Obama the "Underdog"?! Ha!

I can't believe our dictator in chief actually believes this garbage!

Posted by Erick Erickson           

Tuesday, October 4th, 2011

Barack Obama told ABC News yesterday that he is the “underdog” in 2012. He actually raced to embrace the title George Stephanopolous threw out there for him. There was no deliberation, no pause — just an immediate “absolutely” to lay claim to the title.
First understand that the Obama wants to be the underdog because of America’s fixation with rooting for the guy behind. He sees it as a positive.
Second, understand that underdogs do not get to take campaign bus tours through swing states at taxpayer expense on buses paid for by taxpayers and also fly around in a blue and white 747 and get pretty much as much free press as he wants, including great photo ops in front of Congress talking about jobs.
Underdogs do not get that.
Incumbent Presidents get that. And incumbent Presidents do not, more than year from an election get to call themselves “underdogs,” if ever they do. When a President is a year from election, sees his popularity going down, and can’t even muster enough Democrats to vote for his jobs plan because they neither fear nor respect him, the President is not an underdog. He is a loser.
This President is a political loser. Every time he speaks the stock market goes down. Every time he acts boldly, independents attribute it to increasing political desperation without seriousness. Every time he tries to lead, his own party privately mocks him.
Jimmy Carter was no underdog and neither is Barack Obama. With the trappings of power, the brightest men in the room to advise them, and massive war chests — Obama’s is the biggest there is — he is not an underdog.
And it’s not just because he is a political loser. Americans cheer underdogs. No one is cheering Barack Obama.

~Lordhawke

EPA Regulations Will Cost 1.44 Million Jobs!

From: RedState Briefing
Posted by Ben Howe           

Tuesday, September 20th at 9:35PM EDT

Last week, I wrote about how the EPA was warring with industry, one can only assume in an attempt to destroy jobs.  As that war continues, I thought it might be helpful to put some actual numbers in front of our readers so they can get the clearest picture possible about just how many jobs are being lost in the name of environmental protection against the man-made theory of global warming.
National Economic Research Associates (NERA) used the Federal Government’s own data in finding that Obama’s proposed EPA regulations would cost America over 180,000 jobs per year between 2013 and 2020.
This includes effects from the Maximum Achievable Control Technology (MACT) as well as  Cross-State Air Pollution Rule (CSAPR) rules.
Here’s a break down of just a handful of the states affected by these regulations:
Projected Job Losses between 2013-2020:
Pennsylvania: 59,000
Ohio: 53,500
West Virginia: 38,500
Michigan: 40,000
Illinois: 48,000
Indiana: 51,500
Wisconsin: 24,500
Iowa: 26,500
Minnesota: 12,500
Florida: 135,000
Missouri: 76,000
Total nationwide will be in the range of 1.44 million jobs lost.
There are ways to help prevent this.  If you haven’t heard of the TRAIN act, it may be voted on this Friday and it will hopefully be a way to reign in some of this tyrannical regulation:

The TRAIN Act (H.R. 2401, “Transparency in Regulatory Analysis of Impacts on the Nation Act of 2011”) establishes an 11-member federal interagency committee, chaired by the Department of Commerce, to analyze the cumulative impacts of a number of major EPA regulations. A final report on the results of the analysis is due to Congress by August 1, 2012.

It bears repeating, though I know I mention this every time, that this is precisely what President Obama said he would do.  He is systematically destroying the coal industry, and the toll on American jobs is extremely high.
If an industry becomes obsolete, there is no preventing the shedding of jobs as the market transitions to a new good or service.  That is not what’s happening here.  What’s happening here is the targeting of a bedrock American industry by a President who thinks he’s saving mother Earth.

Lordhawke says:  Personally, I don't think he really cares about Mother Earth so much as he wants to do the bidding of the International Banksters and destroy America!  This is exactly what he has been told to do by the Money Masters!  This is also a part of Agenda 21; they will use whatever means they deem necessary to place America under UN domination and control.
~Lordhawke

WHY ARE OBAMA AND UNION BOSSES WORKING TO DESTROY COMPANIES AND JOBS?

