Obama's Oil and Gas Folly

[Mazeppa]

August 23, 2012
Obama's Oil and Gas Folly
By Jeffrey Folks

Obama's campaign speeches always seem to include a line about how he can take credit for increasing domestic oil and gas production. As the official White House website has it, "domestic oil and gas production has increased every year President Obama has been in office."

On Wednesday, however, his administration put into effect yet another new regulation making it harder for America's oil and gas companies to increase production. In fact, that regulation, as the head of the American Petroleum Institute recently wrote, would make American companies unable to compete with foreign competitors. That may be exactly why the president supported it.

The new regulation, Section 1504 of the Dodd-Frank bill, would require American companies to release information detailing expenditures on foreign operations. That proprietary information would immediately be available to foreign and domestic competitors alike, and would be used to undercut whatever advantages American companies have achieved as a result of their own hard work. Section 1504's "extractives transparency rules," as interpreted by Obama's activists at the SEC, force American companies to compete with one hand tied behind their back. Competitors in Moscow and Beijing must be dancing for joy now that the rules have been finalized. Obama has just handed them the keys to the world's oil riches.

The problems with Section 1504 go beyond the "competitive disadvantage" to which it puts American energy companies. When implemented, Section 1504 will also place American companies in conflict with foreign countries which prohibit the very same disclosures that 1504 mandates. As a result, American companies might well be forced to cease operations in nations where they have already invested tens of billions of dollars in order to avoid running afoul of the law.

As one study pointed out, there are also serious security implications involved in implementing Section 1504. American companies working in dangerous environments overseas may be placing their employees at risk if they fully disclose the locations, funding, and status of their operations. The safety of American workers and their local employees overseas should be a paramount concern, but the SEC ruling does not appear to address this concern.

In addition to the risk of violence, Section 1504 exposes American companies to the risk of greater shareholder litigation. Like all complex securities regulation, Section 1504 is a boon for trial lawyers, but not for American workers or consumers, who will end up paying the costs of litigation.

In fact, it appears that the SEC has proceeded in the most intrusive manner possible, though it need not have done so. Dodd-Frank allowed the agency broad leeway to interpret transparency rules in a manner that would not have materially harmed American companies. It appears that, under Obama's direction, the agency has gone out of its way to punish American companies. Yet nothing in Section 1504 applies to foreign state-run competitors that are not listed on U.S. markets.

All of this raises the question, of course, of why Dodd-Frank should have singled out oil and gas (and mining) companies for a transparency ruling that does not apply to other industries. That decision, in and of itself, would seem to be blatantly unfair and discriminatory. It is another manifestation of the left's obsession with creating a carbon-free future that fails to take into account economic impact or even basic feasibility. In the absence of fossil fuels, America's economy would be reduced to the level of Mali and then some.

Far from increasing domestic oil and gas production, Obama has already cut future production from what it would have been. As the American Petroleum Institute states, current policies "prevent us from adequately preparing for the long-term." Energy production has a long lead time -- as long as two decades, if one includes locating promising acreage, leasing, permitting, drilling, and building the infrastructure for getting production to market. This means that the consequences of current policies don't become apparent for at least a decade. When they do, Obama's policies will be seen to have curtailed domestic production and placed America's energy security in jeopardy.

The increased production for which Obama is taking credit can be attributed to leasing and advances in drilling technologies that took place during previous administrations. By contrast, Obama has been consistently hostile to fossil fuel development.

Since Obama likes to boast about his so-called achievements in domestic energy production, here is a brief list of what he has actually done:

-reversed commitments to allow development of offshore Atlantic reserves, and failed to expand drilling on Alaska's North Slope and offshore Alaska

-shut down Gulf of Mexico deep-water drilling entirely for six months and slowed new permitting there indefinitely

-reversed previous commitments to allow drilling for oil shale on federal lands in the Rockies

-vetoed the Keystone XL pipeline, shutting off major supplies of oil from Canada

-slowed hydraulic fracturing on public and private lands by imposing new EPA regulations, and allowed the EPA to issue hasty determinations of fracking pollution that have since been discredited

-proposed $44 billion of new taxes on oil and gas companies at the same time that he squandered $80 billion on unproductive solar and wind companies such as Solyndra

-continued to support a devastating corn ethanol program that is raising food prices worldwide and costing U.S. taxpayers billions in taxes to pay for subsidies and additional billions in higher fuel costs

-driven up the cost of electricity by mandating and subsidizing wind and solar generation instead of promoting use of natural gas (and coal)

-accused "speculators" of driving up oil prices (except when those prices are falling, which is then not attributable to speculation) while it is his own actions that are driving up those prices in anticipation of future declines in U.S. oil and gas production

To this long list of Obama's policy mistakes we can now add Section 1504, the SEC requirement that American oil and gas companies reveal much of their proprietary information with regard to foreign exploration to their foreign competitors.

