The price of gas.

[dorminWS]

Kreutz, on the “Truth, Lies & Afghanistan” thread, made an observation to the effect that we left Iraq and didn’t even get a barrel of oil; and that gas has already gone up”. Rather than drag that nastly little slugfest off-course, I though I'd comment on that in a new thread.

I recently listened to Lou Dobbs explain why this has little to do with Middle Eastern foreign policy and everything to do with global economics. We have had an extraordinarily mild winter. There is an excess supply of oil – DOMESTICALLY. The US is importing as much or more oil as ever, refining it, and exporting it to countries like China, Japan and India. And gas has gone up 92% since Obama went into office. His/his administration’s fault? Yes and no. We have not been allowed to do enough offshore drilling and we have not built the proposed pipeline. There can be no doubt that a greater supply would mitigate the impact of offshore demand at least to some degree. On the other hand, There is no escaping that we operate in a global economy; and these large refined petroleum product exports are good for our balance of trade.

The thing that mystifies me is why Obama is railing about charging the oil companies “windfall profits taxes” instead of imposing an export tax on refined petroleum products exported out of the country. Let the foreign powers who are bidding up the price of resources and pirating US jobs make a contribution instead of persecuting US companies that are cornerstones of our economy.

[wylde007]

The thing that mystifies me is why Obama is railing about charging the oil companies “windfall profits taxes” instead of imposing an export tax on refined petroleum products exported out of the country. Let the foreign powers who are bidding up the price of resources and pirating US jobs make a contribution instead of persecuting US companies that are cornerstones of our economy.

Let's see, what other major event was catalyzed by massive tariffs and economic protectionism?

[CalebDor]

I seem to recall a certain world war that had similar circumstance...

[OakRidgeStars]

No doubt gas prices will be over $4/gallon come election day. Will that be a factor when it comes to who you will vote for?.

I guess you could blame Bush for the high gas prices but he's not running for reelection.

[dorminWS]

The thing that mystifies me is why Obama is railing about charging the oil companies “windfall profits taxes” instead of imposing an export tax on refined petroleum products exported out of the country. Let the foreign powers who are bidding up the price of resources and pirating US jobs make a contribution instead of persecuting US companies that are cornerstones of our economy.

Let's see, what other major event was catalyzed by massive tariffs and economic protectionism?

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

DAMMIT! that's about the 10th time (and twice in a row on this post) I've lost a post because someone else posted simultanoesly. Oh, well - I'll type it again. Is that a server problem, or am I just unlucky?

Protectionism is when you impose IMPORT tarrifs to protect higher-cost domestic producers. I'm talking about EXPORT tarrifs, which are a somewhat different animal. The export tarrifs I proposed would be more in the nature of a demand-driven premuim in price in a market driven economy, except that the government is siphoning off part of the increase in margin. That, I concur, is a disagreeable notion to free-market supporters, but is by far a lesser eveil than what Obama wants to do; which is to tax the oil companies to fund his schemes to promote "fairness". Of course, any increases in taxres on the oil companies will be passed on the the American consumer in the form of highr gas & oil prices; and will be factored into the cost of everything that incorporates any petroleum product and everything that is transported by truck, train or boat from anywhere to anywhere. Difference is who pays in the end - us or the Chinese, Japanese, indians, etc. Of course those export tarrifs will tend to raise costs in the economies that are buying the exported oil; which are the same countries that are bleeding the US economy of wealth and jobs right now because their costs are so low (primarily due to their low cost of living). The same thing will happen over time, of course, as things slowly creep toward equilibrium in the global economy; but it will take decades.

As for starting a war, I think the likelihood of that clearly is vanishingly small. It is true that an American embargo on certain raw materials contributed to the Japanese attack on the US in WWII, but we aren't talking about an embargo; we're talking about higher costs. We're talking about doind pretty much the same stuff to the Chinese they have been doing to us for a decade or two. So don't be silly.