Posted by LaborUnionReport (Profile)

Tuesday, September 13th, 2011

   

The question needs to be asked: Is it ignorance or malice? There was a time after the subprime mortgage meltdown when, if sound decisions on policy and financial initiatives had occurred, the American economy may not have been hobbled as badly, its credit rating might not have been downgraded, the recession might have been curtailed and so many Americans might not have been so negatively affected. However, rather than helping a recovery by letting the quasi-free market adjust, contract and expand again, at almost every turn, Barack Obama and the union appointees and crony capitalists within his administration are, whether out of malice or ignorance, seemingly doing everything they can to destroy an already fragile economy. It’s really no longer a question of  ”if,” but “why.”

In 2008, Barack Obama was caught on camera explaining his redistributionist desire to spread the wealth around. At the time, in classic Saul Alinsky fashion, Obama’s union pushers tried deflecting the issue by the stomping on the reputation of ‘Joe the Plumber,’ the man who asked Obama an innocent question.
Now, 18 months after his first stimulus failed, Barack Obama has cynically proposed spending another one-half a trillion dollars (paid for by redistributing the wealth of the not-so -wealthy). Even pundits realize it is a “nakedly political” plan to paint his political opponents as ‘radical.’ However, even with the politicization apparent, policies of Obama and his union cronies go beyond the typical ‘tax and spend’ stereotype afforded to Keynesian liberals.
Unfortunately, from coast to coast, the Obama Misery Index (OMI) is leaving almost no sector untouched. From the seemingly politically-motivated raid in Nashville on legendary (and non-union) guitar-maker Gibson to the EPA killing 500 jobs in Texas, the attacks on America’s job creators are not only disturbing, they are alarming. Is it ignorance or malice?
In addition to the union appointees at Obama’s National Labor Relations Board attacking Boeing (and the potential long-term spillover effects across the economy), as well as its assault on Right-to-Work States, the NLRB’s new mandate to require all private-sector employers with two or more workers to post union notices, coupled with its proposal for ambush elections and the recent micro-union ruling, is causing more and more businesses to spend resources in preparing to be attacked by unions than creating jobs. Is it ignorance or malice?
Adding to this pro-union, bureacratic quagmire, the NLRB has also poured a gallon of cold water on companies that may have been contemplating merging with or buying already-unionized companies. In yet another NLRB ruling, the union appointees have forbidden employees from getting rid of an unwanted union immediately following a merger or acquisition.
This means that if a unionized company is floundering (as so many are) and another company comes along that may extend a lifeline by either merging with or buying the unionized company, there will be added pause if it also means buying the union. As a result, if a merger or sale does not happen and the floundering company fails, the employees (who may not have even wanted to remain unionized) lose their jobs.
Then, there’s the Department of Labor’s scheme to reclassify all sorts of service providers as ‘persuaders’ and cause them to report their earnings to the Department of Labor. While largely misunderstood, the proposal will cause both companies and vendors (who may have no knowledge about unions) to make their financial dealings public or go to jail. Such are the types of people who are being targeted by Obama’s union regime:

• Communications consultants who coach management on how to structure and effectively manage employee teams
• Productivity consultants who design and implement total quality management teams, giving employees a voice in the success of their companies’ products.
• Safety consultants who help establish safety committees that give employees the ability to voice safety concerns to their employer to resolve safety issues
• Human resources consultants that design, write, or implement employee handbooks or policies
• Compensation consultants who design and administer pay or incentive plans for companies

None of these would seemingly have anything to do with unions, however, because all of the activities that these types of consultants do may indirectly persuade employees in the exercising their rights to unionize, these consultants will be faced with either reporting their total income to the Department of Labor, go to jail, or get out of the business entirely.
If the individuals leave their respective industries (or companies choose to go without the help), how does a workplace that is less safe, less team-oriented, and less structured help America’s competitiveness? Is it ignorance or malice?
In another example, in June, the Department of Labor issued a stunning ruling that a private construction project must pay “prevailing wages” (i.e., union wages) on a $700 million project under the Davis Bacon Act because it is on land leased by the federal government.
According to the Washington Post, this could raise the project by $20 million or more.

