What oil subsidies?

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Stoaty said:
I guess you don't live in an area where fracking has polluted water supplies.
I guess you haven't seen the environmental destruction from the tar sands.
I guess they aren't removing mountain tops where you live to get coal, polluting the streams.
I guess you haven't noticed the Republican plan to kill the EPA.
I guess you haven't noticed dead trees from the bark beetles, tied to global warming (I am seeing this where I hike; the warmer winters aren't sufficiently cold to kill the bark beetles, thus the increasing damage).

The Republicans CREATED the EPA, now they want to bring it back out from under the AWG cultists. Not to get into a boring long debate on each bullet, did you read the recent EPA news regarding fracking and water contamination?

http://www.businessweek.com/news/2012-03-30/epa-agrees-to-dismiss-well-contamination-case-against-range" onclick="window.open(this.href);return false;

"EPA Agrees to Dismiss Well Contamination Case Against Range
By Mike Lee on March 30, 2012

The U.S. Environmental Protection Agency agreed to end a lawsuit that would’ve forced Range Resources Corp. to fix natural-gas wells the government said were contaminating water in Parker County, Texas.

The agency withdrew an administrative order yesterday and joined with Range seeking dismissal of the case in a filing today in federal court in Dallas. The government wants to “shift the agency’s focus in this particular case away from litigation” and instead test water wells in the area, the agency said in a statement.

EPA ordered Range to fix leaks in the area in 2010, saying state regulators at the Texas Railroad Commission weren’t acting fast enough after residents complained of gas in their water wells. Range, based in Fort Worth, Texas, said gas was already present in local water and its operations weren’t the cause.

Range uses hydraulic fracturing in Texas’s Barnett Shale, shooting water, chemicals and sand underground to get oil and gas from dense rock formations. Environmental groups, including the Natural Resources Defense Council, say the technique known as fracking can contaminate local water supplies.

The EPA said in 2010 that the wells were fractured; it didn’t say whether fracking caused the gas leaks.

“It is very important for people who live in that community to trust that their environment, safety and health is protected,” Matt Pitzarella, a Range spokesman, said in a telephone interview. “We believe this withdrawal will help.”
Sampling Water Wells

The decision is “a vindication of the science-based processes at the Railroad Commission,” Barry Smitherman, chairman of the three-member state agency, said in a statement.

Range will sample 20 private water wells in the area each three months for a year and turn over the results to the federal government, according to a letter provided by the EPA. Range may also turn over data it got from state regulators. Pitzarella said the company had already committed to doing those tests before the EPA withdrew its order.

The EPA is conducting a nationwide study to determine if gas drilling and fracking contribute to water contamination.

On March 15, the agency said gas found in 11 water wells in Dimock, Pennsylvania, didn’t pose a health risk, a finding three scientists questioned after reviewing the results and seeing elevated methane levels.

The agency agreed with Wyoming state regulators on March 8 to conduct more tests at a site in Pavillion, where initial results found evidence that fracking contributed to water pollution. State regulators and industry officials questioned those initial results.

Range rose 2.1 percent to $58.14 at the close in New York."
 
LTLFTcomposite said:
PaulScott said:
Interesting that you think most EV buyers are conservative. That may be true, but I've delivered well over 200 LEAFs and I'd say at least 80% are very liberal and another 15% are moderates with maybe 5% conservative.

I wish I had the reference to support this, maybe someone else will recall, as a group Leaf buyers supposedly:
  • Have 130k household income
  • Consider themselves conservative
  • Isn't all that concerned about the environment

There's a general misconception that the affluent are conservative. In the above $100k income range, there's nearly an equal split between conservative and liberal. The #2 correlating factor is education. The educated wealthy are nearly always liberal, and the uneducated wealthy are nearly always conservative. The #1 factor, is heritage. Old money is conservative and new money is liberal.

You can bet your bottom dollar that LEAFs out there are not being bought by the uneducated slugs sitting there with daddy's money...
 
