Gasoline Madness;When to Stop

[WA1GFZ]

so how is it whenever these towel heads get in a jam we come running to us toprotect them. Screw the rest of the world we provide protection we should get a deep discount.
WE NEED OFEC (org of food exporting countries)

[K3ZS]

If the dollar had not been devalued relative to the rest of the developed world's currencies, due to deficit spending and low interest rates, gas would be about $2 a gallon, even with all the other reasons for the increased cost.    The higher gas prices in other countries is due to 50% to 75% taxes.    These taxes go to support their transportation infrastructures, including bus and rail transportation.    Not sure I would like those taxes, but a good rail system would look here and now.

[KA1ZGC]

so how is it whenever these towel heads get in a jam we come running to us toprotect them. Screw the rest of the world we provide protection we should get a deep discount.

You mean use our guns as "persuasion tools" to force the price lower? You don't approve of our government acting like bullies to get a cheap price on oil, remember?

Oh, nevermind.

I thought the most important lesson congress got (and ignored, I'm sure) is that rising demand will always overcome stagnant supply. Now we have the political parties each choosing a different approach, and ruling the other approach out as though they're mutually exclusive. They're not.

There is no reason whatsoever we can't bring alternative energy sources to bear and drill for oil in new places at the same time. The guys in Washington just don't care. They're only doing what they think the voters want them to do, and they're scared to death that if they stop and say "hey, why can't we do both" they'll be run out of office.

I wonder what the per-day price tag is on these Washington hearings? I wonder what would happen if that money were invested towards potential solutions instead of a congressional photo-op bitch-fest?

[KA1ZGC]

Not sure I would like those taxes, but a good rail system would look here and now.

Too late for that. Uncle Sam bought out all the passenger rails because they were going bankrupt, now everything's state-controlled (in other words, hopelessly inefficient). Don't expect anything smart from Amtrak.

We've got plenty of cargo travelling by rail, but even that will be severely disrupted thanks to the flooding in the midwest.

[WA1GFZ]

I didn't say use our guns....Just tell them next time don't call on us then go to France for vacation while the US mil does the dirty work....you know like in '91
Where is Kuait you know our fair WX friends in all this.

[ka3zlr]

An Above ground MagLev Public system of transportation would be a wonderful step, I've always wondered what happened to that Idea, leave the rails for the Heavy Transport.

With Above ground many obstacles can be over come, Highly efficient, Board Platforms can be placed anywhere...Maintenance and Material Accessibility would have a good mark, To much is wasted on Platform Road Public Busing, it is Inefficient...and a waste of fuel...

Underground is Fine in certain metro areas but with above ground, the sky's the Limit...



 

[K6JEK]

An Above ground MagLev Public system of transportation would be a wonderful step, I've always wondered what happened to that Idea, leave the rails for the Heavy Transport.
...

Chinese maglev running to Shanghai Airport:

http://www.gluckman.com/Maglev.html

[K6JEK]

Citing Need for Assessments, U.S. Freezes Solar Energy Projects

http://tinyurl.com/4sfnxm

I find this pretty amazing. 

[WB2RJR]

K6JEK,

Oh NO!!!!!!!!

Now Mr. "You should buy me solar collectors to put on my house" is having his pet project gored by the enviro-wackos.

Welcome to the club.

BTW, no one in the gov't, federal or state has ever given me a "rebate", "credit" etc. for drilling an oil or gas well.

It is my understanding that part of the cost of the solar collectors on your house was paid for by forcing people to give you money through the government.

You might have to pay $4.00/gal for the oil I find, or $12.00/mcf for the natural gas..................but I'm not forcing you to buy it..........and unlike you, I'd NEVER consider TAXING PEOPLE TO MAKE THEM DO WHAT I WANT.

I am one of the 1,000,000 people who are employed in the oil and gas industry in the U.S.

AND.......I don't think I, or anyone else, should have to pay a dime so you can have solar collectors on your house.