In other words, Obama's oil and gas policy has been nothing less than an assault on fossil fuels. The administration's plan all along has been "to wean America off dependence on fossil fuels" (a "national mission," as Obama has called it). Yet no practical alternative exists to supply America's energy needs. Meanwhile, foreign rivals -- China, in particular -- are locking up oil and gas reserves around the globe. Recently, CNOOC (China National Offshore Oil Company) has offered to purchase Nexen for $15.1 billion. That purchase that would greatly expand Chinese ownership of oil and gas reserves in the Gulf of Mexico and elsewhere in North America. This deal follows Chinese purchases of reserves throughout North America, Africa, Latin America, and the Middle East. In future decades, China will reap the benefit of its pro-fossil fuels policy while America suffers from the folly of what Obama has done.

Meanwhile, American companies are hobbled with new regulations and taxation that make it harder for them to produce energy. The cumulative effect of Obama's green energy policy has been to gut future domestic energy production, putting America in the hands of foreign producers, many of whom are hostile to the U.S. Decades from now, with domestic production of oil and gas inadequate to meet our needs, we will have Obama to blame.

But as Obama stresses in his campaign appearances, his work is not yet finished. He has not yet totally dismantled America's oil and gas companies. That job he has left for his second term.

[okie52]

This guy sums it up pretty good about Obama.

Obama, all of the above unless it's a fossil fuel or nuke which, of course, means he excludes 90% of our current energy sources.

But he is moving us towards energy independence....

[SoonerBread]

I'd like to see our resident leftists takes on this.

[ictsooner7]

http://farm4.static.flickr.com/3430/3211396764_4bd6fb6bb3.jpg

[cleller]

Luckily, many of the state's governors have met to discuss interstate use of CNG fuel for long haul trucks. Something any White House admin should have done at least 2-3 years ago. Sitting on an abundant resource like is just unexplainable, unless it has to do with a certain voter base.

[marfacowboy]

The party can't last forever, folks. You have an entire society propped up by a non-renewable resource. You can't just grow, grow, grow, and expect there to always be unlimited supplies of cheap fossil fuel. It gets harder and more expensive to recover. It's just like water, and as people in Kansas are finding out, during extended periods of drought, wells and supply sources can go dry.

Yet, for the first time since 1949, the United States exported more gasoline, heating oil and diesel fuel last year than it imported, the Energy Department reported today.

Bloomberg writes that to offset weak U.S. demand, refiners exported 439,000 barrels a day more than were imported the year before. In 2010, daily imports averaged 269,000 barrels, according to the Petroleum Supply Monthly report.

Imports of crude oil and related products fell 11% last year, reaching a level not seen since 1995.

[okie52]

The party can't last forever, folks. You have an entire society propped up by a non-renewable resource. You can't just grow, grow, grow, and expect there to always be unlimited supplies of cheap fossil fuel. It gets harder and more expensive to recover. It's just like water, and as people in Kansas are finding out, during extended periods of drought, wells and supply sources can go dry.

Yet, for the first time since 1949, the United States exported more gasoline, heating oil and diesel fuel last year than it imported, the Energy Department reported today.

Bloomberg writes that to offset weak U.S. demand, refiners exported 439,000 barrels a day more than were imported the year before. In 2010, daily imports averaged 269,000 barrels, according to the Petroleum Supply Monthly report.

Imports of crude oil and related products fell 11% last year, reaching a level not seen since 1995.
You're right, the party can't last forever and we can't afford to keep paying over $300,000,000 for imported oil.

Exporting gasoline has nothing to do with importing crude.

You giving Obama credit for an oil production increase? Just how big a dem diehard are you? The guy closed down 2 ****ing oceans and 2 seas to exploration and tried to pass cap and trade..l

You can hang onto Obama for his social issues but trying to infer Obama has been good for energy just makes you look like a dem lackey with no objectivity.

[yermom]

require American companies to release information detailing expenditures on foreign operations

this targets only oil companies. Obama is out to get you.

[marfacowboy]

You giving Obama credit for an oil production increase? Just how big a dem diehard are you? The guy closed down 2 ****ing oceans and 2 seas to exploration and tried to pass cap and trade..l

You can hang onto Obama for his social issues but trying to infer Obama has been good for energy just makes you look like a dem lackey with no objectivity.

I think I pretty clearly posted that I have major problems with his energy policies, so I'm hardly a lackey with no objectivity. I didn't even vote for Obama, so spare me that ****ing drivel.

He had to shut down those rigs. We damn near ruined an entire coastline and shut down small family owned businesses critical to Louisiana. They weren't safe. They're still not safe.

[SoonerBread]

The party can't last forever, folks. You have an entire society propped up by a non-renewable resource. You can't just grow, grow, grow, and expect there to always be unlimited supplies of cheap fossil fuel. It gets harder and more expensive to recover. It's just like water, and as people in Kansas are finding out, during extended periods of drought, wells and supply sources can go dry.



No one's saying it will last forever. But instead of mandating ghost fuels (cellulosic biofuels), maybe the government should put money in research for viable alternative fuels, instead of subsidizing the corn boys who can't stand on their own.