[ratherfish]

WAIT! Wasn't the liberal matra that we were starting a war for oil?

What ever happened with that?

If Obama made a statement that the US was doing "all of the above" To exploit our resources with resolve. Oil futures would drop by half overnight.

Bush did it!

[Kreutz]

This is all well and good, but leaving the OPEC cartel out of the oil price equation leaves alot out. Its the giant elephant in the room no one has mentioned.

That and the increasingly petroleum hungry India and China with what, half the worlds population in them?

Domestically increased drilling and pipelines would not lower prices for many years since it takes ages to get these things built and running. And from what I heard that tar sand oil coming down the keystone pipeline was going to be exported out of the Gulf of Mexico.

Plus the companies that build the rigs and pipelines will have to recoup their significant investments which means....higher prices.

Oil is a finite resource, often in very unstable lands, and everyone needs..not wants, but needs it. Its only going to get worse over time. Expect these fluctuations with periodic spikes to get more frequent.

I just hate it how it trickles into higher commodities prices since I don't drive much.

[Kreutz]

The thing that mystifies me is why Obama is railing about charging the oil companies “windfall profits taxes” instead of imposing an export tax on refined petroleum products exported out of the country. Let the foreign powers who are bidding up the price of resources and pirating US jobs make a contribution instead of persecuting US companies that are cornerstones of our economy.

Wasn't it eliminating their subsidies they were up in arms about? Profits honestly earned are all well and good.

Can't say punitive taxation ever serves a point, but I can't see how free market capitalists can defend a subsidy, i.e. corporate welfare.

The only real argument in favor of petroleum subsidies I can think of is like roads and corn; everyone indirectly uses/benefits from the industry.

These protections and subsidies date back to the turn of the 20th century when the petroleum industry was in its infancy, are they still relevant today given the clout and wealth they have had for decades?

But do you find yourself supporting or opposing continuing these subsidies Dormin?

[dorminWS]

The thing that mystifies me is why Obama is railing about charging the oil companies “windfall profits taxes” instead of imposing an export tax on refined petroleum products exported out of the country. Let the foreign powers who are bidding up the price of resources and pirating US jobs make a contribution instead of persecuting US companies that are cornerstones of our economy.

Wasn't it eliminating their subsidies they were up in arms about? Profits honestly earned are all well and good.

Can't say punitive taxation ever serves a point, but I can't see how free market capitalists can defend a subsidy, i.e. corporate welfare.

The only real argument in favor of petroleum subsidies I can think of is like roads and corn; everyone indirectly uses/benefits from the industry.

These protections and subsidies date back to the turn of the 20th century when the petroleum industry was in its infancy, are they still relevant today given the clout and wealth they have had for decades?

But do you find yourself supporting or opposing continuing these subsidies Dormin?

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Kreutz,

No offense, but it seems to me you tend to use perjorative terms that might mean anything, which sometimes leads to two people arguing passionately about an issue to which they apply completely different definitions. It's damned confusing; and it usually generates more heat than light.

(1) So before I venture an answer, I must trouble you for a concise definition of "subsidy" as you employ the term.
(2) Similarly, exactly what distinguished "corporate welfare" from other government policies and practices?
(3) Roads is a good example of a proper governmental function, but how is it a "subsidy"?
(4) By what stretch of the imagination do you imagine "corn" is a more deserving recipient of "subsidies" than "oil"?

[ratherfish]

Large oil corporations lost their "subsidies" in the late 70's. Small outfits can still write off a dry hole. This is usually the subsidy most libs belly ache about. Funny though the vast amount of exploratorary work is being done by small companies.

The talent and machinery left the Gulf for Brasil after the Deep water Horizon spill and Obama's extended moratorium on drilling. It will likely never return. Obama then duitifully dumped millions on Brasil of our money! They have a required staffing for all wells in their waters so our guys will train their people to operate the machinery and leave.

