…

I wonder how many of these facts you have really checked your self….

…

Windmills dont power cars.
Solar power doesnt work for cars.

Yes, we depend on oil.
Yes, we will depend on oil for a very long time.

So, lets produce more of it!

The only ways to bring down the price are to increase the supply or reduce the demand.

(Or, perhaps, to cut the sales and excise taxes on the gasoline)

He’s the same poster that once said we would be dependent on oil….forever.

Uh yeah.

The US has not been able to domestically fill its oil needs for almost 40 years now. SO we have to fight the occasional war or topple a government here or there.

Time to get past oil.

“Why not produce more AND conserve?”

econ101 posted March 7, 2008 at 11:27 am

We have more than enough oil to last for several more decades.
It is simply more expensive to produce, or it is “off limits” due to political concerns.”

Thank you for answering your own question.

Why not produce more AND conserve?

Also, many of the tax breaks for oil exploration go to small producers.

In fact, most of the production in Kansas is dominated by small producers.

The tax code is justified, when it comes to oil production.

“Petroleum production is a very, very risky business.”

Higher energy efficiency is guaranteed, and it takes an investment of only about $15 to save each barrel.

So invest $15 to save a barrel… or pay $100 to buy it, and burn it, and add more GHG’s to Earth’s atmosphere?

Really? Then who would finance foreign policy misadventures for George W Bush - just the average working Joe or Jill?

How convenient.

If it is a free market, why do they need to be encouraged?

Tax liability is based on profits.

Business investment is usually amortized over several years, depreciated, but not written off all at once.

In the oil business, this would not be fair.

It would reduce employment and tie up capital costs, artificially, for several years, on a well that might not even produce.

Again, if you liberals think that this stuff is “easy” there are any number of avenues you can use, to “get in on the action” —

However, even with ALL the tax treatment “advantages” available, to oil and energy investors, you will find that average returns are, roughly, the same as they are for any diversified mutual fund, over a 10 year period.

When you try to sell it at the best price, are you a “speculator”?

When you bought your house, did you try to buy it at the best price, for YOU?

Did that make you a “speculator”?

The way to deal with “speculation” is to encourage massive production.
—–
By the way, I went to college with a bunch of guys that went into petroleum geology.

That was back in the 80’s.

None of them could find a job, at graduation. Not in that field, anyway.

Petroleum production is a very, very risky business.

Those of you who think it is “easy” are free to put your own money into it, you know?

By the way, we ALL benefit from the profits of Petroleum companies.

They pay huge amounts of tax revenue, and every pension plan in America, every college trust department, most charitable endowments, OWN OIL STOCKS!

I guess it doesn’t apply to oil companies.

That seems fair, to me, in that many wells are “dry holes” and produce NOTHING.

Then, there are “Depletion Allowances” that, in a good program, amount to roughly 20% to 30% of cash flow.

Again, this is not a “payment” by the government, to to the drilling program or production company.

A business loss is a loss.

I do not deal in these programs, currently, but I have friends and family who are very involved.

$100,000.00 invested might generate an 85% or $85,000.00 “write off” of IDC.

Even after the write off, this deal is upside down.

The government just allowed someone in the 35% Federal tax braket a tax savings of, roughly, $29,750.00.

If this is a “dry hole” the investor just traded $100K for less than $30K.

Obviously, this calls for “diversification” and spreading the risks between many wells, and many investors.

This, however, reduces returns when a well is successful, since that revenue will be used to offset the losses of the non-producing wells.
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The oil companies generate $Billions in tax revenues, for Federal, State and Local purposes.

It is Ethanol that actually gets a “subsidy” —