John,
I don't know where to start.
Average return on capital in the Oil & Gas industry is around 5%. Yeah, companies occasionally make a LOT of money, but it takes a LOT of capital to do it. It is not uncommon for a deep offshore well to take $20 billion dollars and 15 years to get from engineering design to first delivery. Quite a drain on the bottom line for a really long time. If a movie company (for example) ever got as low as 5% return on capital top management would be fired the day the numbers were published. Similar risk profiles, but very different expectations.
The much reported export of gasoline is proof that complicated concepts should not be reduced to sound bytes. Crude moves to excess refining capacity. U.S. refineries are REALLY old and no one really knows how much longer they can last, but while they last they are quite effecient at turning certain crude oils into marketable products. There are refineries in the world that do a better job for certain kinds of crude, so that kind of crude is exported to those refineries. Other kinds of crude fits the capabilities of U.S. refineries and it is shipped here (shows up as an import) refined (shows up in the GDP), and shipped home (shows up as an export). The refinery gets a processing fee. These values are netted out on the U.S. import/export balance and the net is 75% of U.S. consumption is imported. All of these movements are efforts to make the global supply/demand balance as effective as possible.
Undrilled acreage is another concept that shouldn't be reduced to a sound byte. I live in the San Juan Basin of Northern New Mexico. In this basin there are nearly 40,000 wells. Some formations are fully drilled. Some aren't. One formation that has huge drilling potential (in terms of number of undrilled blocks) is called the "Dakota". The Dakota formation is very resistant to flow (we call that "tight") and a good Dakota well will make 100 MCF/day--the wells cost $1-1.5 million to drill and equip. If gas is $2/MCF (which is where the EIA says prices are heading) then it will take 13 years for that well to pay off. Most companies see that kind of a return as unacceptable and don't drill them. If the government expired those leases it would be unlikely that they would sell again. That is the reality. There is not a queue lined up to get Dakota leases.
You make the insinuation that the industry is somehow evil for taking advantage of legal tax loop holes. Congress writes the tax code. One example of a "loop hole" is the Section 179 tax credits. This program was created in 1988 and said that since unconventional gas production contained a very high risk (because no one knew how to operate it), it was not economic to drill it at $0.80/MCF prices currently in effect. The tax credit said that if the industry would take the risk, then we could deduct an amount about equal to current sales price from our taxes. Heck of a good deal. It caused companies to reconsider drilling CBM, and tight gas. By the time the tax credits expired in 1998, we had learned enough about these tough plays that we could start looking at Shale Gas with a reasonable expectation of success. Today unconventional gas makes up over 50% of U.S. natural gas supply. Without the Section 179 tax credit we would not have learned how to develop these resources (with the tax credit we had to start over about 4 times after going down dead-end paths, without the tax credit most of us would have stopped at the second or third failed attempt).
Congress writes the tax code to manipulate the economy into directions that Congress desires. If people follow the tax code how the hell do they become villains. If Congress is so weak spirited (and they are) that they are susceptible to influence, then why do we hate the people who legally try to educate them instead of the Congressmen themselves? I think the villains in Washington are the people we've elected.
David