Republican Hypocrisy of Resource Subsidies: See, "Fracking"

The people responsible for the boom in fracking/shale gas openly admit that without government assistance, the technologies would not have been developed. Why is it that the Republicans rant on and on about the government "staying out of renewable energy and letting the market sort it out" when they support fracking and big oil subsidies? Holy hypocrisy.



http://news.yahoo.com/decades-federal-dollars-helped-fuel-141648115.html

PITTSBURGH (AP) -- It sounds like a free-market success story: a natural gas boom created by drilling company innovation, delivering a vast new source of cheap energy without the government subsidies that solar and wind power demand.

"The free market has worked its magic," the Barnett Shale Energy Education Council, an industry group, claimed over the summer.

The boom happened "away from the greedy grasp of Washington," the American Enterprise Institute, a think tank, wrote in an essay this year.

If bureaucrats "had known this was going on," the essay went on, "surely Washington would have done something to slow it down, tax it more, or stop it altogether."

But those who helped pioneer the technique known as hydraulic fracturing, or fracking, recall a different path. Over three decades, from the shale fields of Texas and Wyoming to the Marcellus in the Northeast, the federal government contributed more than $100 million in research to develop fracking, and billions more in tax breaks.

Now, those industry pioneers say their own effort shows that the government should back research into future sources of energy — for decades, if need be — to promote breakthroughs. For all its success now, many people in the oil and gas industry itself once thought shale gas was a waste of time.

"There's no point in mincing words. Some people thought it was stupid," said Dan Steward, a geologist who began working with the Texas natural gas firm Mitchell Energy in 1981. Steward estimated that in the early years, "probably 90 percent of the people" in the firm didn't believe shale gas would be profitable.

"Did I know it was going to work? Hell no," Steward added.

Shale is a rock formation thousands of feet underground. Among its largest U.S. deposits are the Marcellus Shale, under parts of Pennsylvania, New York, Ohio and West Virginia, and the Barnett Shale is in north Texas. Geologists knew shale contained gas, but for more than 100 years the industry focused on shallower reserves. With fracking, large volumes of water, along with sand and hazardous chemicals, are injected underground to break rock apart and free the gas.

In 1975, the Department of Energy began funding research into fracking and horizontal drilling, where wells go down and then sideways for thousands of feet. But it took more than 20 years to perfect the process.

Alex Crawley, a former Department of Energy employee, recalled that some early tests were spectacular — in a bad way.

A test of fracking explosives in Morgantown, W.Va., "blew the pipe out of the well about 600 feet high" in the 1970s, Crawley said. Luckily, no one was killed. He added that a 1975 test well in Wyoming "produced a lot of water."

Steward recalled that Mitchell Energy didn't even cover the cost of fracking on shale tests until the 36th well was drilled.

"There's not a lot of companies that would stay with something this long. Most companies would have given up," he said, crediting founder George Mitchell as a visionary who also got support from the government at key points.

"The government has to be involved, to some degree, with new technologies," Steward said.

Congress passed a huge tax break in 1980 specifically to encourage unconventional natural gas drilling, noted Alex Trembath, a researcher at the Breakthrough Institute, a California nonprofit that supports new ways of thinking about energy and the environment. Trembath said that the Department of Energy invested about $137 million in gas research over three decades, and that the federal tax credit for drillers amounted to $10 billion between 1980 and 2002.

The work wasn't all industry or all government, but both.

One step at a time, the problems of shale drilling were solved. Crawley said Energy Department researchers processed drilling data on supercomputers at a federal lab. Later, technology created to track sounds of Russian submarines during the Cold War was repurposed to help the industry use sound to get a 3-D picture of shale deposits and track exactly where a drill bit was, thousands of feet underground.

"It was a lot of pieces of technology that the industry thought would help them. Some worked out, some didn't," Crawley said.

Renewable energy has had similar fits and starts, plagued by the costs and complexities of developing technology, and markets for it.

The idea that the government can help industry achieve advances that the private sector can't or won't has been a central contention of the presidential election. President Barack Obama's comment this summer that Republicans seized on — "If you've got a business — you didn't build that" — was part of broader comments about infrastructure, education and other public spending that indirectly helps businesses.

Both Obama and Republican presidential nominee Mitt Romney tout the benefits of shale gas, but they differ over the government's role in subsidizing energy research. Obama has suggested continued funding for renewable energy but also eliminating billions of dollars in subsidies for oil and gas companies. Romney calls that an unhealthy obsession with green jobs — and has vowed to cut wind power subsidies, yet keep federal support for ethanol.

But the fracking pioneers point out that it's impossible to predict how and when research will pay off.

"It wouldn't be research if you already knew that it was going to be effective," said Crawley.

Steward and others said today's energy challenge is similar to what they faced: a need to find future sources of energy.

