Obama details plan to tax excess oil company profits

Monday 23rd June, 06:21 AM JST

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Sarge at 05:24 PM JST - 23rd June

Here's an interesting, related story:

www.newsvine.com/_news/2007/12/06/1145337-china-plans-subsidies-for-oil-companies

While we go after our "evil" oil companies, China is supporting their oil companies.
RedMeatKoolAid at 08:47 PM JST - 23rd June

It's like a cartoon I saw featuring a donkey as judge in a hearing at which oil company execs are forced to endure the hysterical beast pounding its hooves and screaming, "Well, maybe we'll repeal this Law of Supply and Demand!"
Betzee at 10:08 PM JST - 23rd June

As for me, no bailouts for any oil companies whose profits dip unless their CEO's take a pay cut to $100,000 a year. I'm not a big fan of corporate bail-outs when the CEO's are still making millions of dollars a year.

The other day I was reading an article written by someone who served in the Reagan administration. He made the case that the Fed, which was recently forced to bail out the banking system, had increased the dollar supply which in turn contributed to weakening our currency (making oil more expensive). Now some of the top dogs at Bears and Stearns will face criminal prosecution as did the Enron head honchos. (No doubt the defense will be the same: "It's not my fault!")

Oil companies did less well in the 1980s when the price of gas dropped. But I think their subsidies, in the form of tax breaks, mean it's unlikely they will lose money. The big ones anyway, not those in the Arbusto league which was essentially a tax write off vehicle for wealthy investors.
SezWho2 at 11:39 PM JST - 23rd June

I think it's time to have a peek at Cheney's secret energy plan. Before we make a new plan we should see how well we performed against the old one.

And wouldn't it be strange if things were actually now going according to plan? That would be good to know, one way or another.
usaexpat at 12:01 AM JST - 24th June

The truth of the matter is that there is no fundamental shortage. The prices have been run up by speculators on "fears" of disruptions in supply. The point is that the windfall tax will not benefit the consumer in the slightest, I don't hear any plan for that money to be rebated to citizens. I find the liberal refusal to allow offshore drilling absolutely unacceptable. Yes alternative fuels need to be funded (and I'm not talking about the ethanol scam) but filling a greater % of our fossil fuel needs at home is the first step in extracating ourselves from the hostage position we are in now. Producing more oil in the states coupled with tax incentives for green energy development will pay off in 10 years or so, there is no quick fix. By the way, what other country if they knew they had oil reserves would prevent people from drilling, certainly not the Saudi's, the Chinese or virtually any other nation. The way the right and left and corporate and environmental lobbies have tied America in knots is rediculous, shame on all of them from both sides of the issue.
Madverts at 02:51 AM JST - 24th June

"The point is that the windfall tax will not benefit the consumer in the slightest, I don't hear any plan for that money to be rebated to citizens."

Nail meet head.

I'll put money on the speculators being largel€ Americans though, so the problem is withinn once again.
taikan at 02:59 AM JST - 24th June

usaexpat

what other country if they knew they had oil reserves would prevent people from drilling, certainly not the Saudi's, the Chinese or virtually any other nation

Not only does Saudi Arabia strictly control drilling, it also keeps its actual oil production at least .5 to 1.5 million barrels per day less than its production capacity. The whole purpose of the OPEC cartel is to limit, by agreement between and among its members, the amount of oil that actually is brought out of the ground on a daily basis.

In addition to the high price of oil, the public should be paying attention to the "refining differential," which is the difference in price between the crude oil that enters the refinery and the finished products that come out of the refinery. By blaming the high cost of gasoline on increases in the price of crude oil, the oil companies have been able to raise the amount they charge for refining, with the difference being pure bottom-line profit.
Betzee at 04:09 AM JST - 24th June

By the way, what other country if they knew they had oil reserves would prevent people from drilling, certainly not the Saudi's, the Chinese.

But neither is a democracy which allows citizen and interest group participation in policy-making. Although very different systems, both are riddled with corruption which is a hallmark of unaccountable government. However imperfect our system is and however higher prices at the pump may go, few Americans would want to live under those governments.

SuperLib said on another thread that residents of states which will host offshore drilling will have final approval at the ballot box. I don't believe that's the case since water usage rights are controlled by the federal government not the state level. This is the way almost all countries do it.
DanManjt at 04:29 AM JST - 24th June

"The economy has so far outstripped the Iraq war as the key election issue.."