What's the NTIR and the AARR on your solar stuff someone else paid for? 

73

Marty

[K6JEK]

K6JEK,

Oh NO!!!!!!!!

Now Mr. "You should buy me solar collectors to put on my house" is having his pet project gored by the enviro-wackos.

Welcome to the club.

BTW, no one in the gov't, federal or state has ever given me a "rebate", "credit" etc. for drilling an oil or gas well.

It is my understanding that part of the cost of the solar collectors on your house was paid for by forcing people to give you money through the government.

You might have to pay $4.00/gal for the oil I find, or $12.00/mcf for the natural gas..................but I'm not forcing you to buy it..........and unlike you, I'd NEVER consider TAXING PEOPLE TO MAKE THEM DO WHAT I WANT.

I am one of the 1,000,000 people who are employed in the oil and gas industry in the U.S.

AND.......I don't think I, or anyone else, should have to pay a dime so you can have solar collectors on your house.

What's the NTIR and the AARR on your solar stuff someone else paid for? 

73

Marty

The enviro wackos are the Bureau of Land Management. I remain amazed.

I did get a rebate on the solar panels but the rebate came from Pacific Gas & Electric not the government. The solar panels are peak generators. They produce max power right during peak demand reducing the need to build and run expensive peaking power plants. Nice of me, huh? I don't know if this completely justifies the rebate but that's what they said when PG&E sent the check.  I was happy to take it. They should be happy too. I'm generating more power than I'm using and they get the excess free.

There are significant breaks given to big oil companies.   Maybe you just need to be bigger to take advantage of the largess.

BTW.  That's not my pet project

[Steve - WB3HUZ]

There are significant breaks given to big oil companies.

What are these?

[K6JEK]

There are significant breaks given to big oil companies.

What are these?

I'm curious about that myself.   The current issue of the Economist, June 21 -27, hardly a liberal rag, says this:

"American oil companies receive preferential treatment from their government worth more than $250 billion a year."

But it doesn't elaborate.  I'd like to know.   This issue has a special section on energy which covers everything from nuclear to biofuels and everything in between.  Perhaps if I dig a little deeper I can unravel that $250 billion.

[Steve - WB3HUZ]

Exxon alone paid $30 Billion in taxes in 2007.  The urban legends and mythology surrounding the oil companies is astounding.

[K6JEK]

Exxon alone paid $30 Billion in taxes in 2007.  The urban legends and mythology surrounding the oil companies is astounding.

And bless them for it. That doesn't mean they didn't get preferential treatment from the government.  I don't like quoting second sources so I will see where the Economist got the $250 billion per year number.

I notice the new issue of Consumer Reports has a similar claim.  They say

"The U.S. Government supports the oil industry with billions of dollars of direct and indirect subsidies. ... Those subsidies have included income tax breaks, tax-free construction bonds, and below cost loans with lenient replayment terms"  -- Consumer Reports, August 2008, page 65

That's a little more concrete but I'd like to see the details. Still, neither the Economist nor Consumer Reports is known as a purveyor of urban legends and myth.

And you know what?  Maybe this has been the right thing to do, to use our tax dollars to encourage the oil industry. Now, however, I think it might be time for some new stuff too.

[Steve - WB3HUZ]

"The U.S. Government supports the oil industry with billions of dollars of direct and indirect subsidies. ... Those subsidies have included income tax breaks, tax-free construction bonds, and below cost loans with lenient replayment terms"  -- Consumer Reports, August 2008, page 65

Even if true, this is meaningless without context. Other industries and businesses get similar breaks. Unless oil companies get disproportionately more given the amount of taxes they pay, it comes off as more typical oil bashing by know nothings and politicians.

Even your use of of the phrase "preferential treatment" is baseless. If others get similar breaks, it's not preferential. As far as income  tax breaks, we ALL take advantage of whatever we can when it's tax return time. Pointing it out when someone else does it seems hypocritical.