"Whatever the law’s merits, it has been pretty well settled that Davis-Bacon applies only to structures funded, owned or occupied by the U.S. or District governments, as its plain language suggests.
Now, with the stroke of a bureaucrat’s pen, that understanding has been upset. A Labor Department regulator has ruled that Davis-Bacon covers the CityCenter DC project, a $700 million private-sector complex under construction downtown at the site of the former convention center. The decision is astonishing, both because it is such a stretch legally and because of its implications — which range from a financial hit for the District to higher costs for development across the country."

While the bureacrat at the Department of Labor expects the District of Columbia to pick up the tab for the increased costs, that may not be of any comfort since, ultimately, it is the taxpayers who will pay the price.

"Never mind that the District’s actual control over construction amounts to little more than the usual regulatory oversight, or that long-term leasing of municipal land is a common economic development tool not previously thought to convert office-retail complexes into public works. Never mind that Ms. Leppink’s expansive reasoning could apply to all future commercial redevelopment of land belonging to the District or to the federal government anywhere."

From the the beginning, Barack Obama had claimed he wanted to transform America. His primary pushers—union bosses—have long wanted to change the America’s economy to more of a statist nation. Unfortunately, while many voters hoped Mr. Obama’s election would change things for the better, it is quite clear that the opposite has occurred. As a result, America will be poorer for generations as a result while union cronies control large portions of the federal government.
While it is true Mr. Obama inherited a mess, he and his administration are making it exponentially worse.
The question is: Is it ignorance or malice?  
Knowing what I know, I have to believe it is malice!   ~Lordhawke

Labor Department Seeks New Rules To Restrict Use of Young Farm Workers

U.S. Labor Secretary Hilda Solis

 
Wednesday, August 31, 2011

By Fred Lucas

(CNSNews.com) – The U.S. Department of Labor is seeking to update child labor laws to put more restrictions on farm workers under the age of 18 from working with manure, pesticides, driving tractors and engaging in certain other agricultural activities.


Department officials made the announcement on Wednesday during a conference call with reporters.


Public comment for the regulations is open until Nov. 1 of this year. The rules have not been updated since 1970, Labor Secretary Hilda Solis said during the call. The current rules under the Fair Labor Standards Act already prohibit young workers from certain tasks.

“Children employed in agriculture are some of the most vulnerable workers in America,” Solis said. “Ensuring their welfare is a priity of the department, and this proposal is another element of our comprehensive approach.”

Exemptions would be made under the proposed rules for children who work on farms owned by their parents.


The strengthened child labor rules, which would be enforced by the department’s Wage and Hour Division, would bar agricultural work with pesticide handling, timber operations, manure pits and storage bins. Farm workers under the age of 16 would not be allowed to participate in working on tobacco. This would include cultivation, harvesting and curing tobacco.

The rules are also designed to stop anyone below the age of 18 from being employed in the storing, marketing and transporting of farm product raw materials. Prohibited places of employment would include country grain elevators, grain bins, and grain silos, feed lots, stockyards, livestock exchanges and livestock auctions.

Further, farm workers under the age of 16 would be banned from using all power-driven equipment, including tractors, with an exemption for student learners.


http://www.cnsnews.com/news/article/labor-department-seeks-new-rules-restric

Hilda Solis...colorful character with "close ties to NCLR" ...and MEChA, I bet.  2011 Honoree for Excellence in Government Service at the MALDEF Gala Awards.   Just type her name in your search bar.  Betcha before long, you'll be livid.




