- The Washington Times - Wednesday, January 17, 2007

As the 100-hour legislative blitz continues, the House will vote today on the Democrats’ energy policy, which turns the economic laws of supply and demand on their collective heads, while hurling a dagger at contract law and scoring a direct hit. It will be quite a show.

Here’s where the nation stands. Thirty-five years ago, in 1972 (the year before the Arab oil embargo, which Iran, America’s ally at the time, helped to alleviate), the United States produced 9.4 million barrels of oil per day and imported 28 percent of the petroleum it consumed. Nearly half of those imports (12.6 percent of total consumption) came from OPEC. In 2005, the United States produced 5.1 million barrels of oil per day and imported 60 percent of the petroleum it consumed. Nearly half of those imports (26.6 percent of total consumption) came from OPEC. With Iran and Arab states controlling 70 percent of the world’s proved oil reserves, the smart thing to do would be to reduce our dependence on these nations for oil by raising our own output.

Democrats say they agree that America should become less dependent on foreign sources for our energy. They just don’t want to increase U.S. output of oil and gas. How do we know? Well, a decade ago President Clinton vetoed legislation that would have permitted oil and gas production in the promising Arctic National Wildlife Refuge (ANWR); overwhelming majorities of Democrats in Congress have consistently voted against oil and gas development in ANWR; and now House Democrats are poised to raise taxes and royalty fees on companies that have invested billions of dollars searching for oil and gas in the relatively small areas of the Outer Continental Shelf where Democrats have permitted exploration.

Compounding their aversion to domestic production, Democrats now want to add disincentives that will deter oil producers from searching for oil and gas in the future. A big item on the Democrats’ energy agenda involves a “conservation fee” that will be imposed on oil and gas companies that signed contracts in 1998 and 1999 with the Clinton administration’s Interior Department, which neglected (through no fault of the oil companies) to include a clause requiring royalty payments if prices rose above $35 per barrel. Failure to pay the fee would bar the companies from future leases. Thus, Democrats want to subvert contract law by using strong-arm tactics that would warm the heart of Russian President Vladimir Putin. At least Mr. Putin, in seizing resources from criminal oligarchs, could have argued that he was merely retrieving what had literally been stolen from the Russian state through fraud. The Democrats can make no such claim against the innocent businesses they are about to financially molest. And consumers will pay for it.

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