subsidies

How come there is never any question as to continue subsidizing oil cos. through good times and bad but as soon as ethanol and bio fuels show a little prophet they want to stop subsidy?

You don't suppose there may be some political connection, do you?

No of course not......Those oil executives are nice honest fellas, they would never bribe politicians.

Not to mention the big 3 talk show hosts. And I say that as a REAL conservative,not a abundant who plays a conservative on the radio.

They must be afraid of the little prophet telling the future.

I imagine there are plenty of idiot politicians and bureaucrats getting their a$$es chewed hard for driving corn and bean prices so high.

Just for the record oil incentives & tax breaks for the oil industry is over 4 times what is given for ethanol.

And a very, very, conservative bunch also. The oil industry has given a lot more to conservatives than liberals.

In an ideal world all subsidies would end. Anytime a product, any product, is subsidized it puts a hardship on someone. We don't live in an ideal world but that shouldn't stop us from trying to improve.

I'm not sure to which oil company "subsidies" you refer, but I'm fairly certain they pale in comparison to the 45 cent per gallon "blenders' credit", or the 54 cent per gallon tariff on imported ethanol.

A tax ''break'' is no where near the same thing as a subsidy, so called tax breaks simply mean the government steals less of an individuals or comapanies money. Yes, all forms of income, production and consumption based taxes are theft. Ethanol is not a viable fuel source in todays market, the only way to make it viable is to subsidize it or create an artificial shortage of conventional fuels, the current administration is doing both and driving up costs for hundreds of other products and killing jobs and heavy industry. The USA is absolutely capable of becoming energy independent within our own borders but the political will to do it is non-existent.

LAA

Would you please explain this statement, I do not think you are correct.

"The USA is absolutely capable of becoming energy independent"

Dave

Tax breaks aren't subsidies.Subsidies are welfare, tax breaks are letting people or companies keep their duly hard earned money.By your thinking any tax rate less 100% is a tax break by the Gov't 'letting' someone keep their own $$$

Davemk,

There several reasons why I believe the USA is capable of once again becoming energy independent. First, Oil shales in the Rocky Mountain West hold recoverable reserves that are 3-5 times larger than Saudi Arabias, these are US department of energy estimates. The technology is now at a point where this oil can be produced for around $30.00 per barrel. The federal government controls roughly 80% of the rights to this resource, some because its under federal land but the majority falls under the Pickett act. If and when serious drilling and production efforts take off in these areas then the R&D money will really start to flow and the technology will get better and the cost of production will drop further. I have been in this business all of my adult life and I have seen technological advances turn old fields around many times, onshore and offshore. Second, deep water drilling, it is safe, it is viable from $40.00 per barrel, the production facilities and infrastructure are under utilized at the present time and the total reserves are basically incalculable. Third, shale gas, the advances in drilling and producing techniques have already changed the whole natural gas business model in the USA, just 5 years ago LNG receiving stations were being built offshore Louisiana and Texas to receive supplies from West Africa and the Middle East, those terminals are now dead, not needed, and natural gas has gone down in price while production has gone up. The shale gas resource is spread all over the USA and is conservatively estimated to be a 150 year supply even if we quadruple consumption in the next 20 years. Fourth, coal, between natural gas and coal we can produce cheap electricity to power industry and homes while saving on actual crude oil consumption. There would have to be a complete turn around in national energy policy and thinking for this to take place, it may eventually happen because people are going to want to return to a stable economy at some point and that is impossible with out a stable supply of affordable energy. The current administration beleives that if the country is ever going to be able to pay off its debt then we must devalue the dollar and force inflation, when the dollar declines commodities increase in price, every time. Due to the above policies the US government has no incentive to open up drilling and adopt tax and envioronmental structures to encourage increased domestic production of oil and gas, even though the taxable revenues from the product produced, the jobs created and the trade inbalances corrected would pay off the debt much quicker. There is a bunch of information from credible sources on the internet about these recoverable shales including the DOE's own web site which has information on the Green River formation, Bakken Shale, several Colorado shales etc.

Imagine that, the oil industry contributing more to the party that may actually try to legislate a little in their favor. I wonder why the big Unions contribute to the socialist side of the aisle.

The price to extract oil from shale is more than the oil is worth. Attended a seminar on this about 14 years ago. Oil would have to sell for well over $100 per berrel to break even, if the fuel consumed to extract the oil continues to be in the cuurent price range.

The key to that statement is attended a seminar 14 years ago. The technology has evolved and will continue to do so if there is a clear message from the federal government that these areas are to be opened for production. Read about Shell ICP technology. Currently viable with $30.00 p/BBl oil.

I have to chuckle whenever I hear about the subsidies that oil and gas companies receive and guffaw when I hear about their "obscene" profits.

First off, they are mining companies. The locate deposits of oil and gas and then deplete them. Just in the same way that other mining companies are, be they iron, gold, potash, phosphate, gravel, or any other number of minerals.

Next time that you hear reports of obscene profits, even in the best of times, most publicly traded oil and gas companies have a net profit in the range of 10% to 12%, with occasionally 15%.

Compare this with the net profit of 20% to 25% reported by companies such as Microsoft, Cisco, AT&T, among others.

Even the big "evil" ExxonMobil produces only about 20% of the oil that they process and sell. The rest of it is bought on the open market from national oil companies.

As far as energy independence is concerned, we can cut energy consumption more quickly and with less capital than we can by producing more energy.

Any way this is my $0.02. Your opinion is probably different and just as about as wrong as mine. )

pkurilecz