You won’t find this idea in President Bush’s energy plan, but 40 of 47 top economists recently surveyed by the Wall Street Journal said the most effective way to boost new energy alternatives is a tax on fossil fuels. Boosting the cost of gasoline and other fossil-fuel products would make alternative energy much more competitive, they said, without picking a winner or intervening in a heavy-handed way through subsidies.
‚”A tax puts pressure on the market, rather than forcing an artificial solution on it,” said David Wyss of Standard & Poor’s Corp.
Posted by Randy Scholfield
Registered?
Commenting on WE Blog now requires you to be a Kansas.com member. Use the links above to register, if you haven't already, or to log in.Contact us
Follow us
Daily Archives
-
Recent Comments
- JimJohnson on Open thread 11/24
- donndublin on Open thread 11/24
- JimJohnson on Open thread 11/24
- ANTI on Open thread 11/24
- Freebird1971 on Open thread 11/24
- Monkeyhawk on Open thread 11/24
- donndublin on Open thread 11/24
- ANTI on Whose ‘unchecked spending’?
- JimJohnson on Open thread 11/24
- kansasdem on It’s the stupidity about the economy
51 Comments
In other words, the market will try to avoid the tax, no great surprise!We know this is true on any tax: If you want more of something, subsidize it, if you want less of something, tax it.This is true when the government taxes labor or investments or cigarettes or profits.This is also true when the government subsidizes ethanol or gives tax breaks for home ownership or encouraged bad behavior with one part of the old Welfare system that Clinton and a Republican Congress finally reformed.Supply side economists have been trying to explain to everyone that taxes always affect behavior.The WSJ article doesn’t seem to promote or push alternatives as much as say, “If we want government to promote experiments in these areas, and encourage new ideas, this is the best way to do it, this way causes the least harm, this is how to do it without the market and political corruption of direct subsidies.”—–However, the public did not like it when gasoline and heating oil prices went up recently, due to market pressures. I have a hard time believing that the public will tolerate deliberate manipulation of price for the sole purpose of controlling behavior.Are we really going to pass a tax on heating oil and propane that will passed along to little old ladies scraping by on Social Security and a widow’s pension?Of course, any carbon tax will have the postive effect of making the public more resentful, as the global warming hysteria is further exposed as being overblown!
http://www.hindustantimes.com/news/181_1925164,0008.htm
http://www.timesonline.co.uk/tol/news/uk/article1363818.ece
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/02/11/warm11.xml
Go ahead – this is a tax that will be passed on to the end consumer.
There are folks right now who can’t afford to heat or cool their homes to levels where they are comfortable.
This is a tax that directly impacts the poorest of the poor, who already have a tough time filling their gas tank just to get to work.
Enviro-wackos – the new Nazi’s.
I don’t mind taxing fossil fuels more, but at the same time, can we stop subsidizing ethanol!
Why stop subsidizing ethanol?We subsidize the hell outa the oil industry, and they post record profits!
GS, if you’re concerned about the poor then why hate liberals?The genius of the conservative movement is that they get the poor to actually participate in their own financial demise.
I can go for that also. End subsidies for Oil and Ethanol. Let them stand on their own.
Actually Tracy! I will have to disagree with you. That practially all poor people in America are leftist liberal in ideology.
You go to any poor person, homeless person, prisoner and weflare reciepients (minus welfare farmers), they will all side with Democrats and leftist-socialist liberalism.
Man, the oil shills were up early and posting in concert about the benefits of fossil fuels.
’cause ya know, every time a smokestack belches, the petro-angels get their wings. (Big eye roll here)
SO… what does oil shilling pay these days? Better than shilling for the gop?
It’s gotta pay better than shilling for bonbon. Do you just love to lose?
The chant of the oil shills. “Fill my pockets, fill my pockets! Who cares about the future? Fill my pockets, fill my pockets!”
“You go to any poor person, homeless person, prisoner and weflare reciepients (minus welfare farmers), they will all side with Democrats and leftist-socialist liberalism.”
I doubt that most of the above will have an educated , informed opinion regarding political persuasion or idealogy. They are more concerned with their next meal, drink, staying warm.
Middle class conservatives willingly participate in their own demise on a daily basis, being deluslional about who the GOP really represents.They are dissapearing into poverty and becoming liberals in the process.
It is all much clearer now. Taxing “fossil fuels” that Americans have to have to survive will pay for the fossil fuel we give to the North Koreans, who want to “nuke” us!! Damn, why didn’t I think of that?
