Energy Bill Blocked by Senate Republicans Because of Taxes on Oil Companies

what else are oil companies going to do?


anyway you argue like the price of oil is a pure function of supply and demand, ignoring the fundmentals support $60 a barrell oil prices right now.

that's where the gov't regulation needs to be imo

 

OMG, this is fabulous analysis. Almost too good to be true. Please enlighten the BBS as to why the 'fundmentals' support $60 oil. The global markets have mispriced oil by 50% on the high side, according to your work? This should be good, particularly coming from the guy who can't even spell the word 'barrel'!!!

Let 'er rip, pgabs!!! Can't wait to hear this!!! If you could walk through the determinants of supply and demand for us, that'd be great!

 

Before I enlighten you, I would like to express that its a particularly dumbass move to question someone's spelling when you can't use proper grammar.

 

If you don't like it maybe you shouldn't post here anymore, i wouldn't miss your posts which tend to be short on analysis and long on kneejerk.

You are not stupid because you disagree with me, you are stupid because you are being intentionally obtuse and refusing to recognize a fairly basic prroposition- and now you are pretending to be upset and take your toys and go home.

This is why I love D&D.

 

Even if we supposed that the general populace were well informed of the dangers of climate change, your idea here just wouldn't make economic sense. "Environmental benefits" are shared by all people, and it's doubtful that any individual would find it in his or her own best interest to sacrifice "lifestyle benefits" to decrease climate change. There has to be a guarantee that everyone will make sacrifices for the common good, and that's generally where the government steps in (that's also why this is really a global economic issue).

Also, I don't think people in general are going to feel great urgency ("nut cuttin time", as you call it) about climate change until it's too late.

Now, I'm not saying that taxes on oil should be increased, since price changes likely won't have much effect on demand for oil. But I also don't think that the "free market", left to its own devices, will necessarily arrive at the best solution.

 

I'll just post a couple of articles that agree

link


"Oil prices are becoming increasingly decoupled from the fundamentals of supply and demand," Dr. Daniel Yergin, chairman of Cambridge Energy Research Associates (CERA), said today in Washington D.C. "With prices over $90 a barrel and strong anticipation of $100, the oil market is showing signs of high fever, stoked by fears of clashes in the Middle East and resulting disruptions of supply. A weakening dollar and anticipation of further weakness add further fuel to the fever," he said.

link


US Energy Secretary Samuel Bodman Monday said he does not believe current
oil prices were supported solely by fundamental market factors.

Bodman, in an interview with CNBC while attending the groundbreaking
ceremony for the expansion of the Motiva refinery in Port Arthur, Texas, was
asked whether he believed the NYMEX light, sweet crude contract price of about
$87.50/barrel was supported by fundamentals.

"I do not," replied Bodman. He cited such non-fundamental political
concerns as the tension surrounding relationships with Iran and Venezuela as
affecting price issues beyond supply and demand factors.

 

thats why i dont post here anymore. you can continue your long winded and shortsightedness without being challenged. Because apparently you can't handle it.

a fair basic proposition is not singling out oil companies for to overly tax. A fair basic solution is to stop wasting money on ethonal, which although sounds good, is a complete joke as a SIGNIFICANT substitute.

Become more fuel effecient..i agree. But if that was the only matter then it could easily be passed. The problem is all the other supplemental crap in there. If you werent so busy reciting your "oil companies and republicans are the devil" memo like a robot and actually tried to have a decent conversation and find out what is and isnt important to someone then perhaps we could get to some kind of understanding. Or at least a respectable disagreement.

But no, you are just like the worthless polititians. Congrats, you are a perfect example of why nothing effective nor effecient happens in politics.

 

Thanks for that pgabs. The only problem is that neither of them argued for a $60 oil price. They did however make two arguments that I've been making today:

1) Higher taxes leads to decreased production levels, which leads to higher oil prices... (the entire point of this thread)
2) Costs are increasing to find and produce oil

"But while Chinese consumption continues to go up, Russia's increase in output is flattening out rapidly owing to swiftly rising costs and very high government taxes on oil production.

"Although publics and governments around the world are focused on prices, one of the most important factors in the world oil industry is the rapid rise in costs owing to shortages of people, equipment and skills," he told the Georgetown University conference.

Citing the IHS/CERA Upstream Capital Cost Index, he said that a new oil project today would be priced at 70 percent more than a project that was launched just three years ago. "The increased costs are leading to delays and postponements of oil and gas projects," he said, "which is affecting the timing of future supply."

So thanks for BOLSTERING my point, pgabs.

 

how so, both guys argue that the fundamentals don't support today's prices. You're right, more demand equals higher prices, no one argues that, the argument is what the price is.

edit

Fadel Gheit, one of Wall Street's top energy analysts

Well, that is also true, but does it change the equation so much that we see oil prices up 60 percent in less than six months? Obviously not. I’ve been in this business for 30 years, and I can tell you, I try to justify $60 oil and I can’t find any plausible reason to think that oil prices should be a dollar above $60, let alone above $90 or $100.

