Dumping Money On the Ground

When I worked for Avis, we were required to take a class on responding to fuel spills.  The district manager said that since I had worked in and been around the oilfield when I was younger, I probably didn't need to take the class.  I told him that unless the proper response to a spill was to throw some dirt on it, I'd better take the class.

When I visited my grandparents for the summer when I was about 7, I went to work with my Grandpa Tom in the oilfield.  When the tanks are full, he would have to hire a truck to come out and haul all the oil to his buyer.  Since the cost of having the truck come out is the same no matter how much oil they haul, you would of course want to have as much oil as possible be taken in a trip.  A tank could be full, but still have a lot of saltwater in with the oil.  Oil sits on top of the saltwater (think oil spill in the Gulf, the oil stays on top). So, there was a valve on the bottom of the tank.  Grandpa would open this valve and let the saltwater spray out onto the ground.  It was my job to sit beside this spraying valve and watch for the saltwater to turn into oil.  Grandpa would go do his maintenance on the pumpjack or whatever else he needed to do.  I didn't want to let any oil spray out, that would be just like throwing away money.  So I sat staring at the brownish saltwater spraying, waiting it for it to change from coffee with cream color to coffee with no cream color.  When oil started spraying out, I would yell for Grandpa and he would close the valve to let the well produce for a couple of more days to maximize the truck's load of oil.  It was a great practice economically, but probably not so great environmentally.  Oily saltwater leaves an ugly mess on the ground.  

I think even the most environmentally insensitive oilman sees this as a bad practice today.  So, to a degree regulations were needed.  But, as is usually the case with government involvement, they went too far the other direction.  And if the federal government is involved, they will go waaaaaaaaaaaay too far.  And then go further.  And take a minute's break and go a little further.  Eventually they go so far that the producers do not make enough money to stay in business.  The Democrat/Progressive side seems to forget that the reason oil companies exist is to make a profit.  And in most cases, they will do it the right way, both for their profit margin and for the environment.  

Eighteen governors, two of them Democrats, have asked Congress to clamp down on the EPA.  They say that the EPA doesn't take the economic impact of their rulings into consideration when they impose new restrictions.  They have reached the point in some cases, where it is no longer profitable to stay in business.  As I mentioned in yesterday's post about the Grand Junction area, trickle down works in both directions.  When business is booming for the oil company, it is booming for the construction industry, the fast food industry, grocery stores, retailers, and yes, the government through sales, income, and property taxes.  Ever notice all the new schools, libraries, and jails get built during the boom years?  Then the EPA steps in with new regulations, and end the boom.  For everyone.  Including the government.  

I don't know if the current Congress has the spine, or even the inclination to stand up to the President and his anti-business policies.  But it is nice to see that the states are starting to push back.  Over the past 100 plus years, the states have let the federal government take too many of the powers the Constitution relegated to the states.  It will be very hard to get those powers back.  But it sure is good to see the process start.  Not only in the case of the EPA, but Utah has filed suit to prevent the federal government from taking more land and to try to take back the area that President Clinton took by executive action in his last days in office (southern Utah, rich with uranium, imagine that).  Montana, Texas, and others have filed or threatened to file suit over federal gun control laws.  Texas, Virginia, and others have started the process of challenging federal takeover of healthcare.  And with the recent verbal jabs by Supreme Court Chief Justice John Roberts at the president, I think the Supreme Court is signaling that it is ready to reign in some of the federal power grabs.  

Maybe the Supreme Court is that seven year old watching money spray out onto the ground.  It's time to shut off the valve. 

Public Lands, Hope, Change, Hope It Changes!

When we first moved to Arizona in the 90's, one of the first things I noticed was all the public land.  We went all over the north and central part of the state, hiking, camping, and taking day trips.  Coming from Texas, I couldn't believe that you could do so much travelling without coming to a fence, locked gate, or No Trespassing sign. 

As someone who loves to camp, hike, and practice outdoor photography, I really enjoy the access to all the wild areas of the state.  Colorado also is home to large amounts of federally controlled land.  Take a look at the maps of the three states above.  Any part of that map that is not white is owned in some way by the federal government.  I'm not sure what percentage of Colorado and Arizona are federal land, but it is well over 50%.  Texas is just under 2%.  I read that Utah is over 90%, and Nevada is 98%!  I think the only part of Nevada not controlled by the government must be Las Vegas.  No wonder President Obama seems to hate Vegas! 

Recently the President used an executive order to "protect" parts of western Colorado to preserve habitat for wild horses.  Who doesn't want to protect the habitat of wild horses?  I don't know how he finds time for all his interests.  What with running Government Motors, Chrysler, all those banks, Fannie Mae, Freddie Mac, controlling excessive insurance company profits, and getting healthcare legislation passed in spite of the fact that most Americans don't want it.  I bet he watched the Disney movie Spirit, with his daughters last weekend.  And they said, "daddy, you've got to make sure those poor horses have a place to live!"  You know how persuasive little girls can be.  He probably looked at a map and figured that western Colorado would be a good place for some mustangs, I bet he watched an old Ronald Reagan Henry Fonda western that mentioned horses in Colorado. 

Surely it wouldn't be because of the shale deposits in the area that he decided to limit private company's access?  You know the shale that energy companies can extract clean burning, efficient natural gas from?  The same energy companies that would provide hundreds of high paying jobs to people who would then buy houses, cars, healthcare insurance, and pay taxes.  That's what President Reagan called "trickle down economics."  It does work.  It's the only thing that does work.  The problem that President Obama and his progressive friends have with trickle down economics is that private companies are making money.  And deciding for themselves how to spend it. 

I travelled regularly in the Grand Junction area last year and listened to a local radio station frequently.  They started with stories about tighter regulations on drilling in the area, making it more expensive to extract the natural gas, which was going down in price at the same time.  Then, later in the year, Haliburton announced that it was discontinuing operations in the area and laying off hundreds of employees.  Home construction in the area that had been booming for over a year, suddenly slowed to a crawl.  Construction workers that had been spending a good portion of their paychecks in the local stores moved on to jobs in other parts of the country (probably Texas with all its non-federal land).  Guess what?  Unemployment went from 3.5% in the summer of 2007 to 4.5% in January 2008 to 9.4% in today's report.  Oh yeah, with all those evil energy companies, their well-paid employees and their paychecks going elsewhere, sales in the area stores dropped dramatically, forcing more layoffs.  And to make matters worse, the drop in sales brings a drop in sales tax revenues.  So now the local governments are feeling the pain too.  Only the government could screw things up this bad and this quickly.  

So, the obvious solution?  Restrict development in the region even more!  Not what you would've thought?  Well, then you are obviously not a mustang loving Harvard graduate.  

To steal a line from Sarah Palin, "How's that hope-y change-y thang working out for ya now?"