, our President, has certainly contributed to and four billion dollars is a drop in the bucket and he shouldn’t assume that the four billion dollars is going to affect Big Oil. No, it’s the independent explorers that we want out there with their entrepreneurial spirit and their manpower and their job creating ability to be out there exploring and then responsibly exploiting and extracting our god-given natural resources.
Frost: I’m a supporter of the President’s. I’m concerned that he’s going to lose credibility on this oil and gas issue because he’s not telling the truth entirely. What he is saying is that you need to eliminate four billion dollars worth of tax breaks for major oil companies because major oil companies have obscene profits. The problem with this is that one of the big tax breaks that he’s citing -intangible drilling costs- excuse me -percentage depletion- was repealed by Congress, excuse me, in 1975, 36 years ago, as it affects major oil companies. The only ones that get percentage depletion anymore are domestic independents who drill most of the wells in the United States and employ four million people. Now the press doesn’t do a very good job of covering oil and gas tax issues. They don’t understand them. But if the press ever picks up that the President is not telling the truth about the depletion allowance, that it doesn’t go the major oil companies, he’s going to have additional problems, I believe, in the polls.
Palin: Again, you have to remember that President Obama, and I’m going to say this with all due respect to the office of the Presidency, he doesn’t know what he’s doing when it comes to energy. He does not know, as I just pointed out, that the four billion dollars that he thinks he’s gonna stick it to Exxon, BP, Conaco Phillips that no, it’s going to be the independent producers, the explorers that we want out there creating jobs that are going to be hit with an end of subsidy.