Herm said:
The Republicans CREATED the EPA, now they want to bring it back out from under the AWG cultists. Not to get into a boring long debate on each bullet, did you read the recent EPA news regarding fracking and water contamination?

http://www.businessweek.com/news/2012-03-30/epa-agrees-to-dismiss-well-contamination-case-against-range" onclick="window.open(this.href);return false;
I fail to see how the EPA not doing its job is evidence that it should be scaled back. Since AGW is affirmed by the national academies of science of multiple nations (U.S. included), it is hard to see how it could be considered a cult. There are multiple lines of evidence that climate change is happening, and a lot faster than expected. I see that you only addressed one of the points I put up. I assume you think that mercury from coal plants is good for people? It has taken decades to finally address this problem and likely wouldn't have happened under a "reigned in" EPA that you would like to see.
 
Getting back to the question raised by the OP, I read through this thread and it isn't clear there are any subsidies per se for oil companies. Tax treatment of business activities might be construed as subsidies, but they unless they are specific to oil and gas production I don't see how that counts. Of course there is the question of defense, but how much of that expenditure can be attributed to fighting wars over oil is hard to calculate. No doubt we're spending resources in places we otherwise wouldn't give a rats ass about. But even at that, before we get too high and mighty on our EV horses, we should remember that only about half of oil goes to powering personal automobiles, and life without oil would get ugly in a hurry even if every car was an EV.
 
now what do you suppose all those votes in Congress last month were about?
So a link for the willfully blind among us:
http://thecaucus.blogs.nytimes.com/2012/03/29/obama-repeats-his-call-to-end-oil-subsidies/?scp=2&sq=oil%20subsidies%20vote&st=cse" onclick="window.open(this.href);return false;
March 29, 2012, 11:43 am
Obama Repeats Call to End Oil Subsidies
By HELENE COOPER and JENNIFER STEINHAUER
3:25 p.m. | Updated President Obama called on Congress to end $4 billion in tax subsidies for oil and natural gas companies on Thursday, casting the issue as a choice between plumbing scarce resources versus investing in clean energy research.

“That’s the choice facing Congress today,” Mr. Obama said, before the Senate voted on repealing the tax breaks. “They can either vote to spend billions of dollars on oil subsidies that keep us trapped in the past. Or they can vote to end these taxpayer subsidies so that we can invest in the future. It’s that simple.”
 
LTLFTcomposite said:
Getting back to the question raised by the OP, I read through this thread and it isn't clear there are any subsidies per se for oil companies....

That is so disingenuous. Look here is what Congress was voting on last week:
http://www.govtrack.us/congress/bills/112/s2204/text" onclick="window.open(this.href);return false;
This is the EXACT bill that Obama was urging and that the GOP was so eager to defeat.

Here is the name of the bill: "Repeal Big Oil Tax Subsidies Act"
Why don't you read THAT instead of claiming that the few of us here have failed to meet your standards.
And if you still think that it's all nothing then please explain why the GOP went nuts
 
try the google:

A 2009 study by the Environmental Law Institute[5] assessed the size and structure of U.S. energy subsidies over the 2002–2008 period. The study estimated that subsidies to fossil-fuel based sources amounted to approximately $72 billion over this period and subsidies to renewable fuel sources totaled $29 billion. The study did not assess subsidies supporting nuclear energy.

The three largest fossil fuel subsidies were:

Foreign tax credit ($15.3 billion)
Credit for production of non-conventional fuels ($14.1 billion)
Oil and Gas exploration and development expensing ($7.1 billion)

and more, if you keep looking:

Types of energy subsidies are:

Direct financial transfers - grants to producers; grants to consumers; low-interest or preferential loans to producers.
Preferential tax treatments - rebates or exemption on royalties, duties, producer levies and tariffs; tax credit; accelerated depreciation allowances on energy supply equipment.