This whole thing raises an interesting quandry for me. I favor nuclear power as part of the way to decrease carbon. However, I am not a big fan of Kim il Idiot having the bomb; nor of certain countries trying to run a complex nuclear power plant. So, how to accomplish?
A possible approach: off-shore defendable stations owned and controlled by some sort of agency (IAEA?) that would then transmit power to the mainland. Can also make H2 for shipment.
GS has it correct, of course. The fuel tax will hurt the poor the most. The problem is not that we don’t pay enough taxes.
“The fuel tax will hurt the poor the most. The problem is not that we don’t pay enough taxes.”I thought the conservative mantra is the poor don’t pay taxes only the rich do. The poor can always ride a bus–just think no fuel costs, up keep or insurance sounds like deal to me.
The poor don’t pay income tax and you know it. They do pay gas taxes and the worst tax of all-tax on food.
The govt. already makes far more off of the sale of a gallon of gas than the oil companies do. It’s supposed to be spent on roads and bridges. Guess what, only about 30 percent of it actually is. Tell those Fascists in govt. to spend the massive tax dollars that they already take from the people and spend it on developing new sources of energy.
The poor don’t pay income tax and you know it——How would I know cuz some kkkreepy kkkonservative talking head said so. Hey don’t like other taxes ride the bus- grow your own, stick it to the man. Thought you cons were innovative, independant always have a solution.
The carbon taxes are a good idea.
SOMETHING has to be done to break the fossil fuel monopoly.
What do you consider poor? The poor that don’t have to pay income taxes have to make, what, less than $8,000 a year? And riding the bus is not a viable option in Wichita. Research the bus schedule and you’ll find that it is a part time schedule that also takes about 2 hours to get you to your destination.
JR – so now it’s about breaking the fossil-fuel monopoly?
What will you dream up next?
Who holds the monopoly for oil drilling?
Who holds it for coal mining?
GSheridan
I am aware that you are a not terribly articulate shill for fossil fuels interests.
Fossil fuels has held a monopoly on supplying energy needs for almost a hundred years.
Here lately? It’s starting to become costly in treasure and blood to allow them to perpetuate that condition.
Carbon taxes hasten the day when alternative energies can REPLACE fossil fuels.
Yeah I know, that scares the hell outta your portfolio.
Too
Bad.
I don’t like the idea of any new tax. But if the government would fairly cut taxes elsewhere so that it comes out revenue neutral, it is possible I could be convinced.
Good question JR what is the war on terra tax for a gallon of gas 120 billion a year divided by yearly amount of imported petro hmmmmm?
JR -
I actually agree with you, but for different reasons. Simple economics; alternatives to fossil fuels will only be seriously developed when they are economically viable; taxing carbon (fossil fuels) raises that cost and makes alternatives more economically competitive.
It’s not about your “oil company conspiracy” paranoia. It’s about simple economics. Unfortunately, simple economics is beyond many people’s understanding. The Market WILL ultimately rule; it’s human nature. The question is how and to what extent gov’t interferes in and becomes a player in that market. Ideally, that should be as little as possible; but when there are pressing national needs (and this is one of them, for lots of reasons), gov’t can and should harness the power of the market to accomplish those goals.
BTW – “shill,” in JR-speak, for those of you new here, means “disagrees with JR.”
Just a thought, JR.
If being “articulate” is an insult, being “not too terribly articulate” must qualify as praise!
I think you just complimented GS.
Careful using that damnable offensive “a” word!
GMC
Why didn’t you just agree with me and leave it at that?
In a sense all you did was expand verbiage on what I said anyway.
Lawyers…
I got a good example of what WE are talking about. Government being proactive in the market I mean.
Back in the 80’s (I think) oil was super cheap.
A tax was proposed. The funds to subsidize those operating low production stripper wells.
People were against the tax. It was not enacted. (Of course) The low production stripper wells could not survive economically without the subsidy.
Once you shut off a stripper well? It can not pump oil…..ever again.
Now those stripper wells are dead derelicts scattered all over the land. The oil beneath them can no longer be pumped.
JR- I’m fairly ignorant on the subject, but what prevents re-opening a stripper well and resuming production?
Feebates are very effective at cutting fossil-fuel use.Charge a fee on less efficient choices (like 12 mpg SUV’s) to fund rebates on more efficient choices.They’re tax-neutral, and work for anything that consumes energy — appliances, new homes, etc.
Feebates eliminate arbitrary regulations (such as CAFE), and encourage manufacturers to constantly improve their products.
“Why didn’t you just agree with me and leave it at that?”
It’s just not near as much fun as poking holes in a pompous windbag.
