There is an interesting article written by William La Jeunesse on the Fox news Web site. The title of the article is “Offshore Oil Suffers From Obama Restrictions on New Drilling.” The focus is the need for increased oil and gas production in the US and the obstacles that stand in the way. The article is built around interviews with Marathon Oil Co. and Cathy Landry, a spokeswoman for the American Petroleum Institute. The author notes the “generous tax subsidies to wind and solar” granted by the Obama administration, which overtly favors green energy. La Jeunesse follows this comment with the observation that at the same time alternative energy is getting subsidies, taxes on oil companies were hiked by $70 billion over five years, “including $122 million on leases the administration considers non-producing.” Not surprisingly, Oil companies like Marathon are concerned. Not only could the taxes decrease the amount of money going to exploration, Cathy Landry said, the increased burdens on the industry could cost jobs as companies cut back on domestic production “We all have hope for green energy, but it is going to take time – and in the meantime, oil and natural gas will have to be the bridge to the energy future,” Landry said. The problem, of course, is that oil and gas are costly to find and produce, and the government is putting road blocks in the way instead of finding ways to help solve this problem. L Jeunesse writes, “Congress lifted its 27-year moratorium on drilling off Florida and the East and West Coast last year, but billions of barrels of that oil remains untouched and off-limits because the Obama administration has postponed development there.” This doesn’t exactly bode well for the “bridge.” Meanwhile, an article published in the “Wall Street Journal” takes a look at some of the problems with big oil. Writer Liam Denning opens his story with an interesting statement: “Thunder Horse turns 10 next month. BP’s billion-barrel oil field, discovered in 1999 in the Gulf of Mexico, is a source of pride. It also is a reminder of what ails the oil majors.” The ailment Denning diagnoses is the inability to replace reserves with big oil finds. He examines a number of international operating companies and finds them lacking, observing that adding reserves through mergers and acquisitions was a short-term fix and that the real solution is to find more oil Denning cites calculations by Neil McMahon of Sanford C. Bernstein that show less than half of BP’s additions to reserves over the past five years have come through its exploration efforts. After presenting analyses of a number of operating companies (the vast majority of which are shown in a rather bad light), Denning concludes: “The majors need to reassure investors that the regular distributions of cash are sustainable. That means, when it comes to replacing barrels, proving they can go out and find, not buy, more Thunder Horses.” This is a nice conclusion, but the fact is that it doesn’t tell us anything we don’t already know. Finding oil and gas in significant quantities is the goal of every operating company. The problem is that with more restrictions on drilling and higher taxes, it is going to be much more difficult for operators to find oil and gas, and that means they will not be able to assure regular distributions of cash. The government initiatives for green energy undercut the US investor by making it much harder for oil companies to pay out dividends. And if Landry’s prediction is accurate, the initiatives also have the potential to cost jobs.