"Although some of La Raza’s government funding was earmarked by congress, virtually all of it was doled out by the Obama administration. Sixty percent of La Raza's take came from the Department of Labor—run by Hilda Solis. They lobbied hard for her appointment and honored her with an award. She paid them back—with millions of our tax dollars." ~ Tom Tancredo  http://townhall.com/columnists/tomtancredo/2011/07/29/por_la_raza,_nada/page/full/

Sheriff Tony Demeo - Nevada

Raids are increasing on farms and private food-supply clubs

14 Jul 2010 1:32 PM

 When the 20 agents arrived bearing a search warrant at her Ventura County farmhouse door at 7 a.m. on a Wednesday a couple weeks back, Sharon Palmer didn't know what to say. This was the third time she was being raided in 18 months, and she had thought she was on her way to resolving the problem over labeling of her goat cheese that prompted the other two raids. (In addition to producing goat's milk, she raises cattle, pigs, and chickens, and makes the meat available via a CSA.)


But her 12-year-old daughter, Jasmine, wasn't the least bit tongue-tied. "She started back-talking to them," recalls Palmer. "She said, 'If you take my computer again, I can't do my homework.' This would be the third computer we will have lost. I still haven't gotten the computers back that they took in the previous two raids."

****
This is a long article, but it lists several more raids in various parts of the country and documents the amount of force being used.  ~Faye

Read the rest of the article here.

Food Raids:A Sampling from the 1st half of 2011

Food Safety Bill: Unconstitutional

Ok.  If this was noted as being unconstitutional before last Christmas, what's going on?

County Sues Farmer For excessive crops on his own land

Senate Bill S510 Makes it illegal to Grow, Share, Trade or Sell Homegrown

Rawesome Organic Foods Video of Armed Raid with Guns Drawn

Raw Milk Raid - Amish in Lancaster, Pennsylvania

Raw Milk Raid - Loganville, Wisconsin

FDA Raids Kansas Winery - for Elderberry Juice • KSN News • June 3rd, 2011

I just remembered something...back when we were getting all the bad stuff from China, wasn't the FDA's excuse was that they had had their budget reduced and they did not have the personnel to sufficiently inspect the Chinese products? Hmmmm. ~Faye

Raw Milk Raid - Healthy Family Farm in California

Now Obama Wants Our Gitfiddles

From Conservative Action Alerts:

Obama Administration Pushes Gibson to Kill American Jobs


More than 14 million Americans are unemployed, and it looks like Obama wants to increase those numbers by closing down Gibson Guitar factories in Tennessee in order to send jobs overseas.


Two weeks ago, armed agents from the U.S. Fish and Wildlife Service and Homeland Security raided the corporate headquarters and four Gibson Guitar factories in Memphis and Nashville, and confiscated 24 pallets of Indian rosewood and ebony, as well as guitars (more than $500,000 in product) and computer files.


Obama's Justice Department authorized the raid, and cost Gibson more than $1 million in lost profits, because the company was forced to shut down production and send hundreds of works home-after they were interrogated by Homeland Security.

Obama's Justice Department is claiming that Gibson violated Indian law by importing ebony and rosewood fingerboards that were not 100% manufactured in India.

Had the fingerboards been manufactured solely in India, and not finished in America, the product would be legal. So, it looks as though Obama wants to ban the "Made in the USA" label, by sending all of our manufacturing jobs overseas.

Please CLICK HERE to SEND FAXES to every members of Congress and tell them to investigate the Obama appointees who are responsible for the raids against the Gibson Guitar Company. This administration is imposing regulations irrationally and in a hostile manner.

Many have speculated that Obama's Justice Department is attacking Gibson because they operate non-union manufacturing plants, and their CEO, Henry Juszkiewicz, is a big contributor to Republican candidates.

This might sound far-fetched at first, until one learns that Gibson Guitar's top competitors -- who are unionized and big supporters of Obama - have not been raided, and they, too, import unfinished rosewood and ebony fingerboards from India.