 

You know, pgabs, you can post articles written by other people all day long that support any oil price from $30 to $200/bbl. What I'm interested in is YOUR position on the balance between demand and supply. It was you, after all, that stated that the fundamentals support $60 oil. Walk me through that analysis that you performed to arrive at that level. Thanks.

What we know is that oil is trading in the low $90's today and the forward curve doesn't dip too much over the next several years. That is reality.

 

you didn't defend anything or challenge anything. In defense of the illogical position that governments should continue welfare programs for oil companies left over from an earlier era, you offered an irrelevant, tangential cliche about loopholes and a platitude about overtaxation. It is a shame you don't post here anymore. Oh wait's it's not, because you do post here.

 

My position is that when Oil Prices go from 65 to 90 in less than a year which recently happened, when there is no major event to support that movement, other speculation of an Iran war, or some people getting kidnapped in Nigeria, threre is a fundamental problem with the way oil prices are speculated. When Oil producers are making 10% net profits, oil prices are too high.

I know what reality is, the fundamentals don't support it. so now I would like to know what your reasoning is that these prices are supported by fundamental analysis.

 

lastly, trader, I know what the forward oil curve says. When debating, this is right because this is what it is, is not a position. We are debating why the forward oil curve is what it is, not what is it.

 

I would argue that if you arbitrarily tax successful companies you would do the following.

1. Raise prices for everyone (the cost gets passed to the consumer).
2. Generate layoffs and contribute to unemployment.
3. Lower overall tax income due to all the lossed income due to layoffs of previously employed people (sales tax, property tax, income tax).
4. Crush R&D spending on new, more efficient technologies (both oil producing AND alternate energy technologies)
5. Deliver advantages to non-American companies which would further multiply 1-4.

Also, 10% margins are NOT evil. I would say that everyone should be happy with 10% margins...the company, for making good money, and the public for not getting shafted.

Also, if the oil industry goes into the toilet, do we then reward oil companies by the government writing them checks? If punished in a good business environment, do we reward them in a bad one?

 

I'm not a fan of the taxes in this bill either but this gloom and doom bull**** isn't true either. Oil companies arent going to die because of some taxes put on them. That's the same reactionary nonsense that has helped block increases in fuel efficiency and stricter environmental standards for oil companies. The truth is that companies can adjust and there's very good economics behind the idea of negative externalities and the cost to the overall economy.

 

He showed you the analysis of an industry expert that supported his point. Neither you nor pgabs is as much of an expert as Fadel Gheit, so unless you can find contradictory evidence from a source as or more qualified, his argument holds more water than yours.

That is how debate works and is a big reason that you prefer demagoguery to debate. The evidence rarely supports your position.

 

We did reward them in a bad business environment. In the early 90s, we gave them subsidies to help them make it through a time when we had $20/bbl oil. What many are arguing for is rescinding the subsidies that the oil companies don't need now that oil is around $90/bbl and the oil industry is making record profits.

 

So pgabs, who admittedly knows next-to-nothing about energy, googles an article and wins the argument. That's hilarious moon. Are you aware that virtually every single energy expert believes that the days of $60 oil are well behind us? Goldman Sachs just two days ago said they expect $105 oil to be hit in 2008. 2 years ago, Matt Simmons, perhaps the world's leading expert, called for $100 oil to be hit in the future, and was within $0.75 of being correct. His analysis, which by the way, is a leading work in energy, is totally fundamentally based and primarily driven from the skepticism regarding the Saudi's ability to produce. The IEA expects the world to be 5 million barrels of oil short PER DAY in 2012. Some think worldwide daily oil production peaked 2 years ago (or came close). If that it true, it's a disaster scenario. OPEC controls 66% of worldwide oil reserves. Yes, OPEC. With member nations such as Iran, Iraq, Nigeria, Venezuela, Saudi, Libya and a whole host of other politically unstable countries. Non-OPEC production is expected to drop dramatically in the coming years. How will you like those countries listed above being smack dab in the middle of a geo-political war for resources? Not pretty. Refinery capacity is tight. There exist extreme bottlenecks in the transportation of petroleum products - the Strait of Hormuz and the Strait of Malacca collectively see 40% of daily petroleum product movements go through them. Ever seen where Hormuz is location? Scary.

I could go on ad nauseum, but choose not to. The price of oil WILL skyrocket in the coming years. It will happen. Are you positioned to capitalize on that? You know, this argument that moon is having illustrates a great point. It illustrates the point of why I am rich and he is complaining about how others (Bush) have ruined it for him. It's all about knowledge and having the cojones to act on that knowledge. Moon, you just don't have it, buddy.

 

Another amateurish post from andy. Andy, back in the 90s, did you not believe that it was in our national interest to have energy companies have incentives to find oil?

Your current point is also r****ded. You're mad because companies are making profits. You're jealous, really, and you want to take punitive actions against them for being successful. You sound like a Democrat!

 

nice to see the twins back in action together. Unfortunately I agree with them on this one since they are right.