Great plan Obummer! Send our talent, machinery, and jobs to Brazil and load a crap pot full of money on them to boot!

The man's a walking economic wrecking ball.

The administration wants us paying European prices for gas. Period. It's really the only way to force his green cronie projects into prodiction. Of course they LOVE the increased revenues too. You see they need back door taxation to tap the lower and middle classes. The 1% doesn't contain nearly enough wealth to fund Obama's socialist agenda even if you take it all.

Obama is betting we're as stupid, and asleep.

[Kreutz]

(1) So before I venture an answer, I must trouble you for a concise definition of "subsidy" as you employ the term.

I don't think I have a special definition. A subsidy is the use of public money in the form of grants, tax credits, deductions, or low or no interest loans paid from the government to a private entity. Some are to specific sectors (oil, corn, soy), others can be in the form of say, SBA grants or new hiring tax credits.

I think that would generally cover it for myself and most people.

(2) Similarly, exactly what distinguished "corporate welfare" from other government policies and practices?

Not much really, in any case the treasury is opened for a specific industry/business/social group. We all pay and only a particular segment of society receives. It is welfare.

(3) Roads is a good example of a proper governmental function, but how is it a "subsidy"?

We all subsidize roads (unless you're a Luddite in the woods) most directly via a gas tax, but the costs of roads (and fuel) sneaks in other ways, chiefly higher consumer prices.

If you buy product A, which almost certainly involved transport at some point, the cost of that transportation (roads and petroleum) is passed on to the consumer.

If our government (i.e. taxpayers) subsidizes roads and petroleum, that added on cost should be less since its spread out more thanks to public largesse.

Also don't forget transportation grants from the FedGov to states to build/maintain roads, that's a direct transportation subsidy which will benefit the private contractors hired to do the job.

Should a taxpayer in Alabama have his tax dollars be redistributed to build a highway in Oregon via a highway earmark?

(4) By what stretch of the imagination do you imagine "corn" is a more deserving recipient of "subsidies" than "oil"?

If you eat anything from a supermarket, theres a damned good chance corn/corn derivatives was involved in its creation. Again we can subsidize corn to keep prices artificially low for everyone. This is also why third world farmers hate our corn exports; they cannot compete.

Don't think any of that is vague or esoteric.

[ratherfish]

Earmarks are at present one of the only ways to remove the power of our current socialist administration from using unelected buearocrats to misdirect intended targeted funding by regulatory fiat.

Some are good, some are bad. Over generalizing is a fun liberal game though and a fine platform plank for progressive RINO's.

Ethinol is a good example of a real "Bush did it". It lowers MPG and costs dearly in BTU's of another energy source to produce. It's effect on many types of machinery is disasterous. All in all a fairly good example of government involvement making something less efficient and more costly.

[OleMan]

With no intent to start a lengthy debate, and with respect for all fellow forum members here - there should not have to be any debate about oil or any other form of domestic energy. We have plenty of energy here and could EXPORT energy.

Why can't we? The short answer - THE GOVERNMENT.

We have around a 300 year supply of coal. We have reserves of shale oil that exceed the known reserves of Saudi Arabia and the new "in-situ" recovery methods recover more oil from the shale and have much less environmental impact. We can make all the electricity we want with clean coal plants which are already a fact, nuclear power which is already a fact, and burning waste material such as wood which is already a fact. We have large newly discovered reserves of natural gas in the eastern US.

What little third world country produces 30% of it's motor fuels from coal? South Africa.

Our liberal neighbor to the north has very large oil reserves in their "tar sands". They hoped to sell it to us but that seems to be killed off by our GOVERNMENT. Who owns and refuses to release most of the US shale oil? The US GOVERNMENT. Who is stopping offshore oil and natural gas exploration everywhere except the Gulf of Mexico? The US GOVERNMENT.

