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America’s Escalating Artificial Cost of Production

America’s Escalating Artificial Cost of Production

Editorial from Mike Cantrell, DEPA President

September 8, 2011 Thirty years ago my good friend and business contrarian John Cassidy, from Stroud, Oklahoma, introduced me to the idea of the “artificial cost of production.” He maintained that the rising cost of regulations was a cost that produced virtually no financial benefit and would eventually rise to the level of making America non-competitive with the rest of the world. While his words rang true then, they are even more alarming now. The recent actions of the U.S. Fish and Wildlife Service and their partners in the U.S. department of Justice in North Dakota are a glaring example of regulation gone amuck. We have all experienced in one way or another, the extremes of the Migratory Bird Treaty. Obviously dead birds have become more important than people. We all want to protect wildlife. Many of us hunt and fish. But the idea that this agency - with the hammer of the U.S. Department of Justice - looked for dead birds over a 45-day period from May-June in reserve pits in North Dakota and their actions after finding 28 dead birds in that time period1 put an exclamation point after John’s fear of the escalating “artificial cost of regulation in America.” These were not bald eagles or any other endangered species. Hunters and windshields in North Dakota kill thousands of them each season. The maximum penalty per dead bird is a $15,000 fine and six months in jail2 (the annual equivalent of five high-paying jobs in the oil patch). Doesn’t this exceed the bounds of common sense of almost any American? One would surely hope so. To make this action even more egregious, it was announced in a press conference before even notifying the companies allegedly in violation.2 Of course it’s probably just a coincidence that this press conference was one day after one of the most positive shows on American energy ever with Jim Cramer of CNBC’s Mad Money visiting the Bakken oil boom in North Dakota where he proclaimed that we can drill our way to energy independence. Of course it’s also a coincidence that the U.S. Attorney who spent three months in pursuit of this massacre of 28 of our feathered friends is the only U.S. Attorney in history to be appointed while serving on the Democratic National Committee. Doesn’t seem too fair and impartial does it? We can only hope that the worst recession since the Great Depression, along with examples of extreme regulatory abuse like this incident, will prompt our Congress to take action to stop the regulatory lunacy that cost taxpayers over 1.75 trillion per year.3 And that’s the number in 2008 before President Obama came to office and increased the Environmental Protection Agency’s budget by 34 percent in the 2010 budget alone.4 And according to a report by the Heritage Foundation the Obama Administration has imposed 75 new major regulations resulting in a net increase of $38 billion in cost to the private sector since they took office.5 This cost is passed on to consumers through higher prices for almost everything we buy. It seems that this president is intent on building government and reducing the private sector in order to end “American Exceptionalism” in the world and bring us down to the level of the defunct European Socialist Democracies. It also seems that he is using the power of the Executive Branch to accomplish this goal while bypassing Congress. If Congress does not take action to stop this “downgrading of American competitiveness” the America we all treasure as a land of opportunity will simply become a footnote in the history books for future generations to admire and wonder why you would destroy something as wonderful as that.

Mike Cantrell, President, Domestic Energy Producers Alliance Sources: 1Plains Daily. (August 29, 2011).

Senator Inhofe: Justice Department Prosecution Of Oil Companies “An Attack” On Oil. Retrieved from http://plainsdaily.com/entry/senator-inhofe-obama-administration-will-stop-at-nothing-to-bring-down-us-fossil-fuel-producers/ 2Bloomberg Businessweek. (August 25, 2011).

Oil companies charged in ND migratory bird deaths. Retrieved fromhttp://www.businessweek.com/ap/financialnews/D9PBCGT00.htm 3 The Wall Street Journal. (September 27, 2010).

The Regulation Tax Keeps Growing. Retrieved from http://online.wsj.com/article/SB10001424052748703860104575508122499819564.html 4 Earth911. (May 14, 2009).

Obama’s 2010 Budget to Increase EPA Funding by 34 Percent. Retrieved from http://earth911.com/news/2009/05/14/obamas-2010-budget-to-increase-epa-funding-by-34-percent/ 5 The Heritage Foundation. (July 25, 2011).

Red Tape Rising: A 2011 Mid-Year Report. Retrieved from http://www.heritage.org/Research/Reports/2011/07/Red-Tape-Rising-A-2011-Mid-Year-Report#_edn3

DEPA is a national alliance of producers, royalty owners, oilfield service companies as well as state and national independent oil and gas associations representing the interests of small businessmen and women of the energy industry in our nation’s Capitol.