It’s the middle of the night and this will probably be a rambling incoherent diary, but I can’t sleep, so I am going to rant.
I am so fucking angry over the BS about drilling here to lower prices and boost the economy and blah blah blah!
I live in Long Beach, CA. We have both on shore and off shore oil drilling. In fact, our oil Islands are dressed up very prettily; many out-of-towners think they are resort islands.
Gas prices here are still in the $3.50/gallon range for regular, the same as every other SoCal city. So immediately, you can throw out the notion that drilling here will reduce gasoline prices.
Still, you would think that with oil prices sky high, the city should be rolling in dough. You would also be wrong. Our city budget has not ballooned, nor are we sitting on top of a huge surplus (unlike the oil companies). How do I know? There was just a huge uproar because our main library was on the verge of being closed due to budget restrictions. And I just got a notice that city run utilities fees are going up 40%. That and my own 10% pay cut kind of clued me in to the fact the city budget isn’t in such great shape. In fact, our Assemblywoman just got the state legislature to pass a bill to expand the oil drilling by 40% over the next ten years to boost both local and state revenues.
The rant will begin in earnest across the break…
I don’t know what sort of revenue sharing plan the city has with developers and the state. I’ve tried to find out how it works, but there seems to be a pretty thick veil over the whole business. Or maybe I just didn’t know where to look. Anyhow, the new bill is supposed to boost city revenues by $130 million over 10 years with an additional $150 million going to the port and $200 million to the state. If that’s a 40% boost, then we have got to be getting somewhere around $32 million a year right now [(130/10)/0.4=32]. Regardless of the particulars, that is a lot of cash. But I bet it is nothing compared to what the oil companies are making off the oil.
Before I started looking into it, my suspicion was that the energy companies pay the city and state a fixed rate to extract the oil regardless of the price of a barrel of crude. So while the oil companies make their record profits off of the oil extracted from my city’s property, the city is being paid the exact same amount it always has been paid. Thus, no budget explosion, no huge surplus.
One thing I was able to find as I searched to see if my suspicion was right or wrong is something called an Oil Producers Tax (OPT), which is a per barrel tax. Last year, the city increased the OPT from $.15 per barrel to $.40 per barrel. Are you kidding me? 40 cents per barrel? The extra 25 cents per barrel will generate about $3.8 million per year and is earmarked for the police, fire, and other public safety departments exclusively.
Clearly the OPT isn’t the only oil revenue the city generates, but since the city coffers have not expanded the way the oil companies’ profits have, we must not get a % of profits. In fact, let’s do a little math. If $3.8 million is the result of 25 cents per barrel, then they must be extracting about 15.2 million barrels a year. And if we get about $32 million a year in oil revenues (based on the 40% increase figures cited above), then we are getting somewhere around $2 per barrel. So $2.40 per barrel total seems to be what the city generates. Another approx $2.50 goes to the Port and another approx $3.30 to the State (also based on the 40% figures above). That totals somewhere in the neighborhood of $8-$9 per barrel the oil company pays to extract oil from public land and sell at insane profit back to us.
So basically, my city allows the oil companies to drill and drill, and even though gas prices remain astronomical, it has not lowered my gas bills, nor prevented utility payment increases, nor boosted the city budget, nor saved me from the second salary cut in 5 years.
And that’s what really set me on this rant. I saw some stupid pro-drilling web ad tonight, just hours after opening my first paycheck of the school year. See, the school district budget was cut this school year, and my pay as a substitute teacher was cut by 10% as a result. I would make significantly more money if they just paid me babysitter wages of $1 per student per hour. This cut comes 5 years after the unfunded mandates in No Child Left Behind forced pay cuts of 20% for subs in my district! And this a school district that regularly ranks in the top 5 urban school districts nationally and won the Broad Prize as the top urban district a couple of years ago, so it isn’t like we were failing to meet the NCLB requirements or anything. I had almost regained my original wage after the last big slash when this new set of cuts came down. So I now make about 12% less than I did 8 years ago when I started subbing. All the while, oil company profits keep growing and growing.
So fuck all those fucking asshats who lie about drilling here and now as an economic or energy solution. And fuck all the stupid lame-brained dipshits who believe the lies. They can stick their drill baby drill right up their ass baby ass.