Who is working and investing to develop shale oil in the US in the most environmentally sound manner? Decidely not our GOVERNMENT. It is companies like Shell, Exxon and Chevron!

It has been decades since a new oil refinery has been built in the US 'cuz the GOVERNMENT don't like 'em.

Everything we do in our economy is dependent on ENERGY. Growing commodoties, producing commodities, transporting, manufacturing, and consuming all require energy. It even takes energy to sleep comfortably tonight and post to this forum. Took energy to grow, process, package, ship and for my wife to drive to and from the grocery store to buy the steak, potatoes and veggies we had for dinner.

Get the GOVERNMENT totally out of the energy business, which it has increasingly controlled for over 100 years, and put the scientists, engineers and investors in charge; and we'll have the biggest economic boom in our history.

For sources, one needs to research. There are tons of reliable information on the web. Search using terms like US reserves, oil, coal, shale oil, tar sands, natural gas, DOE, EIA, Rand. You will find that if we develop our shale oil, we will have oil reserves greater than Saudi Arabia.

Oleman

[Kreutz]

With no intent to start a lengthy debate, and with respect for all fellow forum members here - there should not have to be any debate about oil or any other form of domestic energy. We have plenty of energy here and could EXPORT energy.

Why can't we? The short answer - THE GOVERNMENT.

We have around a 300 year supply of coal. We have reserves of shale oil that exceed the known reserves of Saudi Arabia and the new "in-situ" recovery methods recover more oil from the shale and have much less environmental impact. We can make all the electricity we want with clean coal plants which are already a fact, nuclear power which is already a fact, and burning waste material such as wood which is already a fact. We have large newly discovered reserves of natural gas in the eastern US.

What little third world country produces 30% of it's motor fuels from coal? South Africa.

Our liberal neighbor to the north has very large oil reserves in their "tar sands". They hoped to sell it to us but that seems to be killed off by our GOVERNMENT. Who owns and refuses to release most of the US shale oil? The US GOVERNMENT. Who is stopping offshore oil and natural gas exploration everywhere except the Gulf of Mexico? The US GOVERNMENT.

Who is working and investing to develop shale oil in the US in the most environmentally sound manner? Decidely not our GOVERNMENT. It is companies like Shell, Exxon and Chevron!

It has been decades since a new oil refinery has been built in the US 'cuz the GOVERNMENT don't like 'em.

Everything we do in our economy is dependent on ENERGY. Growing commodoties, producing commodities, transporting, manufacturing, and consuming all require energy. It even takes energy to sleep comfortably tonight and post to this forum. Took energy to grow, process, package, ship and for my wife to drive to and from the grocery store to buy the steak, potatoes and veggies we had for dinner.

Get the GOVERNMENT totally out of the energy business, which it has increasingly controlled for over 100 years, and put the scientists, engineers and investors in charge; and we'll have the biggest economic boom in our history.

For sources, one needs to research. There are tons of reliable information on the web. Search using terms like US reserves, oil, coal, shale oil, tar sands, natural gas, DOE, EIA, Rand. You will find that if we develop our shale oil, we will have oil reserves greater than Saudi Arabia.

Oleman

Do those scientists, engineers, and investors care that this happens when fracking does?



The fact these drilling companies will not release the chemicals they use to hydrofrack (they say its proprietary) tells me they're not the saints you make them out to be.

If corners can be cut for greater profits they will be, as they have been.

Yes we need energy, but total deregulation in the name of short term profits is not the way to go.

We also need potable water thats not flammable and loaded with carcinogenic neurotoxins.

You may want to look up the horrific health problems (cancers) and birth defects the Athabascan Indians near those Albertan tar sand sites have. "The most environmentally sound manner" is still not a very good alternative.

I get what you're saying, and oddly enough agree with the premise; we really do have alot of energy here and we should be tapping it. But going back to the days of uncapped oil geysers circa 1910 or just plowing mountaintops and into river basins isn't the way to do it.