According to the Wall Street Journal, "Federal agents first raided Gibson factories in November 2009. ... Gene Nix, a wood product engineer at Gibson, was questioned by agents after the first raid and told he could face five years in jail."

Juszkiewicz says that Gibson employees are being "treated like drug criminals." And he can't believe that federal agents told workers that they could face criminal prosecution for sorting wood in the Gibson Guitar factory.

Rep. Marsha Blackburn (R-TN) agrees, and that is why she invited Juszkiewicz to be her special guest at Obama's jobs speech on Thursday - so Obama would have to face the fact that his Justice Department is killing American jobs.

"Gibson Guitar is at the heart of this jobs debate, and is an example of exactly why President Obama has it wrong when it comes to getting our economy back on track," Rep. Blackburn said. "Maybe if the President spent more time finding real solutions to empowering small business owners and less time hindering businesses like Gibson, we'd see more new jobs being created.

Please CLICK HERE to SEND FAXES to every members of Congress and tell them to investigate Obama appointees who are responsible for the raids on the Gibson Guitar Company. This Administration is imposing regulations irrationally and in a hostile manner.

According to a court filing made by the Obama Justice Department, the Gibson Guitar Company is being told by the Administration to move its manufacturing overseas ... to Madagascar.

This Administration is spending millions of dollars to pursue Gibson in an attempt to force the company to send all of its manufacturing jobs overseas. At a time when Obama is claiming that he wants to create jobs, his Justice Department is doing everything it can to eliminate Gibson's American workforce.

In an attempt to rationalize the department's injustice, Eric Holder is using the Lacey Act of 1900 for his reasoning behind the raids on Gibson. The Lacey Act was originally passed to regulate trade in bird feathers used for hats, and it was amended in 2008 to cover wood and other plant products.

Obama's Justice Department is not criminalizing the import of rosewood and ebony, rather the manufacturing process that is being completed here, in America.

Since the Indian rosewood and ebony fingerboards are not finished by workers in India, the feds are claiming that the product is illegal to import into the U.S. --- not because of U.S. law, but because Obama's Justice Department wants to interpret India's law whichever way it sees fit, in order to push the Administration's agenda.

"I think they're taking the position that we should be shifting these jobs overseas," Bruce Mitchell, the chief legal counsel for Gibson told Fox News. "We have - probably 40 people in our factory here who are doing the inlays into the fingerboard. ... If all that was to be done over in India, then ... those jobs would be lost."

According to Fox News, "... India is perfectly happy to ship the fingerboard 'blanks' to the United States. In a letter dated July 13, the deputy director general of foreign trade for India confirmed that ‘fingerboards made of rosewood and ebony is freely exportable.'"

CLICK HERE to SEND FAXES to every members of Congress and tell them to investigate the government's raid on the Gibson Guitar Company. The actions of the Obama administration is hurting American companies and American workers by attempting to force Gibson to send its manufacturing jobs overseas.

The fact that Obama's Justice Department has issued warrants and raided Gibson based on their interpretation of Indian law, is frightening!

The Daily News in Memphis is reporting that: Juszkiewicz is striking back against the raid of his company's factories and offices in Memphis and Nashville by "... letting the U.S. Justice Dept. know that he's telling his employees to keep making the instruments."

Juszkiewicz said that in 2009, the feds seized $500,000 in goods from Gibson factories, and the company is suing the government in Federal Court in Nashville to get their property back. (The government hasn't charged the company with any wrongdoing.)

"We feel totally abused. We believe the arrogance of federal power is impacting me personally, our company personally and the employees here in Tennessee, and it's just plain wrong," Juszkiewicz said in a statement released to the media.

The Obama administration's attack on Gibson is expected to cost the company more than $10 million, and even more if the company is forced to export all of its jobs overseas.