The EPA's RFS (Renewable Fuels Standard) is the most burdensome, overbearing, cockamamy piece of legislation in the history of bureacracy. It requires producers to blend a certain amount of a not-yet-existent "fuel" into gasoline, else face penalties. Who do you think those penalties get passed on to when refiners can't blend something into gasoline that no one has been able to produce and make available commercially? The RFS is a complete and utter drain on the US economy. Cellulosic biofuel is just one example of EPA legislation run amok. ExxonMobil spends millions on research for alternative, renewable fuels. They also pay millions in penalties under the RFS. Wouldn't you agree that given those two options, ExxonMobil's dollars are better spent in research than in fines?

[marfacowboy]

No one's saying it will last forever. But instead of mandating ghost fuels (cellulosic biofuels), maybe the government should put money in research for viable alternative fuels, instead of subsidizing the corn boys who can't stand on their own.

I don't have a problem with this. In fact, I see no problem whatsoever in using fossil fuels. I'm more concerned with the rate we're using them and protecting ecosystems while maintaining energy independence. At least to the highest degree it can be achieved.
Ethanol is has a net energy sink. It takes more energy to make it than the energy derived, and it requires heavy amounts of fertilizer, which is also derived from fossil fuels. It takes prodigious amounts of water, too. It's a ruse.


The EPA's RFS (Renewable Fuels Standard) is the most burdensome, overbearing, cockamamy piece of legislation in the history of bureacracy. It requires producers to blend a certain amount of a not-yet-existent "fuel" into gasoline, else face penalties. Who do you think those penalties get passed on to when refiners can't blend something into gasoline that no one has been able to produce and make available commercially? The RFS is a complete and utter drain on the US economy. Cellulosic biofuel is just one example of EPA legislation run amok. ExxonMobil spends millions on research for alternative, renewable fuels. They also pay millions in penalties under the RFS. Wouldn't you agree that given those two options, ExxonMobil's dollars are better spent in research than in fines?

I'm not familiar with this, but I'll read up on it. Thanks for the info.

[okie52]

I think I pretty clearly posted that I have major problems with his energy policies, so I'm hardly a lackey with no objectivity. I didn't even vote for Obama, so spare me that ****ing drivel.

He had to shut down those rigs. We damn near ruined an entire coastline and shut down small family owned businesses critical to Louisiana. They weren't safe. They're still not safe.

What a bunch of crap. There has been one major blowout in over 60 years of drilling in the gulf. That's a damn good record for the thousands of wells that have been drilled there. Show me the mother ****ing damage. The coastlines are open, the beaches are clean and the fishing boats are running and BP picked up the tab for its sloppiness.

Then there's the fact that oil and gas represents over 50% of the total gulf economy and supplies a substantial portion of the US energy needs. Obama had to be ordered twice by federal court to reopen the gulf and under no circumstances does it excuse Obama for shutting down the Atlantic and pacific oceans.

Now if you want to point another country that is ignoring its oil and gas reserves as Obama has chosen to do please point them out because it sure isn't Russia, china, Columbia, Mexico, Cuba,brazil, Venezuela, Libya, or any other country with measurable reserves. And the countries without sufficient oil and gas production are constantly scrambling to secure contracts that will meet their oil and gas needs.

Yeah, you said you didn't support obama's energy policies because he is allowing too much drilling which gives you the distinction of being a bigger energy idiot than Obama. Bravo.

[Skysooner]

This is a subject I can speak to with some expertise given my job (mainly statistical assessment and quantification of oil and natural gas reserves in North America for the 2nd largest producer of natural gas in North America). We are far from running out of oil or natural gas. This "new" technology is really 20+ years old with some refinements. The major differences are in the "slickwater" fracking that opens up natural gas reserves. These same reserves are available world-wide. We literally have hundreds of years available in the world. The main thing keeping it from being developed elsewhere at this point is the infrastructure within countries. This will eventually be fixed.

Obama has been a disaster in terms of regulation. This mandate will hurt Exxon-Mobil and Anadarko more than some others. It is a stupid regulation applied against an industry that Obama apparently doesn't like too much.

[okie52]

This is a subject I can speak to with some expertise given my job (mainly statistical assessment and quantification of oil and natural gas reserves in North America for the 2nd largest producer of natural gas in North America). We are far from running out of oil or natural gas. This "new" technology is really 20+ years old with some refinements. The major differences are in the "slickwater" fracking that opens up natural gas reserves. These same reserves are available world-wide. We literally have hundreds of years available in the world. The main thing keeping it from being developed elsewhere at this point is the infrastructure within countries. This will eventually be fixed.

Obama has been a disaster in terms of regulation. This mandate will hurt Exxon-Mobil and Anadarko more than some others. It is a stupid regulation applied against an industry that Obama apparently doesn't like too much.

Bravo sky

I've forgotten which company you work for other than its Canadian.

[Skysooner]

Bravo sky

I've forgotten which company you work for other than its Canadian.

EnCana

[okie52]

EnCana

Where are your plays? I don't think I ever run into you in OK.

[Skysooner]

Where are your plays? I don't think I ever run into you in OK.

