Oil heading to $70 per barrel?

[Chmee]

leave it to Winnow to set the earnings benchmark at beating the largest corporation in the world.

It depends on your definition of largest, but going with the Fortune 500 mentioned earlier in my last post, Microsoft I don't think makes the top 100. Wal-mart is the big boy with revenues of ~288 billion.

[Chmee]

Who is making money off this situation?


Why is it being allowed to happen?

Lots of people I imagine are making money off of it, particularly oil companies.

As for it being "allowed" to happen, how precisely would you stop it and what be your moral justification for doing so?

[Dregor Thule]

Lots of people I imagine are making money off of it, particularly oil companies.

As for it being "allowed" to happen, how precisely would you stop it and what be your moral justification for doing so?

Does spouting stupid shit count as moral justification?

[Nick]

Ow, that burnt!


No really.


ep.

[Jice Virago]

There is no real way to stop it now.

As for a moral justification, well, I think even you, Chmee, would have to conceed that giving tax breaks to companies that posted record proffits last year to drill in formerly protected areas might spark a little moral outrage. I can't believe that no one is bitching about the tax cut these fuckers are getting.

[Chmee]

As for a moral justification, well, I think even you, Chmee, would have to conceed that giving tax breaks to companies that posted record proffits last year to drill in formerly protected areas might spark a little moral outrage. I can't believe that no one is bitching about the tax cut these fuckers are getting.

Hard to say, I don't know exactly the structure of the tax cuts you are referring to. Certainly there are badly structured, overly preferential taxes out there. But if you are implying a more general case of "we aren't charging them enough" then since I am in favor of completely eliminating the corporate income tax, I am not particularly on board for that one.

For a good explanation of why eliminating the corporate income tax would be a good thing, see the following.

http://www.janegalt.net/blog/archives/000174.html

[Metanis]

I don't drive a SUV. I don't think I deserve to pay for them. They need an extra tax for that.

I don't understand this post. How do you feel you are subsidizing other motorists?

[Metanis]

There is no real way to stop it now.

As for a moral justification, well, I think even you, Chmee, would have to conceed that giving tax breaks to companies that posted record proffits last year to drill in formerly protected areas might spark a little moral outrage. I can't believe that no one is bitching about the tax cut these fuckers are getting.

Jice, you're so full of shit your eyes are brown.

Please read this post at CNNabout the energy bill.

The measure funnels billions of dollars to energy companies, including tax breaks and loan guarantees for new nuclear power plants, clean coal technology and wind energy.

Hmmmm, I don't see oil companies even mentioned there...

and then this...

It does not include Bush's desire to open the Arctic National Wildlife Refuge to oil exploration.

Ill-informed morons like you Jice are a significant reason for the current price of energy.

[Dregor Thule]

*cough*

http://money.cnn.com/2005/07/29/markets ... /index.htm

Large oil producers stand to benefit, said Rick Mueller, senior oil analyst at Energy Security Analysts. He said companies such as Exxon Mobil (Research), ConocoPhillips (Research) and BP (Research) are among the winners of the bill, given their strong exploration presence in the Gulf of Mexico, which produces 1.5 million barrels of oil a day.

The bill will provide an elimination of royalties that oil and gas companies pay the government for drilling in the deep water in the Gulf of Mexico. While details still need to be finalized, those companies that drill deeper will receive more relief, said KeyBanc vice president Kim Pacanovsky.

Perhaps that's what he's talking about, hmm? I think perhaps Jice's eyes only look brown to you because you're viewing the world through shit-tinted glasses yourself.

[kyoukan]

corporate welfare for oil co's worth 100's of billions of dollars haha.

it amazes me that you SUV driving amuhricans aren't more outraged at bush's oil reserves. it's high school economics principle of supply and demand. he keeps wasting your tax money filling the oil reserves and the oil co's keep jacking up the prices because of it. but you will all bend over and giggle while his junta bend you over the rear bumper of your canyonero and fuck you up the ass as long as he keeps lying to you about banning abortion and outlawing queers and every other retarded crap that you idiots seem to equate with morality.

[Metanis]

*cough*

http://money.cnn.com/2005/07/29/markets ... /index.htm

Large oil producers stand to benefit, said Rick Mueller, senior oil analyst at Energy Security Analysts. He said companies such as Exxon Mobil (Research), ConocoPhillips (Research) and BP (Research) are among the winners of the bill, given their strong exploration presence in the Gulf of Mexico, which produces 1.5 million barrels of oil a day.