[K6JEK]

"The U.S. Government supports the oil industry with billions of dollars of direct and indirect subsidies. ... Those subsidies have included income tax breaks, tax-free construction bonds, and below cost loans with lenient replayment terms"  -- Consumer Reports, August 2008, page 65

Even if true, this is meaningless without context. Other industries and businesses get similar breaks. Unless oil companies get disproportionately more given the amount of taxes they pay, it comes off as more typical oil bashing by know nothings and politicians.

Even your use of of the phrase "preferential treatment" is baseless. If others get similar breaks, it's not preferential. As far as income  tax breaks, we ALL take advantage of whatever we can when it's tax return time. Pointing it out when someone else does it seems hypocritical.

Yes, exactly.  Many industries get special breaks.  If you google "oil industry subsidies" as I did you'll be inudated with studies that say the oil indsutry gets better breaks than other industries.  This is reflected in their overall tax rate, which seems to be about 7% lower than the other guys.  And there are many breaks that simply don't apply to widget manufacturing so they are hard to compare.  Read a dozen of these studies and judge for yourself.

Gosh folks. Can we stop this?  Way back someone accused me of wanting to tax others to pay for my solar panels.  Exactly the opposite is happening.  I paid my hard earned cash for my solar panels.  My local utility company gave me rebate.  Thank you.  Your tax dollars were not involved.  No one gave me an interest free loan.  I do not get a preferential income tax rate. I have no lobbyist in DC. In the meantime, my tax dollars are subsidizing the oil companies, which is deemed OK because other industries are subsidized too.  Most analysts think  the oil companies have the best deal period, a better package of tax breaks, free loans and other goodies than anyone else.  I didn't even say that was a bad thing. But let's not pretend that giving a few breaks to say the solar thermal guys (not my pet project) is wild and crazy, unheard of, and unfair to hard working fossil fuel guys. The new guys just want to get in on the gravy train that is our federal budget, a gravy train which my solar panels have nothing to do with.

Personally, I think we'd all be better off with less concentrated everything, less big oil, less centralized power,  less big lobbyists, less big government, less big deficit, a little more local everything but I'm just old fashioned.

[ka3zlr]

What the Market Bares is relative and a given, and Still Nothing from the Fed Reserve, the creator of the overall problem, if folks would take the time in this country and understand how currency werks, ah well.....it's beyond me..witch hunting Business isn't the answer...

I have however been starting to hear and read some issues on Homebrew Diesel, it seems it's coming to light "to the Tax Minded"... in some states...I am looking for more articles on the net in regard to this.

We Can't have our citizens home brewing fuel now can we..? We can't have them adapting and improvising...Oh No no...

[WB2RJR]

In his next post K6JEK is:

1.) Going to list all the oil companies who received government backed interest free loans.He has said this more than once, I want to see it backed up. Should be no problem as he has been saying it over and over.

2.) He is going to give us the specific IRS rules which allow us as a "oil company" to be taxed 7% less than anyone else. ( the accountants which do my income tax are really interested in this one)

3.) K6JEK is going to show us the EXACT way oil companies received money from the government.

Steve has asked K6JEK basically for this and he has not delivered.

K6JEK has done arm waving and liberal mumbo-jumbo.

K6JEK........... PUT up or Shut UP.

I want to see EXACTLY how this crap you claim about oil companies HAPPENS.

[K3ZS]

I remember a news story from a while ago that the oil companies somehow do not pay royalties on oil from the Gulf of Mexico.    I don't remember the details, but it goes back to the early '90s.     I think it was something to do with the fact the government didn't bill them for the royalties.

[WB2RJR]

K3ZS,

I guess you have never sold oil or gas from a well. If you do, you find out real quick that the person buying it wants to see the Division Orders. They list all the owners and Royalty holders in a well.

You see the company buying my oil or gas does not give me the Royalty interest share or any severance taxes.......they pay that directly to the state or the Royalty interest holder.