We don't have a big presence in Oklahoma. We have a new Mississippian play in NE Oklahoma. There are some other things working there too. We are big in New Mexico, about to be in Kansas, Louisiana, East Texas, western Colorado (biggest operator there), Wyoming, Michigan, Alberta and British Columbia. We have huge swaths of acreage that are either HBP or have long crown leases in Canada. Cash flow is our biggest issue for 2013 while we are transitioning to a heavier liquids presence. I have worked for a number of companies, and I'll stack up our technical expertise with anyone. Most of us just wish we had moved into liquids earlier. Makes next year harder than it should have been.

[marfacowboy]

What a bunch of crap. There has been one major blowout in over 60 years of drilling in the gulf.

One is enough.


That's a damn good record for the thousands of wells that have been drilled there. Show me the mother ****ing damage. The coastlines are open, the beaches are clean and the fishing boats are running and BP picked up the tab for its sloppiness.

I'm sure the people who suffered though it and lost income have a different view. And we know from whistleblowers that there are significant problems with other wells, that some have been ticking time bombs with all sorts of safety violations.
We don't know all of the long term effects, but we have multiple reports (http://blog.al.com/live/2012/07/gulf_oil_spill_had_dramatic_im.html) that suggest there are long term effects. Here's one (http://online.wsj.com/article/SB10001424052702303624004577339943866694420.html), and here's one from National Geographic (http://news.nationalgeographic.com/news/energy/2012/04/pictures/120420-gulf-oil-spill-impact-studies/) with pics.


Then there's the fact that oil and gas represents over 50% of the total gulf economy and supplies a substantial portion of the US energy needs. Obama had to be ordered twice by federal court to reopen the gulf and under no circumstances does it excuse Obama for shutting down the Atlantic and pacific oceans.

And I could use your same argument about closing the wells. They're all operating today and the oil companies are printing money just like always. Show me the damage! lulz....


Yeah, you said you didn't support obama's energy policies because he is allowing too much drilling which gives you the distinction of being a bigger energy idiot than Obama. Bravo.

No, he's wrong and so are you. Neither of you have apparently done enough research on the topic, especially fracking. We're having a big ****ing party up here, living it up like there's no tomorrow as if we think we're drinking from a bottomless ****ing keg. Future generations will pay for our hubris.

[marfacowboy]

This is a subject I can speak to with some expertise given my job (mainly statistical assessment and quantification of oil and natural gas reserves in North America for the 2nd largest producer of natural gas in North America). We are far from running out of oil or natural gas. This "new" technology is really 20+ years old with some refinements. The major differences are in the "slickwater" fracking that opens up natural gas reserves. These same reserves are available world-wide. We literally have hundreds of years available in the world. The main thing keeping it from being developed elsewhere at this point is the infrastructure within countries. This will eventually be fixed.

Obama has been a disaster in terms of regulation. This mandate will hurt Exxon-Mobil and Anadarko more than some others. It is a stupid regulation applied against an industry that Obama apparently doesn't like too much.

I don't think we're running out of gas, but the gas that's easy to get to, recover and turn into a usable product is getting harder to find. That raises costs, and eventually, you'll be looking at $200 PB prices and a real problem.

Hurt Exxon? Cry me a river. They make over $100 million in profit per day.

[Skysooner]

I don't think we're running out of gas, but the gas that's easy to get to, recover and turn into a usable product is getting harder to find. That raises costs, and eventually, you'll be looking at $200 PB prices and a real problem.

Incorrect at this point. We currently have an 18 year supply of NG that can be extracted basically for free due to the oil content. We have well over 100 years of supply right now all extractable for under $9/MMBTU which is a lower price than we have paid in the mid-2000s.

BTW, we have been fracking since 1950. This only became a big issue due to a hatchet job movie called "Gasland". Are there problems with fracking? Sure if you are talking about what you do with the water that is returned. Pennsylvania was having it treated at water plants that weren't equipped to handle this. There should be regulation sure, but the outright bans are asinine given that this is a safe procedure. It is drilling that needs big regulation particularly the smaller companies that don't have the expertise and don't have the capital to do this right.

[rock on sooner]

I don't have the in depth knowledge about the oil and gas business
as many on this board do, so I'll give a response based on a very
interested lay person.

BP oil spill..yes, they cleaned it up and picked up the tab but what
about the crippling losses the Gulf's businesses had?..my understanding
is that BP has been really slow to help those folks. It seems to me to be
prudent to slow down and increase control/oversight on the drilling in
the Gulf. As to the oceans, the environment is the overriding factor,
Geez, folks are complaining about their view with the wind farms, yes,
I know that wind and solar have no effect on fossil fuels but it IS clean
and renewable. I agree about ethanol, doesn't seem to justify the expense.

North slope, ANWR, Arctic..the environmental impact APPEARS to be the
argument, too. You guys talk about the oil companies and the energy but
the overall health of the planet is in question. You mention China and Russia,
talk about rapers of the land (at least by what I read). As to the Gulf, I've
read, can't remember where, that MANY of the capped wells in the Gulf have
leaks (that the Gulf itself if handling) but, c'mon, how long can that continue?