Trade restrictions - quota, technical restrictions and trade embargoes.
Energy-related services provided by government at less than full cost - direct investment in energy infrastructure; public research and development.
Regulation of the energy sector - demand guarantees and mandated deployment rates; price controls; market-access restrictions; preferential planning consent and controls over access to resources.
Failure to impose external costs - environmental externality costs; energy security risks and price volatility costs.[2]
Depletion Allowance - allows a deduction from gross income of up to ~27% for the depletion of exhaustible resources (oil,gas,minerals).

its a very very profitable industry. it doesnt need our cash.

seriously, guys. I get what the poster was asking, but you GOPs would do better to argue for the subsidies than try to argue that they dont exist.
 
LTLFT says, "Of course there is the question of defense, but how much of that expenditure can be attributed to fighting wars over oil is hard to calculate."

No it's not!

See this RAND study: http://www.rand.org/pubs/monographs/MG838.html" onclick="window.open(this.href);return false;

It found that the U.S. military spends $80 billion per year on costs directly attributed to protecting our access to oil. That's 55 cents a gallon, BTW.

All of this is exclusive of the war in Iraq, a war that had mostly to do with oil. We're over $1.5 trillion dollars and tens of thousands of dead and wounded soldiers. I will not let anyone deny that oil played a significant part in why we prosecuted that war.

To deny this assertion is to deny those soldiers their due. It's unpatriotic and anyone who thinks that way is not a good citizen. If you want to argue the points of this, by all means let's hear specifics. But you cannot deny the fact of massive external costs of oil. You HAVE to own that!
 
PaulScott said:
...
It found that the U.S. military spends $80 billion per year on costs directly attributed to protecting our access to oil. That's 55 cents a gallon, BTW.
...

All of this is exclusive of the war in Iraq, a war that had mostly to do with oil. We're over $1.5 trillion dollars and tens of thousands of dead and wounded soldiers. I will not let anyone deny that oil played a significant part in why we prosecuted that war.

To deny this assertion is to deny those soldiers their due. It's unpatriotic and anyone who thinks that way is not a good citizen. If you want to argue the points of this, by all means let's hear specifics. But you cannot deny the fact of massive external costs of oil. You HAVE to own that!

I didn't deny it at all, quite the opposite, what I said was that it was hard to calculate. So I stand corrected, apparently the calculation was no problem at all for this think tank: Out of $684B in defense spending, $80B (a suspiciously round number) went to keeping cheap oil flowing.

So with half of oil going to power personal transportation (cars/light trucks), about $40B of that "oil company subsidy" spread across 200M vehicles works out to $200 per vehicle per year.

I would have no problem transferring that $40B to gas taxes if it were removed from taxes elsewhere, as the current structure shifts the costs to general revenues. However it is paid for, you still have to ask though who is the ultimate beneficiary of that $40B expenditure? The big bad oil companies or the consumer? And is it a good investment? And how can you ever calculate the ROI when human lives are involved? Maybe RAND has an answer for that too.
 
BRBarian said:
LTLFTcomposite said:
Getting back to the question raised by the OP, I read through this thread and it isn't clear there are any subsidies per se for oil companies....

That is so disingenuous. Look here is what Congress was voting on last week:
http://www.govtrack.us/congress/bills/112/s2204/text" onclick="window.open(this.href);return false;
This is the EXACT bill that Obama was urging and that the GOP was so eager to defeat.

Here is the name of the bill: "Repeal Big Oil Tax Subsidies Act"
Why don't you read THAT instead of claiming that the few of us here have failed to meet your standards.
And if you still think that it's all nothing then please explain why the GOP went nuts

i see a lot of things i am against here. "clean coal" biodiesel, etc. but still they are currently viable "bridge technologies" that warrant investigation.

the bill as "I understand it" is basically a shift of 26 Billion in benefits from oil companies over to alternative fuel projects along with a bit of "debt reduction". i do not wholly agree with how the money should be spent (i agree with VERY little of the governments spending as a rule) since this bill is like so many others where multiple compromises must be made to get anything done.

what i dont understand is your post? what exactly are you against? do you want to allow oil companies to NOT pay more than 10 Billion in royalties on the oil taken from the Gulf annually? because that is what they are NOT PAYING the government.

now that was a concession made years ago when we were struggling with increasing import quotas and the technology to get oil from the gulf essentially did not exist.

well, it exists now and it is working very well to tune of a 50-60 Billion profit. so they do not need that 10 Billion hand out any more, so why are we (who is paying more than 10 billion daily in interest payments on our debt) still giving it to them?
 
