When is a deal not a deal?

February 23, 2007

When is a deal NOT a deal?
When it is made with the US Government.

What if you went to your local GM dealer and after hours of negotiation you reached an agreeable price on a new vehicle, signed all the paperwork, arranged all necessary financing, and later drove off a proud new owner of the vehicle of your choice, BUT, after paying all your insurance fees, registration fees, and even after having driven your new vehicle for a considerable amount of time, the dealership calls you up and says they have to have more money from you because your vehicle was better than the dealership had believed and you got too good of a deal?

Would you jump in that new vehicle and race down to the dealership and give them more money, or would you still be laughing at such a ridiculous request? What if the dealership said they were going to prevent you from ever buying a new car again until you paid-up, and even went further to demand a surcharge on any mileage you continued to place on the car you bought?

You might laugh at first, but like the oil industry, which is just beginning to suffer from breach of contract by the U.S. Congress, that laughter would quickly stop and you would be on the phone to your lawyers.

No, the Oil Industry does not deserve the same respect and legal protection as other businesses, or so says the Democrat-controlled Congress, and you can be sure the oil companies are not laughing about any of it.

After the world oil industry has spent billions of dollars to explore, develop new technology, and produce leases that were negotiated and approved almost a decade ago, Congress is poised to renege on those CONTRACTS and is demanding more money for those leases.

Congress contends that the Clinton Administration (without mentioning Clinton directly) made several huge mistakes in drawing up lease contracts for offshore drilling in the Gulf of Mexico. The oil companies, in good faith, accepted the terms and moved to develop their technologies to make production possible. Now, world politics and economic growth, both proving the Clinton Administration had little to no foresight, have driven the price of oil to new highs and, despite increased costs of production, Congress in their typical greed, are beside themselves over the potential loss of revenue.

What about ”a deal is a deal”? What about respecting contractual law? What about the ”good faith and promise” of the United States of America?

Making matters even more iniquitous the Democrat leadership is now considering legislation that would prevent any further leases going to those companies refusing to renegotiate those old contracts. This amounts to nothing less than blackmail, which not only tarnishes the reputation of the United States and hurts American oil companies, it will also prove devastating to Louisiana.

According to the Department of Interior the newly proposed legislation (blackmail) has stopped all talks of renegotiation, and ”such legislation could prompt legal challenges that could delay new leases, resulting in an estimated 1.6 billion barrels of oil equivalent in delayed output, costing an estimated $13 billion in delayed royalties”.

Democrat detractors will surely deny any such thing as blackmail is being imposed upon the oil industry, no matter how obvious it is to honorable people, and that Democrats would never break their word on any deal, despite the same obviousness.

However, given the Democrats are now in negotiations to renege on the deal made with President Bush to allow the President to conduct a war against Islamic Facists dedicated to killing Westerners, why would thoughtful people begin to believe anything Democrats say about deals with the oil industry, when the stakes of the war on terrorism are far higher, American lives.


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