So if the Federal Government is the Royalty Interest Holder (average 19% on all government land, 37.5% on new leases) an oil company would NEVER see this money. It is sent directly from the company buying the product to the government.

When you read this story about Oil Companies not paying Royalties to the Government......you didn't ask the question........How the hell could this have happened given the way these payments are set up.

Anything is possible........but if you get caught pulling a scam like this YOU WILL BE IN PRISON.

[K3ZS]

Like I said, I didn't remember the details about the royalties.   Since my last post I tried looking up what I had heard.    Apparently it was a big screw up on the part of the federal government of not enforcing or collecting royalties from Gulf of Mexico oil, from whoever they were suppose to collect them from.    I am no expert, just stating about what I thought I had heard on the news years ago.    I am sure part of my state pension fund benefits from some of this, in fact the Pennsylvania State retirement fund is one of the best performers.

[W3RSW]

Oil getting tax breaks?  Preferential treatment of $250 bil.?  So $30 billion should be $250 B?

Sort of like the perpetual "going out of biz sales" one sees advertised, guess who discounts what's marked up in the first place?  Yeah, your friendly thieving government aided and abetted by jealousy, egalitarianism run amok, and a very good example of "bite the hand that feeds you."

"Big Oil" is the absolutely most efficient producer, processor, distributor and marketer of any essential product in the world.  Similar to any utility, be it water or whatever, it's taken for granted and eventually demanded as a Right.  Why do you think the speculators are riding the oil wave in the first place?  Because they recognize absolute value when the see it, especially in a world of real estate bubbles, monetary inflation caused by clueless governments, and yes, sure... human nature being what it is, just a touch of greed.  You might also wish to see what business pays the best, all across the board, not just upper mgt. and CEO's... See what starting salaries for petroleum engineers are in comparison to say, electrical.... uh, and hate to say it but, say, civil. 
    As I've mentioned before in another thead, the industry can't find enough drillers, tool pushers, rig hands.. you name it, let alone professionals.   

Granted even oil can have a modest bubble, but right now it's riding the same wave as gold, silver, copper,...   Sound like junk metals?  ... of course not.  Pork bellies... well maybe, but then again it's a food product with all the production energy entailed...  and based on corn, n'est ce pas?...   

Couple those cost factors with real costs being manipulated by politics and you have a great receipe for buying stock in BP, Exxon-Mobile, Royal Dutch Shell....     Hmmm, too bad the majority of oil business is no longer in the U.S.  Great theater though, roasting a bunch of U.S. CEO's in front of an ever stupider congressional committee.  Well your congressmen sure know their audience...     yeah, when a majority party is committed to keeping you stupid, divided, and constantly clamoring for more heads.

Anyone who believes "lesser" taxes than paid by others are a break for a business ought to really think about who sets tax rates in the first place and then who pays them. 

So again, a discount?  From what?  (Hint - think arbitrary, capricious and unenlightened. )

My instruction in petroleum engineering came from an era when drillers (risk takers) got a 27 1/2% depletion allowance. That "largess" was tempered by various state agencies such as the Oklahoma Interstate Compact Commission, The Texas Railroad Commission, etc., which commissions also set "allowables," i.e. you were only allowed to produce so much per well in the interest of conservation of pressure, spacing of wells and efficient reservoir draw-down   Yeah, that's when governments still had intelligent agents who knew the difference between real conservation and feel good, political "green."  They were (surprisingly like your 'hated' Saudis) interested in preserving their tax base for as long as possible.  The by-product was hoped for reasonable price fluxuations.   Even so, oil prices rose and fell, drastically on a roughly 20 year cycle.  Boom or bust....
I digress.

Well "we've come a long way baby."   Every business these days is suspect by at least two generations raised as good little communists in schools based on cradle to grave liberalism, a philosopy that doesn't know the difference between capital generation vs. jobs that are 'rights.'    Paying "your fair share" even though anathema to earning your own way is now just the latest euphanism for increasing taxation of the ever smaller proportion of decent workers, earners and savers.  Yeah, "tax 'em 'till they squeek."