It does look like you have to scroll 3/4 of the way down before you find anything related to short title of the bill.

Sorry, I'm not a specialist in corporate finance and tax law and don't follow all the details. I do know that the tax code is riddled with special exceptions for this and that for all sorts of companies.

There's a funny line in this article on the subject:
http://money.cnn.com/2011/05/04/news/companies/exxon_oil_taxes/index.htm" onclick="window.open(this.href);return false;
Congress is pushing to eliminate $4 billion a year in tax breaks enjoyed by the oil industry
I doubt oil companies "enjoy" anything; that choice of wording suggests they need to be punished. But there won't be any punishment of oil companies, they don't care, just take that $4B and tack it onto the pump price of the 140B gallons of gas, and you get a 2.8 cent a gallon increase. Have you really solved anything? Seems like all you did was raise taxes on Americans by $4B.

As for royalties not being paid, I suppose that comes from the belief that all things are first property of the state. The net effect will likely be less production in the Gulf, and the U.S. being that much more of a net importer.

So it always is with tax policy evaluated in a vacuum, on the assumption you can change one variable in the equation without creating other effects, sometime unintended.
 
LTLFTcomposite said:
PaulScott said:
...
It found that the U.S. military spends $80 billion per year on costs directly attributed to protecting our access to oil. That's 55 cents a gallon, BTW.
...

All of this is exclusive of the war in Iraq, a war that had mostly to do with oil. We're over $1.5 trillion dollars and tens of thousands of dead and wounded soldiers. I will not let anyone deny that oil played a significant part in why we prosecuted that war.

To deny this assertion is to deny those soldiers their due. It's unpatriotic and anyone who thinks that way is not a good citizen. If you want to argue the points of this, by all means let's hear specifics. But you cannot deny the fact of massive external costs of oil. You HAVE to own that!

I didn't deny it at all, quite the opposite, what I said was that it was hard to calculate. So I stand corrected, apparently the calculation was no problem at all for this think tank: Out of $684B in defense spending, $80B (a suspiciously round number) went to keeping cheap oil flowing.

So with half of oil going to power personal transportation (cars/light trucks), about $40B of that "oil company subsidy" spread across 200M vehicles works out to $200 per vehicle per year.

I would have no problem transferring that $40B to gas taxes if it were removed from taxes elsewhere, as the current structure shifts the costs to general revenues. However it is paid for, you still have to ask though who is the ultimate beneficiary of that $40B expenditure? The big bad oil companies or the consumer? And is it a good investment? And how can you ever calculate the ROI when human lives are involved? Maybe RAND has an answer for that too.

There are many more externalities besides the $80 billion. And no, this is not a "suspiciously round number", it's an approximation because there is no way to give you and exact number, like that would matter to you anyway.

You "suspiciously" ignored the cost of the Iraq war. The $1.5 trillion cost of that war (another rounded number), should calculated in, or at least a significant percentage. As for the cost of a life, that's hard to pin down, but I'd peg it pretty high.

Then there are the costs of the tens of thousands of Americans who die prematurely every year due to the effects of internal combustion pollution. Many of these people are children who, through no fault of their own, happen to live near freeways or downwind of refineries.

Add to that the costs of the massive environmental damage from the extraction, shipping, refining, distributing and burning of that oil and you have a very large number.