The bill will provide an elimination of royalties that oil and gas companies pay the government for drilling in the deep water in the Gulf of Mexico. While details still need to be finalized, those companies that drill deeper will receive more relief, said KeyBanc vice president Kim Pacanovsky.

Perhaps that's what he's talking about, hmm? I think perhaps Jice's eyes only look brown to you because you're viewing the world through shit-tinted glasses yourself.

You're about as moronic as Jice.

How much you think it costs to run a deep water drilling platform? So they're going to get their taxes reduced? Big effin deal. You ever hear of incentives? You maybe figure out that if we need more oil that we should let the oil company investors keep a little more of THEIR money? Who the fuck educated you clowns?

Some day you will figure out that "government" can't produce jack shit. When something needs to get done then government needs to grease the skids and get the hell outta the way.

You think this hurts the little guy? Who the hell is getting hurt now? So what has 30 years of intervention and obstruction gained? The only assholes getting rich is the lawyers and beaureaucrats and the Ted Kennedys of the world.

[Zaelath]

If you're going to run around calling people morons, perhaps you should pick up a dictionary and look up "royalty" and "tax", and get back to us.

[Chidoro]

Who the fuck educated you clowns?

Jesus, if that isn't on everyone's mind regarding your comprehension skills.

First you say that the bill doesn't mention oil companies, then you're proved to be outright wrong by showing that they are the predominant benefactors, then you say they should keep their own money anyway. Should someone show how stupid your latest moronic retort is so that we will get to read yet another gem from your fingers?

[Siji]

[Arborealus]

The only assholes getting rich is the lawyers and beaureaucrats and the Ted Kennedys of the world.

Who the fuck educated you clowns?

Someone who understood subject verb agreement...

[Wulfran]

Well one thing I see here is that some people have an incomplete understanding of royalties in the oil and gas business. This may be more than some of you want to know about it but...

Royalties are paid to those who own the mineral rights, be they the government or a private individual or corporation, by the producer of the petroleum, on a per volume basis. It is an exchange of money for the right to produce and sell the product. Thus if Dregor owns the mineral rights to an area and Metanis wants to produce it, he agrees to pay X dollars per barrel of oil equivalent (they use BOE as opposed to barrel to standardize pressure/temperature conditions and also to include natural gas, propanes, butanes, etc). When a government owns the mineral rights to an area and recieves royalties from the oil companies, it is not a tax. It is essentially the oil company purchasing (or to be more accurate leasing) the ability to produce. If a government gives oil companies a break in royalties, they are selling their "property" at a discount.

Now, how do you, as a member of an agency that owns substantial mineral rights wish your agent (the government) to deal with these rights? Do you want to discount them in a market that is currently a sellers market or do you wish to get what you can for them?

How much you think it costs to run a deep water drilling platform?

This varies a bit but around $8 per barrel and no more than $10 a barrel in the Gulf Coast (that is E & or Exploration and Production cost... in other words the price to find it, produce it and transport it for the producer). On shore varies a bit more but because of the initial scales tending to be a lot smaller: offshore you need so many thousand barrels a day to make it economical and on shore the volumes drop dramatically because of the initial infrastructure and thus capital cost. The reason a lot of oil companies love the Middle East is because you have high volume wells, on shore, that produce high quality and require little refining (the E&P costs can be as low as $2-3 per barrel). However, there are oil companies in the Western Sedimentary Basin (along the east slope of the continental divide in US and Canada) and other areas in North America that can make money on wells that produce as little as 5 or 10 barrels a day.

Now costs do go up as the facilities age (increased mechanical maintenance costs) and as they age the reservoirs also will produce smaller volumes as they lose pressure (eventually dropping to nothing if you go long enough), so the economics of operating older facilities get tighter, but you have to remember these companies were making money 6-7 years ago when oil was $20-25 per bbl... lowering royalties (usually an incentive to promote exploration by increasing profit margins for the producers) seems backwards when the commodity price is so high.

[Voronwë]

Now, how do you, as a member of an agency that owns substantial mineral rights wish your agent (the government) to deal with these rights? Do you want to discount them in a market that is currently a sellers market or do you wish to get what you can for them?

That was a great post Wulf.

Are you saying that, it would be a fair criticism of this energy bill for an American citizen to be irked that the US Govt is making less revenue off of its mineral rights than the market would bear at current?

[Seebs]

When I become president ...

I will richly pay and sequester, exactly like the Manhattan Project, a group of scientists, physist and engineers to focus solely on alternative fuels or make Hydrogen an affordable reality.


