Crony Capitalism

Update: Gas Tax Hike Not Supported by Oil Industry Honcho—If It Subsidizes Pipeline Construction

NOT an outrageous example of crony capitalism after all.

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Pipeline Construction
PBS

UPDATE/CORRECTION: Never mind.**

Earlier I blogged:

File this under you've got to be kidding me! NBC News is reporting that the American Petroleum Institute president Jack Gerard said that his organization might be in favor of higher gasoline taxes if the funds were used to subsidize the construction of oil and gas pipeline and/or upgrade railroads to help transport crude. From NBC News:

In a conference call with reporters this week, the American Petroleum Institute, the oil and gas industry organization that normally embraces market-based energy policies, said it was neutral on the idea of hiking gas taxes.

API president Jack Gerard told reporters that the lobbying group "never opposed" a gas tax hike, but argued that policymakers needed to look beyond just funding road and bridge projects.

He added that the U.S. energy boom raised the necessity for oil and gas pipelines should also benefit from an infusion of federal funding, leaving open the prospect that the API could back a hike in the gas tax.

"We do believe we should look at infrastructure beyond the historic ways of viewing it for bridges and roads and say to ourselves, what about pipelines?" Gerard asked. "What about rail build-out? What about that other infrastructure necessary to make our market more efficient as an energy producer, an energy superpower?"

I really really hope* that this is a misquote instead of another sad example of creeping crony capitalism.

UPDATE/CORRECTION:

*My hope has been fulfilled. The folks at API sent along their request to NBC to make a correction based on the transcript of API president Jack Gerard's remarks. Gerard was not asking for subsidies, but contrasting the job creation possibilities of spending on public infrastructure spending versus the job creation possibilties of private spending on energy-related infrastructure.

**Quoting Emily Litella.

See below.

From the transcript as sent by API:

 Well, it might surprise a lot of you that in the past, API has not taken a position on the gas tax.  In fact, for those who propose increasing it for highway building and funding, et cetera, we've never opposed that. (emphasis added)  We believe it's a matter of public policy; if the government believes that's the way to generate revenue to build the infrastructure that those cars drive on, the bridges they cross, et cetera—we haven't really entered into that debate.

 But I think, Nick, it raises another point that's very important.  That is when you look at the highway bill, the breadth and scope of it, as a nation—and this is part of my earlier comments about the American moment—as a nation, we already always focus on that highway bill as a major jobs creator, infrastructure (spend), which it is.  But if you look at the potential private investments from the oil and natural gas industry, over the next decade, reports have concluded we could spend as much as $1.15 trillion in infrastructure (bill). (emphasis added) Private sector dollars, capital investment combined with what they're doing on public projects like infrastructure, highway bills, this is a great opportunity for the country, particularly in these tough economic times. 

So, while we don't take a position on the gas tax, Nicks, we—Nick, we do believe we should look at infrastructure beyond the historic ways of viewing it for bridges and roads and say to ourselves, what about pipelines?  What about rail build-out?  What about that other infrastructure necessary to make our market more efficient as an energy producer, an energy superpower?

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21 responses to “Update: Gas Tax Hike Not Supported by Oil Industry Honcho—If It Subsidizes Pipeline Construction

  1. I’m okay with a tax increase if the money goes to me.

    1. Worst part is he’s cutting his own throat; higher taxes reduces sales in the long term.

  2. Why should those guys be forced to invest their own money to bring their products to market?

    This is America, dammit!

    1. *Tony nods approvingly*

  3. “I really really hope that this is a misquote instead of another sad example of creeping crony capitalism.”

    Creeping?

    Philip Morris has been trying to get the FDA to regulate tobacco for nearly 2 decades. Hell, i’m pretty sure they also supported the rules against ‘flavored’ cigarettes and threats to ban Menthol that scare the shit out of Lorillard investors…if only to make them a cheaper company *to buy*. Regulatory Capture is like phase 5 of Contemporary Cronynomics. Next, large industrials will probably insist on Green Energy to power their factories just to get someone else to pay for it.

    1. “Contemporary Cronynomics”

      Is that going to be offered at my local Community College (for “free” of course)?

      1. +2 for thematic consistency

  4. the American Petroleum Institute president Jack Gerard said that his organization might be in favor of higher gasoline taxes if the funds were used to subsidize the construction of oil and gas pipeline and/or upgrade railroads to help transport crude.

    Why would the construction of pipelines or infrastructure improvements need subsidies? If the pipeline itself is worthy of investment, it must be because the expected return on investment is high enough compared to opportunity costs. The upgrading of railroads represents capital expenditures with an expected improvement in production and return of capital. If these expenditures are not profitable by themselves, then they’re not worth the expense. Period.

  5. Is everybody a rent-seeker?

    Just about. Integrity is a character trait that is hard to find.

    1. After a certain middlish height, going up the money/power ladder puts integrity in the same category as hen’s teeth.

      1. I propose nukes. From orbit. It’s the only way to be sure.

  6. Rent seeking in the energy industry?
    Where’s my fainting couch?

  7. I agree that Miguel `s st0rry is flabbergasting, last saturday I got a new Lotus Esprit from earning $8938 this past 4 weeks and would you believe, ten/k last-month . without a doubt it is the most comfortable work I’ve had . I began this 4 months ago and pretty much straight away was bringin in minimum $86… per-hr . Visit Website ~~~~~~~~ http://www.jobsfish.com

  8. Who was it that said a democracy only lasts until the people realize they can vote themselves money?

  9. API president Jack Gerard told reporters that the lobbying group “never opposed” a gas tax hike, but argued that policymakers needed to look beyond just funding road and bridge projects.

    He added that the U.S. energy boom raised the necessity for oil and gas pipelines should also benefit from an infusion of federal funding, leaving open the prospect that the API could back a hike in the gas tax.

    Rent-seekers gonna seek rents. Shocking.

  10. Whenever I see something like

    “the American Petroleum Institute president Jack Gerard said”

    I think of this.

    People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

  11. 1) gas tax money already is supposed to be for infrastructure. If ours is crumbling, as the left insists, what happened to all that money?
    2) raising the gas tax becomes a back door means for the continuation of fracking, whose viability businesswise is impacted by the price of oil.

  12. I just crunched some numbers that might interest you. The NJ Transportation Trust Fund is funded solely by the state gas tax and highway tolls. From 2009 to 2013 (the most recent data I could find), it spent about the same amount on highways as on NJ Transit projects. NJ Transit runs a yearly deficit of $1.6 billion.

    To understand the opportunity cost of this deficit, consider that it cost $1.3 billion to build 432 Park, which is now the tallest building in New York City if you don’t count the spire on the Freedom Tower. We could build a new 96-story skyscraper every year next to existing train stations so that commuters would be at work there instead of taking the train to get to work there.

    Yes, the NJ agency in charge of mass transit is so bad that it is more efficient to move the skyscraper to Mohammed than to move Mohammed to the skyscraper.

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