Unintended Consequences

Today's installment comes courtesy of the New Orleans Times Picayune.

The Obama budget, which will likely face a tough battle in Congress, would repeal a host of tax credits and other incentives long enjoyed by fuel producers. The Gulf of Mexico would get special attention, with a new excise tax levied on oil and gas produced from its waters.

The measures come at a precarious time for the industry. Commodity prices have tumbled in response to the sagging economy: Oil sank from highs last summer of $147 a barrel to about $40 in recent weeks, and natural gas dove from $13 per thousand cubic feet to around $4.

New drilling projects were financed at a time when companies expected fuel prices to stay on their upward trend, and many firms are now struggling to meet loan payments, said Mark Brown, an analyst in the New York office of Pritchard Capital Partners, of Mandeville.

Companies have drastically reduced production, with the number of rigs operating in the United States down from a September high of 2,031 to 1,243 this week.

The Obama budget could exacerbate the problem and send some companies into bankruptcy, Brown said.

Remind me again where these promised new jobs are going to come from...McDonalds? Oil rig workers make a handsome living - yes it is very hard work but the reward....If the number of working rigs has been cut in half, what do you suppose has happened to those workers?

Meanwhile.....

The tidy towns and mountain vistas of Switzerland are an unlikely setting for an oil boom.

Yet a wave of energy companies has in the last few months announced plans to move to Switzerland -- mainly for its appeal as a low-tax corporate domicile that looks relatively likely to stay out of reach of Barack Obama's tax-seeking administration.

In a country with scant crude oil production of its own, the virtual energy boom has changed the canton or state of Zug, about 30 minutes' drive from Zurich, beyond all recognition. Its economy was based on farming until it slashed tax rates to attract commerce after World War Two...

Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland.

Emphasis mine.

Way to go Mr. President. Way to drive tax-paying businesses out of the country. Way to kill an industry that we need now more than ever. I mean how are we going to get away from our dependence on foreign oil if we kill off the American oil industry. Those "green" alternatives are not ready for mass use yet sir. What do we do in the interim????? Or is it your intention to make this country another 3rd world banana republic?

These are the continued unintended consequences of a government that has decided it must meddle in the minutia of our every day lives.