"I was concerned about my kids and grandkids. I didn't want my kids sitting out there without energy," Steward said.

Terry Engelder, a Penn State University geologist known for his enthusiastic support for gas drilling, is proud that work he did decades ago helped to lay the groundwork for today's boom. But he said the story of how shale gas went from longshot to head of the pack — and how long that took — shows that serious support for renewable energy research makes sense, too.

"These renewables have a huge upside," Engelder said. "In my view, the subsidies are really very appropriate."

Engelder, who's been both praised and criticized for his support of shale gas drilling, said he's sure that research and technology will ultimately deliver innovations that make renewables a major force.

"There's no doubt about it," he said, adding that "the payout might not happen until 2042."

Steward is proud of the shale boom, too, but warned that it won't last forever.

"Don't be fooled by this. We've got to have a replacement" for shale gas, he said.

 

In the energy field 100 million is a drop in the bucket. It takes 200 million just to find and get to the start of pumping from one ocean oil well. The large companies involved can certainly do without 100 million to start fracking but thanks for proving again that larger government serves your purpose of defending the wasting of taxpayer dollars.

 

Billions in tax breaks is the equivalent of handing them billions of taxpayer dollars.

Thanks for trying.

 

Its just amazing isn't it. You show proof to the GOP(that the gov't helped out) and they will do anything to keep from admitting that truth. I just wonder why? This kind of entertainment is why we have two political comedy shows.........Stewart and Colbert.

 

It takes a certain nimbleness of the mind to perfect double think to this level.

 

RegardingTax breaks: Tax breaks aren't a government subsidy and is not government "funding' an endeavor. A tax break is when a person can use their own money and own profits for business expenses, research and development, and risk adventures.

If a person starts a business and accounts for business expenses on the tax return---this isn't an example of government funding or building that persons business..

 

This makes no sense at all.. Fracking has been around since the 1940s.

 

So then why is Mitt Romney calling people who aren't paying federal income taxes victims and moochers? All of those soldiers, retired people, and working poor?

A tax break adds to the national debt in the same way that a subsidy does. Stop pretending it doesn't.

 

Government taxes what it wants to oppress and subsidizes what it wants to promote. Letting companies re-invest their own money is just smart. The left thinks that all of this COMES from government when in reality it is ALLOWED by government not dipping into other pockets. There is a difference but I bet the subtlety is lost on some.

 

Allowing people to keep money that is owed to the government increases the debt in the same way that spending does; you can't have it both ways.

 

When government began the income tax they realized they could increase government coffers immensely and their lust for other people's money has never decreased as their spending increased by huge amounts from revenues. I would suggest reigning in spending first because the more you give the government the more they spend plus some.

 

How are people being "allowed" to keep money that is owed to the government?

 

By giving huge subsidies and tax breaks to oil and fracking companies.

Herp derp.

 

Who are all these Republicans that support fracking and big oil subsidies?

 

Didn't the Halliburton founder get into that way back then? I'm too lazy to google, maybe you know.

 

You're kidding, right? Remember when Democrats wanted to end big oil subsidies and Republicans, in an attempt to suck off Grover Norquist, wouldn't agree because that wouldn't be "revenue neutral?"



"Washington (CNN) -- Senate Republicans on Thursday blocked a Democratic measure championed by President Barack Obama to end tax breaks for the major oil companies.

The procedural vote of 51-47, which failed to reach the needed threshold of 60 in favor, killed the measure, which was given little chance of eventually winning approval in the Republican-controlled House. Four Democrats opposed the bill while one Republican supported it"

http://www.cnn.com/2012/03/29/politics/oil-subsidies/index.html

 

So any and every penny you earn, and that government lets you keep........

.......is the equivalent of government handing you every penny you have ever "earned".....

.
.

 

Why are you complaining about people who pay no federal income taxes then?

 

Why are you (D)eflecting?

Is the money the government lets you keep...The Fruit of your Labor....the equivalent of a government handout?
.
.

 

LOL.... I see the problem. You don't know the difference between a tax break and a subsidy.

 

You're hilarious. You don't know the difference between a tax break and a subsidy, and think that somehow losers who don't pitch in and pay federal income tax is somehow equivalent to companies that employ large amounts of people, provide products and services.

You should be grateful people are still willing to waste their time with your nonsense.

 

Either it's patriotic to pay no taxes like many of those companies or it's not. Pick one, champ.

 

It's the same thing; it takes money out of government coffers in an effort to stimulate a particular industry.

 

Debt is incurred through spending. Duh...that should be obvious, especially for an educater. A subsidy...when governments allots money to an industry from the government accounts payable---is SPENDING!

Control the spending first---nip that in the bud and them we will worry about how to dig ourselves out of the hole.

 

You mean, cut spending to poor people, keep subsidies and tax cuts to the rich, and then increase the money you give back to the wealthy, ensuring we never dig ourselves out of that hole.