How nice would it be to go back to ignoring places like Iraq, Iran and Saudi Arabia much like we do with any African nation?

Ahhh .. peaceful bliss.

[Wulfran]

Now, how do you, as a member of an agency that owns substantial mineral rights wish your agent (the government) to deal with these rights? Do you want to discount them in a market that is currently a sellers market or do you wish to get what you can for them?

That was a great post Wulf.

Are you saying that, it would be a fair criticism of this energy bill for an American citizen to be irked that the US Govt is making less revenue off of its mineral rights than the market would bear at current?

Well you have to make a value judgement in terms of will the discount be worth more to your overall economy (in terms of the oil companies investing more in research, development and expansions). IMO, having worked in the oil & gas industry, you'd be better off taking the higher royalties It comes down to who is accountable to whom: the government's responsibility is to its citizens and the country as a whole, whereas the oil companies are primarily responsible to their shareholders.

[miir]

Metanis = dumb
Wulfran = not dumb



That is all.

[Dregor Thule]

Good post Wulf. Tax break was the wrong term to use, but it was a break all the same. You're right, it's pretty backwards.

[Dregor Thule]

When I become president ...

I will richly pay and sequester, exactly like the Manhattan Project, a group of scientists, physist and engineers to focus solely on alternative fuels or make Hydrogen an affordable reality.


How nice would it be to go back to ignoring places like Iraq, Iran and Saudi Arabia much like we do with any African nation?

Ahhh .. peaceful bliss.

One day those mass graves will be oil!

[Tangurena]

Modded Hybrid Cars Get Up to 250 MPG

Err, only if you assume electricity is free. Once you factor in the cost of generating the electricity, your hybrid is still getting the same mileage. The way most people drive their hybrids, the mileage they are getting is high 30s low 40s for mpg. There are a couple lawsuits about this, which will get tossed out.

I don't drive a SUV. I don't think I deserve to pay for them. They need an extra tax for that.

I don't understand this post. How do you feel you are subsidizing other motorists?

Vehicles over 7000 pounds GWV get a tax break. Especially when leased by a business. So you are paying higher taxes, in order for those companies to get a tax break for buying gas guzzlers. Which is part of the reason that so many SUVs are on the road. 7000 pounds used to be the cutoff for considering fuel economy, which was why Rolls Royces were exempt from CAFE: they all weighed in over the 7000# breakpoint.

I'd like to see the gas guzzler tax reinstated. Maybe as simple as an extra $1,000 per mpg under 30. That would pay for the war in Iraq real fast. But the car companies won't like it, as they make 3x the profit on an SUV that they make on a passenger car. Ford, GM and all the rest have become addicted to the cheap profits of SUVs and will squeal like stuck pigs if you try to take their candy away.

The revamped bill also calls for the U.S. to nearly double is usage of ethanol to 7.5 billion gallons by 2012

Ethanol, as it is made here in the US, is a way for companies to wallow at the public trough from hand outs, of which ADM is the worst abuser of corporate welfare. The way we make ethanol (for gasohol) involves burning 10 gallons equivalent of gasolene to make 8 gallons (equivalent of gasolene) of end product. The Brazillians don't use high energy inputs to make their ethanol, so they actually get more energy out of the stuff than what they put into it.

I think biodiesel will become more and more important over time. The way we've encouraged development and population movement in the US in the last 50+ years, we would have a civil war if fuel for cars disappeared. Biodiesel is diesel fuel you make from vegetable oils. Some folks run their diesel cars on used french fry oil. Arid regions could be growing jojoba for its oil. Places like ND grow sunflower and flax already, those are oily seeds. Getting it cost-effective would be the challenge.

[Metanis]

I searched quite a bit to find more specific information on the so-called tax breaks for big oil. Details on the energy bill are pretty difficult to obtain. Having said that, I will admit my original source of information, CNN did not report on the tax breaks for big oil. And it's very difficult to find a source explaining the breaks are really reductions in royalty payments. It appears that less than 25% of the energy bill is geared to big oil and exploration. Upon further review I must still contend that Jice's comments were ignorant and short-sighted. Why should people feel moral outrage at big oil? They didn't hold up this energy bill for years like the Democrats. So the timing stinks. Blame obstructionists in congress. Blame the Sierra Club. Blame environmentalists in general. Blame Democrats and Republicans both for behaving like politicians. They both loaded up the bill with giveaways. All the more reason to take power away from the politicians. Vote Libertarian and let the marketplace decide.