Tell every member of Congress to investigate the Obama appointees who are responsible for the raids on Gibson. The Obama Justice Department is imposing regulations irrationally, and it's hurting American companies and the American workforce.
***************************************************************************************









*******************************************************************************

As I've said before, sending these blast faxes is expensive and I myself don't use them.  I've been running across things like this for a while now and I'm getting down right angry and upset.  So I'm going to get them all together so we can see the whole picture.  Then we'll figure out what we can do about it.  Oh, I'm setting up a new category to stick them all in... OBAMA RUNNING AMUK.  ~ Faye

Bureaucrats run amok: EPA now classifies milk as a pollutant.

This is an old story, but I just had to go find something on it because of the EPA's currently classifying hay as a pollutant in the story below.  It's really getting stupid out there.  But put it all together...our lizard, the prairie chicken, CDL's for farmers, milk/hay/CO2 declared pollutants, buffer areas around waterways...the list goes on and on.  ~ Faye

Bureaucrats run amok: EPA now classifies milk as a pollutant.

by editor on June 16, 2010

In case you doubted that government bureaucrats are committed to controlling every aspect of our lives, please be aware that they’ve now categorized milk as a pollutant.


Northern Michigan’s Channel 9 has the details:

The Environmental Protection Agency intends to classify milk as a hazardous waste; in the same category as oil.

That means, farmers would have to come up with an oil spill prevention plan which could cost them thousands of dollars.

The Senate Agricultural Committee passed a resolution today urging the EPA to take back those regulations.

This new interpretation of the EPA’s Clean Water Act will require dairy farmers to develop oil spill prevention plans for their milk storage tanks.

As one farmer said in the video, “The majority of milk is water, in the high 80s percentile is water. The rest of it, three and one half percent, is solids of the fat and a portion of that is oil. And because of that small amount of oil in milk they’d like to relate it to motor oil or fuel oil and put it in the same category.”

To put this in terms a dairy farmer would appreciate, bureaucrats are good for only one thing: sucking from the government teat.

Source: 9and10News.com

http://www.ihatethemedia.com/epa-classifies-milk-as-pollutant

EPA Declares Hay a Pollutant in Effort to Antagonize Small and Mid-Sized U.S. Cattle Feeders

September 1, 2011 Billings, Mont. – During his presentation on the status of the nation’s new country-of-origin labeling (COOL) law, and on behalf of the R-CALF USA COOL Committee, R-CALF USA member and Kansas cattle feeder Mike Callicrate was asked a non-COOL question that set convention goers on their heels during the 12th Annual R-CALF USA Convention held August 26-27 in Rapid City, S.D.


“Has the Environmental Protection Agency declared hay a pollutant?” an audience member asked. Callicrate responded affirmatively and explained that the Environmental Protection Agency (EPA) recently initiated a formal enforcement action against his Kansas feedlot for, among other things, failure to store his hay in a pollution containment zone. “Now that EPA has declared hay a pollutant, every farmer and rancher that stores hay, or that leaves a broken hay bale in the field is potentially violating EPA rules and subject to an EPA enforcement action,” Callicrate said. “How far are we going to let this agency go before we stand up and do something about it?”

Callicrate is permitted to handle 12,000 cattle at a time in his feedlot, which is considered a small to mid-sized feedlot in an industry now dominated by mega-feedlots such as those owned by the world’s largest beef packer – JBS-Brazil – with a one-time capacity of over 900,000 cattle; or the other mega-feedlot that also feeds hundreds of thousands of cattle at a time and is owned by the nation’s second-largest beef packer - Cargill; or the other handful of mega feedlots with capacities of hundreds of thousands of cattle such as those owned by Cactus Feeders, Inc. and Friona Industries.

In comments submitted to the U.S. Department of Justice, R-CALF USA estimated the above named mega-feedlots feed 18 percent of the nation’s fed cattle each year while one-fourth of the nation’s cattle are fed in feedlots with a one time capacity of 50,000 head or more. The largest of feedlots are getting larger and Callicrate’s feedlot is among the group of small to mid-sized feedlots that are being pressured to exit the industry so beef packers and corporate feedlot owners can increase their respective capacities. Data from the U.S. Department of Agriculture (USDA) show that 45 feedlots with one-time capacities of between 1,000 or more cattle but less than 16,000 cattle have exited the industry from 2008 to 2010.