And yes, these costs should all be paid by the end user, the consumer. No one should be able to cause harm to others without paying the cost of it. The "big bad oil companies" will continue doing what they are doing, but their product's price needs to reflect all of its cost in order for the market to work properly.
 
LTLFTcomposite said:
... But there won't be any punishment of oil companies, they don't care, just take that $4B and tack it onto the pump price of the 140B gallons of gas, and you get a 2.8 cent a gallon increase. Have you really solved anything? Seems like all you did was raise taxes on Americans by $4B...

This does not raise taxes at all, it simply shifts the burden from the country as a whole to those who buy gasoline, where it belongs. :roll:
 
Volt3939 said:
LTLFTcomposite said:
... But there won't be any punishment of oil companies, they don't care, just take that $4B and tack it onto the pump price of the 140B gallons of gas, and you get a 2.8 cent a gallon increase. Have you really solved anything? Seems like all you did was raise taxes on Americans by $4B...

This does not raise taxes at all, it simply shifts the burden from the country as a whole to those who buy gasoline, where it belongs. :roll:

Only in crazy conservative land.. Conservatives always are supposed to press for fairness and responsibility and lower taxes, thus ending welfare for gas guzzlers must be portrayed as an unfair tax increase.
 
my conservative friends:

As for royalties not being paid, I suppose that comes from the belief that all things are first property of the state. The net effect will likely be less production in the Gulf, and the U.S. being that much more of a net importer
.

WTF? In what world does oil extracted from lease sales belong to anyone but the public and the commons?
And this goes for offshore oil, too?

You assume private ownership of dinosaurs that died millions of years ago and whose remains are under public lands?

and by the way, every state in the union has an extraction tax but CA, which almost approved via referendum this decade, but the oil companies weighed in with tens of millions to defeat the referendum.
 
PaulScott said:
There are many more externalities besides the $80 billion. And no, this is not a "suspiciously round number", it's an approximation because there is no way to give you and exact number, like that would matter to you anyway.

You "suspiciously" ignored the cost of the Iraq war. The $1.5 trillion cost of that war (another rounded number), should calculated in, or at least a significant percentage. As for the cost of a life, that's hard to pin down, but I'd peg it pretty high.

Then there are the costs of the tens of thousands of Americans who die prematurely every year due to the effects of internal combustion pollution. Many of these people are children who, through no fault of their own, happen to live near freeways or downwind of refineries.

Add to that the costs of the massive environmental damage from the extraction, shipping, refining, distributing and burning of that oil and you have a very large number.

And yes, these costs should all be paid by the end user, the consumer. No one should be able to cause harm to others without paying the cost of it. The "big bad oil companies" will continue doing what they are doing, but their product's price needs to reflect all of its cost in order for the market to work properly.

The irony of this discussion is I agree with everything you just said. But will adding 2.8 cents to a gallon of gas and sending that money to Washington solve these problems?
 
"The irony of this discussion is I agree with everything you just said. But will adding 2.8 cents to a gallon of gas and sending that money to Washington solve these problems?"

Where'd you get 2.8 cents? The external costs of oil are measured in many dollars. not a couple of cents. The $80 billion in military costs alone equate to 55 cents/gallon.
 
PaulScott said:
"The irony of this discussion is I agree with everything you just said. But will adding 2.8 cents to a gallon of gas and sending that money to Washington solve these problems?"

Where'd you get 2.8 cents? The external costs of oil are measured in many dollars. not a couple of cents. The $80 billion in military costs alone equate to 55 cents/gallon.

Paul.

That was the added cost per gallon of collecting an additional $4B in taxes spread across 140 billion gallons of gasoline a year.

$4B / 140B gallon x 100 = 2.85 cents per gallon

Actually that should have only been half, or 1.4 cents per gallon, since only (about) half of oil goes to gasoline.

Is the data flawed or did I make a math error?

My question was whether that really constitutes "tackling the issues of our time".

Happy Easter BTW. It's nice to discuss issues with smart people.
 
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