Romney just proclaimed that he has a plan to make North America energy
independent in EIGHT years. Do you really believe Mr. Flip flopper, who panders
to whichever audience he's in front of (political disease)?

If Obama opened the oceans tonight at 5:00 it'd be 20 years before a bit would
hit the ocean bottom. You know, I agree that fossil fuel is vital but I also agree
that measured steps to protect as much as can be protected should be used. Has
Obama been too cautious? Maybe, only history knows for sure.

Obama gets busted for the Keystone pipeline (northern half) that Transcanada
wants to build. I've read that the tar sands oil is incredibly dirty and dangerous
and will probably be exported, anyway. The issue IS the environment, this I know
a little about..the Ogallala Aquifer provides water for at least parts of five states,
Huge impact if a leak, so they rerouted it to less damaging areas. Okay,BUT,
the other line that Transcanada built has had fourteen (14) leaks in the last
two years. I have heard reports about folks in eastern Texas standing in front
of bulldozers to protect 3-4 generation farm/ranch land. Texans, for chrissakes!

By way of background, I grew up on a shallow well oil lease in southern OK, I
worked some on pipelining, well servicing and general roustabout, by no means
an expert, but have some knowledge of bring the well in, no matter what! I'm
pretty sure that attitude is NOT prevalent now but it only takes one or two
knuckleheads to screw it up for everyone. (See BP, Halliburton and who's the
other involved in the lawsuits?]

I don't think Obama has allowed too much, prolly not enough, but my belief is
that he is erring on the side of caution.

There, I said my piece, 'scuse me, my beer is empty....

[rock on sooner]

Wow, I just looked back over the thread, I sure am a slow typist:emmersed:

[Skysooner]

Romney just proclaimed that he has a plan to make North America energy
independent in EIGHT years. Do you really believe Mr. Flip flopper, who panders
to whichever audience he's in front of (political disease)?

If Obama opened the oceans tonight at 5:00 it'd be 20 years before a bit would
hit the ocean bottom. You know, I agree that fossil fuel is vital but I also agree
that measured steps to protect as much as can be protected should be used. Has
Obama been too cautious? Maybe, only history knows for sure.

Obama gets busted for the Keystone pipeline (northern half) that Transcanada
wants to build. I've read that the tar sands oil is incredibly dirty and dangerous
and will probably be exported, anyway. The issue IS the environment, this I know
a little about..the Ogallala Aquifer provides water for at least parts of five states,
Huge impact if a leak, so they rerouted it to less damaging areas. Okay,BUT,
the other line that Transcanada built has had fourteen (14) leaks in the last
two years. I have heard reports about folks in eastern Texas standing in front
of bulldozers to protect 3-4 generation farm/ranch land. Texans, for chrissakes!


Most of the people I work with are environmentalists to a degree. We just don't take it to an extreme.

Romney is dead on correct here. We are adding 600-800,000 bbls/day on top of what we already do. With conservation efforts, continued drilling and conversion of our interstate trucking fleets to natural gas, we could achieve this easily. Most people don't realize the way the technology has changed and the revolution that has occurred in my industry.

The oil that is being produced in Canada right now is primarily acquired by a process called Steam Assisted Gravity Drainage (SAGD). It is no more harmful than typical oil wells. Pipelines I'm not an expert on, but we have so many pipelines in the US that is ridiculous to be only talking about this one. We export refined products right now. There are government regulations about exporting crude oil outside the US but not for refined products. We don't always use all of the refined products in this country. In fact, we have an overabundance of some products right now driving down prices. The tar sands oil will supply jobs in the refineries on the Gulf Coast that have been configured for heavy crude. Those products will then be shipped where they can be used. It wouldn't make much sense to export a product if a market exists for it here.

[pphilfran]

I don't have the in depth knowledge about the oil and gas business
as many on this board do, so I'll give a response based on a very
interested lay person.

BP oil spill..yes, they cleaned it up and picked up the tab but what
about the crippling losses the Gulf's businesses had?..my understanding
is that BP has been really slow to help those folks. It seems to me to be
prudent to slow down and increase control/oversight on the drilling in
the Gulf. As to the oceans, the environment is the overriding factor,
Geez, folks are complaining about their view with the wind farms, yes,
I know that wind and solar have no effect on fossil fuels but it IS clean
and renewable. I agree about ethanol, doesn't seem to justify the expense.

North slope, ANWR, Arctic..the environmental impact APPEARS to be the
argument, too. You guys talk about the oil companies and the energy but
the overall health of the planet is in question. You mention China and Russia,
talk about rapers of the land (at least by what I read). As to the Gulf, I've
read, can't remember where, that MANY of the capped wells in the Gulf have
leaks (that the Gulf itself if handling) but, c'mon, how long can that continue?

Romney just proclaimed that he has a plan to make North America energy
independent in EIGHT years. Do you really believe Mr. Flip flopper, who panders
to whichever audience he's in front of (political disease)?