The thing is, the high oil prices links these two issues like nothing else can.

If gas stays above $4 a gallon, Obama's linking the sagging economy with the unpopular war, and will destroy McCain in the election.
shimajiro at 11:10 AM JST - 24th June

Taka,

I'm all for ending subsidies of all kinds - including those for corn ethanol aand other green energies (which Obama supports). But I'd oppose caps on salaries or profits. I'm afraid unintended consequences will leave us all worse off. We have only to look to Venezeula to see how quickly the unintended consequences of well-intended, socially-minded government economic reforms have run a nation's economy into the ground.
Betzee at 11:45 AM JST - 24th June

After doing a little research I realized I was wrong in assuming the 1981 ban on off-shore drilling was in response to an oil spill off Santa Barbara at that time. In fact that oil spill occurred in 1969, at a station 6 miles off the coast, and galvanized the environmental movement.

Saudi Arabia and China are countries run by dictatorships which don't have to contend with environmental activists and look at the devastation wreaked (most people are familiar with China's pollution, fewer are aware of the Saudi's which is of a lesser magnitude but reflects the same lack of concern for the future.)
TonyUS at 03:04 PM JST - 24th June

Well if China is subsidizing their oil companies, hey are they state owned any way or what??? Besides that... fine what China does I live in the US and I see the oil companies making record profits while people are losing their homes.. Let us praise China if one wishes, but I will stay focused what is and has been going on in this country.

It is strange to see as a business owner and seller of gasoline , the price of gas being 3.00 a gallon when prices of oil was 70.00 a barrel and a year later again gasoline at 3.00 a gallon when price per barrel hit 100.00 a barrel.. This shows what these oil companies have been doing. I have had to watch this go on for 32 years and because of always wondering what 8,000 gallons was going to take to purchase, I have followed it very closely to see when the 30,000.00 a tanker full was going to come to reality.

This is fact about 3.00 a gallon at 70.00 a barrel and 3.00 a gallon at 100.00 a barrel..

These oil companies are ripping us big time!!!!!!!!!! No one is and has been doing anything about it as these oil companies rake in record profits…
TonyUS at 03:20 PM JST - 24th June

Taka313 Thanks for the article. I did read about that in a popular Science magazine a while back it is very interesting, but to get all going and something like that in production on a lrge scale is another story that has to have the push from those with power and not a power that would cripple its existence. Our politicians do more to hamper such changes and advancements rather than to bring them forward.

I do see ethanol as a big hoax as when ethanol was pushed before it had to be subsidized by the government to bring the price down because of the expense to make it. So what about sugar cane compared to corn?? Just watched a special on Brazil showing ethanol from sugar cane with a 80% increase of ethanol over corn....And Brazil being totally energy self reliant...because they addressed the problem I think they said 20 years ago...maybe 10, I am not sure the time span they have been concentrating on the issue. I am thinking 20 years. Corn is a waste as for alternative energy , I believe. But with such as advantage sugar cane has over corn, why are these facts being not recognized here in the US when it comes to ethanol as an alternative source? An 80% advantage is really something that should be considered.
Betzee at 08:46 PM JST - 24th June

SANTA BARBARA — For decades it has been a bipartisan political staple -- the jaunt to the beaches of Santa Barbara to profess opposition to oil drilling at the spot where a massive 1969 spill despoiled sea life and ocean waters, launching the modern environmental movement....

California has much more virulently opposed offshore drilling than have other states. Political analysts, including Republicans, said McCain's stance suggested a trade-off -- winning votes in key Midwest states on the issue at the cost of losing them in California.

"McCain is essentially conceding what would have been an uphill fight in California in order to strengthen his opportunities in states like Michigan and Ohio," said Dan Schnur, a Republican consultant who worked for McCain in 2000. He added: "Whether this plays in Santa Barbara is much less important than how it plays in Columbus, Ohio."

http://www.latimes.com/news/nationworld/nation/la-na-offshore24-2008jun24,0,1144190.story
SuperLib at 10:37 PM JST - 24th June

Betzee I'm not sure about to what extent the states can control what kind of drilling is done off of their coast. I'm sure there are ways that a state to impose a ban, whether it be through specifically banning drilling or specifically banning one aspect of drilling that's needed.

I've also been reading a bit about the current leases the oil companies hold. Apparently a lot of them are offshore and in areas that are harder to develop. The new areas being discussed are closer in or on land. In that case, states would be able to have even more of an impact.