JR
“Once you shut off a stripper well? It can not pump oil…..ever again.”
BS. Do a little study.
http://en.wikipedia.org/wiki/Stripper_well” once a marginal well is abandoned, the oil that remains behind is often effectively lost forever”
It takes an investment of only about $12 to save each barrel of oil with higher efficiency.
Most stripper wells were/are NOT profitable at $12/barrel. Most U.S. wells are NOT profitable at $12/barrel.
Whether that oil in abandoned wells can be extracted is a matter of economic viability, not technical difficulty.
GMC
You just can’t quit me?
gster
I don’t have a definitive answer.I cut this from an article I found at the Dept. of energy website after doing an MSN search on “stripper well procution loss”
….Significant quantities of oil remain behind when marginal wells are prematurely abandoned. A common misperception is that oil left behind remains readily available for production when oil prices rise again. In most instances, this is not the case, leaving our nation more dependent on foreign oil imports.††When marginal fields are abandoned, the surface infrastructure – the pumps, piping, storage vessels, and other processing equipment – is removed and the lease forfeited. Since much of this equipment was probably installed over many years, replacing it over a short period†is enormously expensive. Oil prices would have to†stay at today’s elevated record levels for many years – before there would be sufficient economic justification to bring many marginal fields back into production.† As a result, once a marginal field abandoned, the oil that remains behind is often lost forever. The costs of re-drilling a plugged well may be as much as or more than drilling a new well.† Estimates are that the marginal wells plugged and abandoned between 1994 and 2003 represented 110 million barrels of crude oil that was still in the ground.”
SEE Heckler?
I don’t wish to take the thread off topic too far.
I THINK there are hydraulics issues too. Maybe Ben will happen along and help me out with that.
The point is the strpper wells and their production were lost because the government did not act. This was the death of “little oil”. If you do not believe me, take a drive west out of Salina. The rigs are still there. They just don’t do anything anymore. †
Boulder has a carbon tax on electricity, except those who purchase wind energy are exempt.
The tax funds energy audits for homes and businesses, advising them how to best save energy — and CUT demand from coal-fired plants.
‘City residents vote to tax selves for carbon useBoulder surcharge on coal aims to reduce emissions tied to global warming’http://www.msnbc.msn.com/id/15651688
JR
“It can not pump oil…..ever again.”
That’s a pretty unambiguous statement you made there JR.
JR
I drive from east of El Dorado 4-6 days a week. There are dozens of wells along 254 that hadn’t pumped oil in 5 years. Over the past year they’ve pulled the old corroded pipe and put down new. And they are pumping again. The same thing is happening around Russell and Hays. If the price of oil is high enough it is economically feasible to re-tool them and fire them up.
One of my neighbors ( he grew up in the house I own) is a pumper. He was able to quit his job at Cessna because many of the wells he seviced years ago have been started up again. It all depends on the price. Big difference between $12 and $50.
PAUL ROSELL,
http://www.realclimate.org/index.php/archives/2007/02/nigel-calder-in-the-times/“Whether cosmic rays are correlated with climate or not, they have been regularly measured by the neutron monitor at Climax Station (Colorado) ftp://ftp.ngdc.noaa.gov/STP/SOLAR_DATA/COSMIC_RAYS/climax.tab since 1953 and show no long term trend.
No trend = no explanation for current changes.”
Semantics Heckler
If the Dept. of energy says “….the oil that remains behind is often lost forever.”
That’s fairly unambiguous don’t you think?
And for the few happy re-startings you cite, there are likely thousands of counter examples. But why dance that dance?
And if the subsidies HAD been enacted? Maybe oil would not have reached $50 a barrel.
Heckler,
“Big difference between $12 and $50.”
So exactly WHY are we paying $50+ a barrel to Iran, etc, when higher efficiency costs only about $12 a barrel?
JR
Whose dancing?
Anyway.
Rather than a “Fossil Fuels Tax” why not tax only Imported oil to fund development of new energy sources?
Heckler
Are those wells east of El Dorado producing ten barrels per day, or less, for any one year period?If more, then they’re not “stripper” wells.
Tax only imported oil?
HOW do you do that?
Anyways Heckler, funding the research for the alternatives is only part of the equation.
I know you are no fossil fuels shill. You post occasionally about alternatives.
Free market advocate that you are, you have to understand a monopolized market is not free.Think of the phone company before anti trust.
Sometimes a little government interference with capitalism is a GOOD thing.
There has to be a LITTLE interference with the market to free it up so the alternatives can get a toe hold. The only way to do that is incentives or dis incentives for the consumer.