If Obama opened the oceans tonight at 5:00 it'd be 20 years before a bit would
hit the ocean bottom. You know, I agree that fossil fuel is vital but I also agree
that measured steps to protect as much as can be protected should be used. Has
Obama been too cautious? Maybe, only history knows for sure.

Obama gets busted for the Keystone pipeline (northern half) that Transcanada
wants to build. I've read that the tar sands oil is incredibly dirty and dangerous
and will probably be exported, anyway. The issue IS the environment, this I know
a little about..the Ogallala Aquifer provides water for at least parts of five states,
Huge impact if a leak, so they rerouted it to less damaging areas. Okay,BUT,
the other line that Transcanada built has had fourteen (14) leaks in the last
two years. I have heard reports about folks in eastern Texas standing in front
of bulldozers to protect 3-4 generation farm/ranch land. Texans, for chrissakes!

By way of background, I grew up on a shallow well oil lease in southern OK, I
worked some on pipelining, well servicing and general roustabout, by no means
an expert, but have some knowledge of bring the well in, no matter what! I'm
pretty sure that attitude is NOT prevalent now but it only takes one or two
knuckleheads to screw it up for everyone. (See BP, Halliburton and who's the
other involved in the lawsuits?]

I don't think Obama has allowed too much, prolly not enough, but my belief is
that he is erring on the side of caution.

There, I said my piece, 'scuse me, my beer is empty....

Obama's energy policy is strictly based on CO2 emissions...

[okie52]

One is enough.



I'm sure the people who suffered though it and lost income have a different view. And we know from whistleblowers that there are significant problems with other wells, that some have been ticking time bombs with all sorts of safety violations.
We don't know all of the long term effects, but we have reports that suggest there are long term effects. There are multiple reports (http://online.wsj.com/article/SB10001424052702303624004577339943866694420.html)o n this. Here's one from National Geographic (http://news.nationalgeographic.com/news/energy/2012/04/pictures/120420-gulf-oil-spill-impact-studies/) with pics.



And I could use your same argument about closing the wells. They're all operating today and the oil companies are printing money just like always. Show me the damage! lulz....



No, he's wrong and so are you. Neither of you have apparently done enough research on the topic, especially fracking. We're having a big ****ing party up here, living it up like there's no tomorrow as if we think we're drinking from a bottomless ****ing keg. Future generations will pay for our hubris.


Oh god the fracking nonsense. Maybe you'd better read up on it. show me where the EPA has proved a case of water contamination due to fracking..,it ain't happened. You don't even understand how ridiculous the accusation is in most cases. A frack done 4,000 feet or deeper would have to migrate through thousands of feet of rock and many zones that are impervious to oil and gas migration..hell, often that's the damn trap that has kept oil and gas in place for millions of years.

The only way for water contamination is for a casing leak which has little to do with fracking and usually that's due to a bad cement job. Your fracking concerns are a red herring.

And, in case you didn't know, the ocean is full of naturally occurring oil seeps.

1 well blowout isn't even close to enough or we could have ended oil and gas use 100 years ago. Every energy source has its risks but the thousands of wells producing in the gulf are a testament to the expertise of the US oil and gas industry which is the best in the world.

And, according to you, the whole world is wrong in producing oil and gas. The economics of your position are as damning as your lack of understanding about the energy needs of this country.


So pedal your bike to work or put a sail on your car. It's where you are with energy. Congrats.

[rock on sooner]

Obama's energy policy is strictly based on CO2 emissions...


Fair enough, help me here, is that all bad?

[marfacowboy]

Incorrect at this point. We currently have an 18 year supply of NG that can be extracted basically for free due to the oil content. We have well over 100 years of supply right now all extractable for under $9/MMBTU which is a lower price than we have paid in the mid-2000s.

BTW, we have been fracking since 1950. This only became a big issue due to a hatchet job movie called "Gasland". Are there problems with fracking? Sure if you are talking about what you do with the water that is returned. Pennsylvania was having it treated at water plants that weren't equipped to handle this. There should be regulation sure, but the outright bans are asinine given that this is a safe procedure. It is drilling that needs big regulation particularly the smaller companies that don't have the expertise and don't have the capital to do this right.

I'm talking more about crude. I don't know the natural gas numbers. Every pill, every can of Coke, just about everything we depend on each day is dependent upon affordable access to oil.

[Skysooner]

Fair enough, help me here, is that all bad?

What he is basically saying is that Obama has no energy policy except to take credit for stuff he had no part in.

[Skysooner]

I'm talking more about crude. I don't know the natural gas numbers. Every pill, every can of Coke, just about everything we depend on each day is dependent upon affordable access to oil.

True and while crude oil will never really be "cheap" again, we have roughly 30-40 years of supply here if we just used what we have booked currently. This does not count the trillions of barrels of oil under Utah, Colorado and Wyoming that will have slightly higher extraction costs. With natural gas being cheap, this cost comes down too.

[rock on sooner]

What he is basically saying is that Obama has no energy policy except to take credit for stuff he had no part in.