R-CALF USA contents beef packers are deliberately forcing small to mid-sized feedlots out of business through unfair and abusive cattle-buying practices that effectively restrict market access for all but the largest of feedlots. “The proposed GIPSA rule (USDA Grain Inspection, Packers and Stockyards Administration rule) will put a stop to such unfair and abusive practices, but only if USDA issues a final rule,” said Callicrate.

Callicrate’s feedlot is the perfect example. In late 1998, the nation’s largest beef packers blackballed Callicrate because he called attention to the unfair buying practices of the corporate meatpackers. Callicrate was forced to cease his feedlot operations until 2000 when he opened Ranch Foods Direct, a meat processing and distribution company in Colorado Springs, Colorado, and began marketing his own beef more directly to consumers.

“I believe the EPA’s enforcement action is a premeditated effort by EPA to partner with the beef packers to finish the job the beef packer’s couldn’t do alone,” said Callicrate adding, “along with my feedlot, the EPA has filed enforcement actions against five other smaller feedlots, including one with only 400 cattle.

Callicrate said the EPA does not appear to be going after the corporate feedlots. “EPA is turning a blind eye toward the mega-feedlots that are a real risk for pollution and, instead, is antagonizing small to mid-sized family operations in an effort to help their packer-partners capture the entire live cattle supply chain away from family farm and ranch operations.”

We thought the Obama Administration was going to bring about a change to the ongoing corporate control and corporate dominance that has been decimating the U.S. cattle industry. I guess we’re seeing that change right now. Rather than reduce corporate control and dominance the EPA is overtly partnering with the corporate beef packers to accelerate the exodus of sustainable, independent family operations. This really smells,” Callicrate concluded.

Note: For satellite photographs of Callicrate’s feedlot compared to larger, industrialized feedlots, go to http://nobull.mikecallicrate.com/

http://r-calfusa.com/news_releases/2011/110901-epa.htm

Billions at stake as Exxon fights for lease on Gulf of Mexico's Julia field

• Russell Gold
• From: The Wall Street Journal
• August 18, 2011 3:12PM

EXXON Mobil is fighting the US government to keep control of one of its biggest oil discoveries ever, in a showdown where billions of dollars hang in the balance for both sides.

The massive Gulf of Mexico discovery contains an estimated 1 billion barrels of recoverable oil, Exxon says. The Interior Department, which regulates offshore drilling, says Exxon's leases have expired and the company hasn't met requirements for an extension. Exxon has sued to retain the leases.

The court battle is playing out just when Barack Obama's administration has made an issue of unused leases, which deprive the Treasury of valuable taxes. It also comes as regulators are being careful not to be seen as lax in their dealings with large energy companies, in the wake of last year's BP spill in the gulf.

The stakes are high: Under federal law, the leases - and all the oil underneath - could revert to the government if Exxon doesn't win in court.

The loss of the leases would be an enormous black eye for Exxon.


The company hadn't disclosed the size of the discovery, in what is called the Julia field, until it was mentioned in the suit Exxon filed against the Interior Department last week in federal court in Lake Charles, Louisiana.

The Texas behemoth faces the sobering prospect that it may have made the largest discovery ever in the Gulf of Mexico, only to lose it. Tens of billions of dollars of oil could slip through its hands because it failed to follow federal rules for getting a lease extension while it moved forward with plans to get the oil out of the ground.

Exxon spokesman Patrick McGinn said the company expected to get the extension, which he said was traditionally granted as a matter of course. "You state your case and you got it. (This) was unexpected."

