the oil companies point out oil is about 40.00 a barrell , not 140.00
where it used to be. last time taxes were raised on big oil it made
america more dependent upon opec. the oil industry will air commercials fighting new taxes on oil, bit in your opinion, do you think
he will get the tax increases in and how do you feel it will effect
the oil industry, thank you.
So far every indication is that the Obama administrations stance on the oil industry is a pretty big paradox. He wants us to be less dependent on foreign oil, but he won’t work to open up exploration and production activities in the outer continental shelf. It looks like he wants to impose punitive taxes on oil companies, which in the end will only discourage investment in domestic production. Why drill here when it’s cheaper to drill somewhere else, or you don’t believe you’ll make a decent return on your investment.
To give you an idea of the kinds of decisions and risks oil companies are already faced with, Chevron and it’s partners will have spent somewhere between 4 and 6 billion dollars on developing one of their fields in deepwater gulf of mexico before they extract one drop of oil out of the ground. Obama’s taxes would tax a project like that every step of the way.
Right now other countries like China, Canada, Brazil etc.. are working to secure energy supplies for the future in their outer continental shelfs. Russia is reported to begin drilling in cuba this summer, only 60 miles off the coast of florida. But our politicians are instead going for cheap political gain and grandstanding against oil companies who are currently unpopular.
It is certainly true that we need to invest in renewables, but our own departement of energy’s most aggressive models predict that oil will still make up 80% of our energy mix by the year 2030.
Oil prices are low right now, but within a few years they’ll be back up to 70 to 80 dollars a barrel. By 2018 we could see 100/barrel again. It would be very arrogant of us to demand that other countries produce more oil while we prohibit and discourage domestic production with moratoriums and punitive taxation. This however, is what we’ve been doing so far.
Additional info: if you have any more questions feel free to email me. As you can see I can talk about this all day long.
Additional info2: The oil industry already pay the highest tax rate of ANY industry. I think that already qualifies as fair share. Is it fair to make them pay even more (especially when we know the real reason is that most people don’t like them)?
additional info3: I forgot to mention that the person Obama appointed as his energy secretary looks like a total douche. Steven Chu. So it doesn’t look good.
November 26th, 2009 at 2:24 pm
Not being an oil exec, I don’t have all the statistics to properly address your question.
However, a few points that should be pointed out.
First – regarding tax on oil – that was done at a time when there wasn’t much a profit/loss margin.
Following last years RECORD high revenue, the oil companies are rolling in money and it is only fair they pay a percentage for those profits…just like EVERY American pays.
Second – the tax you refer to isn’t directly tied to our dependence on foreign oil.
Part was due to greater demand here but less domestic production.
Ideally, we should be working to create alternative forms of energy (nuclear, hydro, solar, etc) as well as learn how to conserve and/or reduce our energy consumption.
Lastly, petroleum will always be needed for all sorts of industrial uses…not just fuel for cars.
What is needed is a way to use it without having to depend on foreign suppliers.
The key to doing that is addressed in my second part, above.
And that is where I believe President Obama will impact the oil industry.
I understand that he’ll work with American oil companies to develop new sources as well as expanding alternative energy and encouraging conservation.
References :
November 26th, 2009 at 3:09 pm
So far every indication is that the Obama administrations stance on the oil industry is a pretty big paradox. He wants us to be less dependent on foreign oil, but he won’t work to open up exploration and production activities in the outer continental shelf. It looks like he wants to impose punitive taxes on oil companies, which in the end will only discourage investment in domestic production. Why drill here when it’s cheaper to drill somewhere else, or you don’t believe you’ll make a decent return on your investment.
To give you an idea of the kinds of decisions and risks oil companies are already faced with, Chevron and it’s partners will have spent somewhere between 4 and 6 billion dollars on developing one of their fields in deepwater gulf of mexico before they extract one drop of oil out of the ground. Obama’s taxes would tax a project like that every step of the way.
Right now other countries like China, Canada, Brazil etc.. are working to secure energy supplies for the future in their outer continental shelfs. Russia is reported to begin drilling in cuba this summer, only 60 miles off the coast of florida. But our politicians are instead going for cheap political gain and grandstanding against oil companies who are currently unpopular.
It is certainly true that we need to invest in renewables, but our own departement of energy’s most aggressive models predict that oil will still make up 80% of our energy mix by the year 2030.
Oil prices are low right now, but within a few years they’ll be back up to 70 to 80 dollars a barrel. By 2018 we could see 100/barrel again. It would be very arrogant of us to demand that other countries produce more oil while we prohibit and discourage domestic production with moratoriums and punitive taxation. This however, is what we’ve been doing so far.
Additional info: if you have any more questions feel free to email me. As you can see I can talk about this all day long.
Additional info2: The oil industry already pay the highest tax rate of ANY industry. I think that already qualifies as fair share. Is it fair to make them pay even more (especially when we know the real reason is that most people don’t like them)?
additional info3: I forgot to mention that the person Obama appointed as his energy secretary looks like a total douche. Steven Chu. So it doesn’t look good.
References :