Sorry, no comprendo...

[marfacowboy]

Oh god the fracking nonsense. Maybe you'd better read up on it. show me where the EPA has proved a case of water contamination due to fracking..,it ain't happened. You don't even understand how ridiculous the accusation is in most cases. A frack done 4,000 feet or deeper would have to migrate through thousands of feet of rock and many zones that are impervious to oil and gas migration..hell, often that's the damn trap that has kept oil and gas in place for millions of years.

The only way for water contamination is for a casing leak which has little to do with fracking and usually that's due to a bad cement job. Your fracking concerns are a red herring.

And, in case you didn't know, the ocean is full of naturally occurring oil seeps.

1 well blowout isn't even close to enough or we could have ended oil and gas use 100 years ago. Every energy source has its risks but the thousands of wells producing in the gulf are a testament to the expertise of the US oil and gas industry which is the best in the world.

And, according to you, the whole world is wrong in producing oil and gas. The economics of your position are as damning as your lack of understanding about the energy needs of this country.


So pedal your bike to work or put a sail on your car. It's where you are with energy. Congrats.

You haven't read or understood anything I've written. I never said the world was wrong in producing oil and gas. Please go back and review my posts and tell me where I said that. In fact, I think I said precisely the opposite.
I'm saying there are too many dadgum people using too much damn fuel. Why is this so difficult to understand?
I think I've also stated that "the horse is out of the barn" and there's probably not much we can do about it. I really don't think anyone is going to change their lifestyle, even if they understood the biological and geophysical issues. But if you got more people riding bikes and walking by reengineering our communities to support more mixed use, it might have some measurable effect. Minimally, YOU'LL SAVE SOME MONEY. WHAT'S WRONG WITH SAVING MONEY? We'll drive construction business for contractors. You'll lose weight. Your community will be quieter and safer.
And the big issue I've raised isn't well contamination. Where did I, even once, bring up well contamination? The problem with fracking, particularly in the arid west, is the high amount of water required. We have major water issues in the west and with overtaxing aquifers from industrial ag alone. Go to Earth Policy Institute and look at the numbers. It's pretty scary.

[Skysooner]

Sorry, no comprendo...

Energy policy should contain several factors. There needs to be a conservation part (mpg standards, better efficiency, switching to NG from coal to a point), a production part and environmental protection.

CO2 emissions is basically an anti-energy policy. Renewables is a laudable goal, but it can't be done overnight. There has to be more R&D, etc.

We also need NG infrastructure so that fillups can be quick and easy. Right now it is just around certain cities and not really geared for anything but commercial vehicles.

Obama has also done nothing to promote the NG and crude oil production revolution we are having right now. By taking down "subsidies" that every other industry gets he is just putting up a boogie man that is easy to point to. How many other industries have their prices posted prominently out there for everyone to see? If we had a government that would give us sensible regulation and support for drilling, we would lower energy costs in this country to the point where jobs shipped overseas would come back.

[pphilfran]

Fair enough, help me here, is that all bad?


If taken to extreme...yes...Obama's statement about bankrupting coal was extreme...his early refusal to get behind ng since it is carbon based and backing ethanol production was extreme...his failure to realize there are many high paying jobs in the energy sector and the need for those jobs in this economy is extreme....his railing on energy credit is extreme...especially when last year and last quarter Apple paid a lower percent of income tax than Exxon Mobile...

Last quarter

Apple http://www.dailyfinance.com/quote/nasdaq/apple/aapl/financial-statements?source=esadlfltnal0001
35 billion in sales
8.8 billion in net profit
3 billion in income taxes

Exxon Mobile http://www.dailyfinance.com/quote/nyse/exxonmobil-corp/xom/financial-statements?source=esadlfltnal0001
124 billion in sales
16 billion in net profit
8.5 billion in taxes

[marfacowboy]

True and while crude oil will never really be "cheap" again, we have roughly 30-40 years of supply here if we just used what we have booked currently. This does not count the trillions of barrels of oil under Utah, Colorado and Wyoming that will have slightly higher extraction costs. With natural gas being cheap, this cost comes down too.

30-40 years is nothing, especially when you consider future generations needing cheap fuel for medicine, transportation and food. In a world with $200 PB oil, all of the sudden medical costs and food production/transportation costs spiral out of control to the point you really are staring economic collapse in the face.
Live simply. Save money. Enjoy less clutter and more peace and quiet.

[pphilfran]

Funny how we never hear about Apple not paying their share and only about the huge advantages we give to the energy sector...

Funny how Apple pays their offshore workers pennies while Exxon pays their workers a premium wage...

[Skysooner]

30-40 years is nothing, especially when you consider future generations needing cheap fuel for medicine, transportation and food. In a world with $200 PB oil, all of the sudden medical costs and food production/transportation costs spiral out of control to the point you really are staring economic collapse in the face.
Live simply. Save money. Enjoy less clutter and more peace and quiet.