Like it or not government is needed to intermediate between the legitimate needs for energy and the equally legitimate need to ensure getting it doesn't poison the air and water we all need too.

[dorminWS]

(1) So before I venture an answer, I must trouble you for a concise definition of "subsidy" as you employ the term.

I don't think I have a special definition. A subsidy is the use of public money in the form of grants, tax credits, deductions, or low or no interest loans paid from the government to a private entity. Some are to specific sectors (oil, corn, soy), others can be in the form of say, SBA grants or new hiring tax credits.

I think that would generally cover it for myself and most people.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I’ll grant that grants or low or no interest loans paid from the government might be “subsidies”. They might also be more accurately characterized as incentives offered by the government to get private entities to do things the profit motive alone won’t motivate. I didn’t think the SBA made grants – only loans; but I don’t know for sure; having had little to do with SBA.
But as to tax credits and deductions including new hiring tax credits, those are definitely NOT “subsidies”. Why not? Because that isn’t the government’s money to begin with; it belongs to the entities that have been “allowed” to keep it.
That’s one place I think your thinking is nebulous and inspecific, Kreutz. (I don’t think I used the term “esoteric”, although I guess sometimes you manage that, too) You seem to embrace the assumption that everything belongs to the federal government unless it decides to magnanimously grant us a subsidy by letting us keep our own property. Most of us embrace the notion that what’s ours is ours and we ought to be entitled to keep it.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

(2) Similarly, exactly what distinguished "corporate welfare" from other government policies and practices?

Not much really, in any case the treasury is opened for a specific industry/business/social group. We all pay and only a particular segment of society receives. It is welfare.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Just as I suspected. When you use the words “corporate welfare”, you’re just piling on another pejorative epithet. If the government wants to motivate certain behavior that the profit motive alone won’t motivate, it tinkers with tax policy to let taxpayers keep a little more of their own money. That’s how it tries to “buy” behavior it wants to encourage. Welfare is when you pay someone to sit on their ass and do nothing. You can find plenty of that in our system without mischaracterization.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

(3) Roads is a good example of a proper governmental function, but how is it a "subsidy"?

We all subsidize roads (unless you're a Luddite in the woods) most directly via a gas tax, but the costs of roads (and fuel) sneaks in other ways, chiefly higher consumer prices.

If you buy product A, which almost certainly involved transport at some point, the cost of that transportation (roads and petroleum) is passed on to the consumer.

If our government (i.e. taxpayers) subsidizes roads and petroleum, that added on cost should be less since its spread out more thanks to public largesse.

Also don't forget transportation grants from the FedGov to states to build/maintain roads, that's a direct transportation subsidy which will benefit the private contractors hired to do the job.

Should a taxpayer in Alabama have his tax dollars be redistributed to build a highway in Oregon via a highway earmark?

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
No, ROADS are a thing the government OUGHT to do for the common good because individuals either cannot do it or at least cannot do it well. They are NOT a benevolent “subsidy” by the government. They are a return of tax revenues (OUR money before the government made it “tax revenues”) in the form of a service government is actually suited to render.
And the positive impact roads have on the cost of transporting goods is a benefit (a return on the investment, if you will) to the general public; not an evil subsidy to big bad private transportation companies. But you are right as you can be about one thing: ALL taxes, no matter who pays them in the first instance, get passed on to the consumer. They have to be; because that’s the only way business and individuals can get the money to PAY the damn taxes.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

(4) By what stretch of the imagination do you imagine "corn" is a more deserving recipient of "subsidies" than "oil"?

If you eat anything from a supermarket, theres a damned good chance corn/corn derivatives was involved in its creation. Again we can subsidize corn to keep prices artificially low for everyone. This is also why third world farmers hate our corn exports; they cannot compete.