This high-stakes standoff is likely to spark a political, as well as legal, showdown between the federal government and the nation's largest oil company. It has also roped in Norway's Statoil ASA, which owns 50 per cent of the Julia find. Statoil said it filed its own suit against the Interior Department to preserve the leases on Monday, in the same Louisiana federal court.

Exxon is the field's operator and lease-holder.

A spokeswoman for the Interior Department said, "Our priority remains the safe development of the nation's offshore energy resources, which is why we continue to approve extensions that meet regulatory standards."

The Interior Department, which oversees offshore oil development and collects royalties, has been trying to show that it has become a tougher, but still fair, regulator of the Gulf of Mexico's oil riches.

Its reputation was battered when lives were lost and an environmental disaster unfolded after the massive Deepwater Horizon well blow-out and oil spill last year, when BP sought - and the government approved - last-minute changes to the well design, which some investigators say contributed to a chaotic environment aboard the drilling rig. The government was roundly criticised for weak oversight of safety rules.

Now the department must decide whether to fight Exxon in court or settle and allow it to develop the oil. Turning the leases over to another company would mean further delays to the tax royalties that would go to government coffers. At current prices, potential royalties paid to the government over the lifetime of a one billion-barrel field would be about $US10.95 billion ($10.38bn).

The oil industry, led vocally by Exxon, has said that developing oil fields in the deepest reaches of the gulf takes time to do safely. And by threatening to take away a massive discovery, the industry says that the government is sending the message that oil companies need to be in a rush to produce.

The possibility that Exxon could lose this oil will likely send shockwaves through the industry. "This is unprecedented," said Amy Myers Jaffe, associate director of the Energy Program at Rice University in Houston. "The question is: Do our offshore rules allow for flexibility? You don't want to let companies sit on a discovery. We definitely don't want to send the industry a message that you need to be in a rush or we'll take the oil away from you."

Exxon's lawsuit said the government has granted "thousands" of extensions over time. It said the government's denial of its extension relied on legal interpretations that it "had never before applied and had never before articulated". Statoil asserted in its lawsuit that no request for an extension for a deep-water development "had ever previously been denied". The Interior Department couldn't comment on this.

The Exxon discovery is believed to be the largest in the Gulf of Mexico since BP found the Thunder Horse Field in 1999, and it could be larger. The find also cements the Gulf of Mexico as a rich exploration area with large amounts of undiscovered oil that may keep oil companies active for years to come.

"This is very deep water, very complex structures and difficult-to-produce oil," said Exxon's Mr McGinn.

The dispute over Exxon's plans for the Julia field began in October 2008 - about a month before its 10-year leases expired - when it applied for a five-year "suspension of production".

Such extensions are "fairly common", said Elmer P Danenberger III, a former federal official who oversaw US offshore-drilling rules until he retired in 2009.

"I can honestly say that people who manage that program are really strict, which they need to be, or it will be abused. If you don't have a commercial discovery and a plan for moving ahead at the end of the lease term, that's it."

In February 2009, the government denied Exxon's request for an extension and, after a brief appeal, denied it again the following April. Exxon said in a letter at the time that it was "committed" to producing the oil, but the government said it didn't present a specific plan. The government contended this didn't meet legal requirements and denied the application.

More appeals followed, but Exxon lost its final appeal in May. The final decision hinged on whether Exxon had a concrete "commitment" to produce the oil in December 2008, when its lease expired. The director of the Office of Hearings and Appeals at the Interior Department ruled that it didn't.

Exxon is known in the industry for moving slowly and studying all options exhaustively before committing billions of dollars. But even if it loses this court case, all might not be lost. The Julia field consists of five leases - or square blocks in the Gulf of Mexico - and only three are being disputed. The other two aren't set to expire until 2013.


Additional reporting: Deborah Solomon, Angel Gonzalez

http://www.theaustralian.com.au/business/companies/billions-at-stake-as-exxon-fights-for-lease-on-gulf-of-mexicos-julia-field/story-fn91v9q3-1226117513708

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