JR: I don’t hate you. Actually, I kinda’, sorta’ like you most of the time. But, PLEASE, for all of our sakes, don’t jump up as a an expert on “stripper wells” or Carlin’s idiot depletion taxes, etc. Pal, you haven’t a clue. Let’s just leave it at that! Fair enough?
And before you jump all over me, the “severence tax” was only one of them. We would have ben much, much better off with GEORGE CARLIN, instead of John Carlin!
rm – can you comment on the stripper well questions above? I seem to recall that you have some expertise there,
Didn’t claim to be an expert.
It isn’t complicated.
There was no tax and no subsidy, The wells shut down. That source of oil is lost.
Cop out much, JR?
Who holds the monopolies?
Give us names.
Back up your claim. I’m all ears.
Heckler,
“Rather than a “Fossil Fuels Tax” why not tax only Imported oil to fund development of new energy sources?”
OPEC would love for us to tax only imported oil, if it sped up depletion of our limited reserves, and made us more dependent on their oil.
We need to improve efficiency FIRST, to make alternatives like biofuels viable (lack of farmland).
We could cut oil usage in HALF with currently available technology. Detroit would be more profitable, if they made higher mpg vehicles.
‘Chrysler announces 13,000 job cuts’http://news.yahoo.com/s/ap/20070214/ap_on_bi_ge/chrysler_restructuring;_ylt=AkyJMT6jikN1celnCrPX_EGs0NUE
“Fossil Fuels Tax” also applies to coal and nat gas.
Gsheridan
I already attended to you. Go back and read. If you have trouble with the bigger words just ask!
Go ‘way little girl ya bother me.
Re the 40 economists saying the “most effective way to boost new energy alternatives is a tax on fossil fuels”.
They should consult the energy experts at OilEndgame, who point out that taxes are a weak way.
Main points of page 174 (PDF pg 198) at http://www.oilendgame.com/* U.S. gasoline is only about 1/8th of the total cost of owning and running a car, and further reduced by discounts.
* Even countries with $5/gallon gasoline have not caused production of “State-of-Art” cars.
* There are much better incentives, such as feebates, federal guaranteed loans to U.S. automakers for re-tooling costs, “Platinum” and “Golden” “Carrots”, etc.
But I do agree with carbon taxes like Boulder CO is using, to fund energy audits and reduce electricity demand from coal-fired plants.
JRI must say, I partially agree with you on the issue of stripper wells.However, it is an economic issue, not a technical issue. Yes, we could drill them again, after the well is closed, but it would not be profitable in most cases.Usually, during the first couple of years of production, most or all of the drilling costs, pipeline and storage costs have been paid. With a really good well, “break even” points can be counted in months, not years. Yes, I have bought and sold natural gas royalties and I have sold working interests in oil and gas wells, and I have also prepared tax returns for those who own royalty interests or working interests or limited partnerships in oil wells. I only know what I read in the annual reports for these investments. Oil and gas production is usually much heavier in the beginning. Well- head pressure and production volume always decrease over time.A closed and capped well might have some increase in pressure and volume, at the same site, over time, since oil and gas do move around a little bit, or “migrate”.However, it will usually not be financially feasable to drill again, after a well is closed.Keeping a low production well open when oil was at $12.00 a barrell would have made sense. That well was probably losing money then, but would be making money now.I think we should have subsidized those producers, providing tax breaks to keep the wells open. I think production from those wells should have been declared tax-free until the price of oil rose again.Keeping those wells open would have helped to keep oil prices lower!Unfortunately, that did not happen.Don’t think for a moment that OPEC doesn’t know this. The roller coaster oil prices have helped give OPEC a monopoly, by helping to crush US production.This is where you are wrong JR: OPEC IS the “monopoly” — no American company can claim anything close to an energy monopoly enjoyed by OPEC!—-One other thought:
Have we ever been successful at banning substances or waging war on substances?
The war on drugs is an example. This one bothers me, because I know the damage drugs do in society and because I dont want to go back to the “patent medicine” days, when cocaine and opiates were in lots of different products.However, the Libertarian conservatives and the Left both make strong economic arguements about the governments inability to control demand.I believe the demand for carbon is higher than the demand for drugs.We will, therefore, create a black market for energy, domestically, with any carbon tax.At the same time, what will happen in the third world?If America is even remotely successful in decreasing demand for carbon domestically, the carbon tax will actually lower the price of carbon in the third world by decreasing demand in America.Net result?No net change in carbon consumption and lots of shivering grandmothers here at home!
why do we feel something must be done? And who will save us? Government. Come on, look at history. Another law, another problem.