Don't think any of that is vague or esoteric.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The issue (or at least my question of you) is not whether it is a subsidy, but why you seem to think is more deserving than oil. I don’t think we should be “subsidizing” corn simply to artificially lower its price (a true subsidy, rather than tax policy mislabeled by you as a “subsidy”). But most especially, I don’t think we should subsidize its use for ethanol (another so-called “subsidy” as an incentive to do what is not profitable on its own). The truth is that the world’s corn wet-millers (who produce all that sweetener, ethanol, feedstock, etc. from corn) are easily bigger, more black-hearted thieves than even you consider the oil companies to be. Just a few years back, when Exxon-Mobil was catching all that crap about their “obscene” profits, I went to the web and looked at their consolidated financials. Yes they made multiple BILLIONS of dollars. But they are a big@ss company. Their return on sales was about 10%. That’s about what WalMart operates on, and is a pretty modest return on revenues for a capital-intensive concern. I’m no fan of oil companies, but it does nobody any real benefit for the political demagogues to use them as whipping boys and an excuse to impose taxes which will fan the flames of inflation.

Kruetz, I am not attacking you as a person. But your perspective seems to be that the government "grants" us the right to retain and use our own property. My perspective is that it is OUR damned property and we instituted government as an objectionable but tolerated necesity to do a very limited number of things and it had grown uncontrollably and intruded to an intolerable degree into our lives and rights. Your money and other property, as I see it, ought to be no different than your guns: none of the government's damned business.

[ratherfish]

Any REAL science available on those claims from the last 5 years and not pulled from the daily kos, Huff Po or wiki?

Me thinks you may be in need of a basic geology class and an understanding that natural gas and water wells has been common ...forever. Ususlly due to poorly cased water wells.

Early fracking did cause some issues but we're once again lapsing into huffpo libspeak.

Won't work. A good friend of mine is an expert in the subject matter. It's a technical issue and not an emotional one.

[dorminWS]

Kruetz, I did notice that your "burning water faucet" photo was sourced from "treehugger.com".

And it is not unknown here in the coalfields of SW Virginia for well water to absorb methane gas (which occurs naturally in coal seams) and actually be capable of being ignited as in the picture. Extracting the methane from the coal seams (using fracking in a lot of cases) has actually alleviated the drinking-wate/methane problem and even made the coal mines a little safer.

Try not to swallow all of that liberal/environmental line hook, line and sinker. Those folks certainly seem more willing to exaggerate their case, engage in a high degree of hyperbole, and sometimes even downright lie to make their case than the other side.

[ratherfish]

Fairly good pop science article

http://www.popularmechanics.com/science ... 93#slide-8

Claim No. 7
"DO NOT DRINK THIS WATER"

HANDWRITTEN SIGN IN THE DOCUMENTARY GASLAND, 2010

It's an iconic image, captured in the 2010 Academy Award—nominated documentary GasLand. A Colorado man holds a flame to his kitchen faucet and turns on the water. The pipes rattle and hiss, and suddenly a ball of fire erupts. It appears a damning indictment of the gas drilling nearby. But Colorado officials determined the gas wells weren't to blame; instead, the homeowner's own water well had been drilled into a naturally occurring pocket of methane. Nonetheless, up to 50 layers of natural gas can occur between the surface and deep shale formations, and methane from these shallow deposits has intruded on groundwater near fracking sites. In May, Pennsylvania officials fined Chesapeake Energy $1 million for contaminating the water supplies of 16 families in Bradford County. Because the company had not properly cemented its boreholes, gas migrated up along the outside of the well, between the rock and steel casing, into aquifers. The problem can be corrected by using stronger cement and processing casings to create a better bond, ensuring an impermeable seal.


Read more: Is Fracking Safe? The Top 10 Myths About Natural Gas Drilling - Popular Mechanics

[ratherfish]

A treehugger pic is worth 1,000 glasses of kool aide!

[joeshmo]

treehugger.com lol... I could only wish I turned on my water and methane gas spewed out. You see a problem, I see $$.