Democrats' Response to Oil Scarcity: Punish those who find and produce oil

Absolute absurdity coming out of a Democratic Senator from Pennsylvania.... The capital markets reward investment, and that has formed the basis for a tremendous economic base in the United States. Removing the incentives in that market by taxing success totally undermines the profit motive that spurs individuals to action. It destroys the market signals that encourage investment and encourage risk taking. Do you think Exxon, ChevronTexaco, Anadarko, etc take risks to find oil? HECK YES they do. Do you know how much a dry hole costs in deep water? It can get into the 9-digits. Let's remember that the people finding and producing the scarce resources we so desperately need for our economy are not the problems here. They are working to find the solutions. Want to pay a lot more at the pump? Support your local Democratic congressman...

http://www.chron.com/disp/story.mpl/headline/biz/4752160.html

Senator proposes taxing 'excess' oil profits

WASHINGTON — On the same day that Exxon Mobil Corp. reported higher first-quarter profits, a Pennsylvania senator took aim at the oil industry, proposing a tax on "excess" profits to help poor people pay for gasoline.

Sen. Robert Casey, D-Pa., said he would introduce legislation today to put in place a 50 percent tax on major oil companies profits' from crude oil priced at more than $50 per barrel, where it has been trading for most of the past two years.

The bill, similar to others proposed by members of Congress in recent years, also would eliminate oil industry tax breaks and raise the royalties companies pay to the government for offshore drilling leases.

Casey, speaking with seven other new senators at a Capitol Hill news conference, said family budgets have been squeezed by the rising costs of health care and college tuition and fuel.

The House passed legislation scaling back oil industry subsidies in January, part of House Speaker Nancy Pelosi's pledge to push through six high priority issues after Democrats took control of Congress. Previous efforts to pass windfall profits taxes have failed in Congress, and President Bush has opposed the idea.

Under Casey's bill, money from the windfall profits tax would be used for a new program to help the poor pay for transportation costs. Money from ending tax breaks would fund research into alternative fuels.

The American Petroleum Institute, which represents the oil industry, said in an e-mail that the oil and gas industry's earnings are similar — as a portion of overall revenue — to those of other industries.

"New taxes would prove counterproductive in light of the tremendous capital investment the oil and natural gas sector needs to meet future U.S. energy demand," the trade group said.

Casey's call for new taxes came as Exxon Mobil, the world's largest publicly traded oil company, said its net income grew 10 percent in the first quarter, as higher refining, marketing and chemical profit margins overcame lower crude-oil and natural-gas prices.

Exxon Mobil was the third major oil company to report earnings in as many days. BP PLC, Europe's second-largest oil company, on Tuesday reported a 17 percent drop in first-quarter earnings on lower oil prices and declining production. On Wednesday, Houston-based ConocoPhillips said its first-quarter profit rose 7.7 percent, but the result was propped up by assets sales as it also was hurt by lower commodity prices.

 

So we should reduce incentives to find oil? Are you familiar with how supply and demand works?

 

Energy is the #1 issue facing the world today. It is and will continue to dominate the geopolitical landscape. When you look at production decline curves on major oil & gas fields and then overlay projected demand for oil & gas it becomes very clear that our nation's way of life depends on us finding a solution. Penalizing the companies out there trying to do that is absolutely insane.

 

It's no surprise that Sam is reduced to posting cartoons in this thread. He has no substance. No cred.

NEXT

Would anyone with legitimate arguments like to participate?

 

The price of oil is set on the world market. No single private company has the ability to set price, much less gouge, and still compete in the economy. Get a clue.

 

They influence prices, but they certainly don't set them. They represent less than half of worldwide production.