Knee jerk reaction to price fluxuations by taxation will always (yes, always) yield lesser of the commoditiy regulated and taxed.  Long term it will also always guarantee higher prices to the ultimate consumer.  Us.   If world forces drive up prices, taxation and over-regulaton will always drive it up more.

So if you want some relief from spiraling costs, a refreshing way might be to lower taxes on the business providing the world with plentiful oil and products.  And while we're at it, bring back intelligent regulation if we must, that which is based on true conservation.   Open up exploration to the true risk takers. Forget the  faux cosmetics of perceived off-shore blight ( they're really out of sight production platforms.)

Think positive; think long term.  Down with the "we can'ts."
 
Plan for the long term instead of using, proposing ever more oil tax money for ever epanding wellfare; use it for subsidizing, say a Hydrogen economy, or nuclear, ....something positive.   Give, say, nuclear waste your best shot, don't demonize it out of hand.

The world will eventually run out of oil; but if you intelligently reduce anything by a fraction of a percent per year, it will last to infinity....   That is after you can prove that reserves ARE dwindling.  They aren't and haven't been despite many cycles of naysayers projecting such for as long as I can remember and for as long as the history of oil production.   Radio amateurs, of all people, ought to be for technology.

Of course there's always a real break point to sharply cut off an infinite decline rate dream,  but contrary to what your media bathes you in.. it is a long, long way off.   China and India will choke on their own fumes if they don't observe some true conservatism..   Things have a solid habit of rightening themselves if not fueled by a scared populace driven by controlling media and innumerate (lnumerically illiterate, -thanks Steve) politicians.   

[K6JEK]

I remember a news story from a while ago that the oil companies somehow do not pay royalties on oil from the Gulf of Mexico.    I don't remember the details, but it goes back to the early '90s.     I think it was something to do with the fact the government didn't bill them for the royalties.

This is probably what you're thinking of.   Below the headlines then links to the complete stories:

An attempt to keep oil companies from reaping as much as $10 billion because of an error involving royalty payments is gaining momentum in Congress.
http://www.foxnews.com/story/0,2933,200341,00.html

House rolls back oil company subsidies (see 3rd paragraph from end)
http://www.usatoday.com/news/washington/2007-01-18-house-oil_x.htm

Big Oil Subsidies Dodge the Ax
http://washingtonindependent.com/view/big-oil-subsidies

[Bill, KD0HG]

I saw this interesting story in the online Chicago Tribune..

"...Some experts say high energy costs are altering global trade and slowing the pace of globalization.

It takes about 7,000 tons of bunker-fuel to fill the tanks of a 5,000-container cargo ship for a trip from Shanghai to Los Angeles. Over the last year and half, the cost of that fuel has jumped 87% to $552 a ton, according to the World Shipping Council, boosting the cost of a fill-up to more than $3.8 million.

"To put things in perspective, today's extra shipping cost from East Asia is the equivalent of imposing a 9% tariff on East Asian goods entering North America," said Rubin of CIBC World Markets. "At $200 per barrel, the tariff equivalent rate will rise to 15%."

..Local ports could lose business if shipping costs get so out of hand that companies begin shifting production back to North America from Asia -- something that's happening in the steel industry, Rubin said..."

-------------------

This never occurred to me..That at some point it might again be more cost effective to produce something in the CONUS than to import it. I can see lots of potential angles to this shift, the next decade is certainly going to be interesting; there's going to be opportunities that no one's thought of.

-Bill

[k4kyv]

Or else go back to sail ships.  A decade or so ago I recall a prediction that just that would happen, and that navigation by sail would become more reliable and efficient in the future, aided by computerised technology.

The ultimate folly has to be importing bottled water from Europe.  Not counting  transoceanic transport cost, it has been estimated that the total amount of energy used to produce and deliver one bottle of water is the equivalent of filling the same bottle a quarter full of oil.