Better than what we had which was virtually a dead industry in 10 years. That doesn't take into account world reserves which are huge (way beyond what anybody would think). We at least have enough to make a serious effort at conservation and R&D.

[pphilfran]

30-40 years is nothing, especially when you consider future generations needing cheap fuel for medicine, transportation and food. In a world with $200 PB oil, all of the sudden medical costs and food production/transportation costs spiral out of control to the point you really are staring economic collapse in the face.
Live simply. Save money. Enjoy less clutter and more peace and quiet.


In 30 or 40 years the transportation sector will be far less reliant on gas...you discount the changes that are coming...

[okie52]

First of all I find it ironic that 2 people that are in the extreme minority on population reduction are at odds on issues that surround it.

I'm sure most posters on this board are well aware of my desire to see the US return to a population of 150,000,000 with the main reason being a reduction in our consumption of our natural resources like oil, gas, coal, and water. (and food of course) It also reduces our footprint on the planet and reduces our pollution.

As to the fracking the major concerns that are being publicly expressed are about ground water contamination. For the water usage aspect much of the frac water is recaptured and reused (as I understand it) but I'm sure an engineer like sky or someone else could address that.

Now, if I misunderstood you stating you thought Obama was drilling too much then I apologize. But there isn't another logical way we go about meeting our energy needs without it and as much as I'd like to see us reduce our population their isn't a candidate advocating it.

[Skysooner]

First of all I find it ironic that 2 people that are in the extreme minority on population reduction are at odds on issues that surround it.

I'm sure most posters on this board are well aware of my desire to see the US return to a population of 150,000,000 with the main reason being a reduction in our consumption of our natural resources like oil, gas, coal, and water. (and food of course) It also reduces our footprint on the planet and reduces our pollution.

As to the fracking the major concerns that are being publicly expressed are about ground water contamination. For the water usage aspect much of the frac water is recaptured and reused (as I understand it) but I'm sure an engineer like sky or someone else could address that.

Now, if I misunderstood you stating you thought Obama was drilling too much then I apologize. But there isn't another logical way we go about meeting our energy needs without it and as much as I'd like to see us reduce our population their isn't a candidate advocating it.

The frac water is recaptured and reused as much as possible. We have holding tanks where they are treated for biologic material (i.e. bugs). I'm not sure of our current reusage ratio, but it is usually 5 or 6 wells. I haven't been in operations in 8 years though and only know what I hear or ask about. Good question though. I know just the guy to ask.

[rock on sooner]

Phil, guess my only question about Apple versus Exxon, is how much
does Apple get in tax breaks (or subsidies, whichever term) versus
what Exxon gets? My biggest issue is why do the oil companies
NEED the gov't largess, when they are so profitable? And, R/R want
to let the help that green gets expire...sorry, just does not compute.
What am I missing?

[pphilfran]

Phil, guess my only question about Apple versus Exxon, is how much
does Apple get in tax breaks (or subsidies, whichever term) versus
what Exxon gets? My biggest issue is why do the oil companies
NEED the gov't largess, when they are so profitable? And, R/R want
to let the help that green gets expire...sorry, just does not compute.
What am I missing?

Oil companies get the same tax breaks that any other company legally receives...it appears that they pay their fair share of income taxes...taxes at a much higher rate then Apple...

As far as profitability they made something like 14% on sales in a very risky and complicated business while paying great wages

Apple, on the other hand made 25% on sales in a business with similar risks while paying their offshore employees pennies on the dollar...

The oil and gas industry has been unjustly demonized when it comes to the benefits they provide the nation, the pay they provide their associates, and the taxes they pay...

[rock on sooner]

Energy policy should contain several factors. There needs to be a conservation part (mpg standards, better efficiency, switching to NG from coal to a point), a production part and environmental protection.

CO2 emissions is basically an anti-energy policy. Renewables is a laudable goal, but it can't be done overnight. There has to be more R&D, etc.

We also need NG infrastructure so that fillups can be quick and easy. Right now it is just around certain cities and not really geared for anything but commercial vehicles.

Obama has also done nothing to promote the NG and crude oil production revolution we are having right now. By taking down "subsidies" that every other industry gets he is just putting up a boogie man that is easy to point to. How many other industries have their prices posted prominently out there for everyone to see? If we had a government that would give us sensible regulation and support for drilling, we would lower energy costs in this country to the point where jobs shipped overseas would come back.

Thanks, Sky, posted prices? Have you listened to "price fixing" lately? Ha!
Arguments are laughable. Lowering costs, hmmm, can't see that when I
see just the opposite...up 10 cents a crack and down 1-2 cents at a time..
yeah, I know about refinery problems, seasonal changes, etc...really hard
to buy in to..

Taking down subsidies? Wow, oil and gas lobbyists fight tooth and nail to
keep theirs (good for them), anything green and oil and gas are ALL over
them. If you take away green, it's toast (already wind is laying off people
here in IA and across the country) How freakin' long has oil and gas had
"help"? How much longer do they need "help"? And, the oil and gas
folks squawk about what green gets? Sorry, can't go there..

[marfacowboy]

First of all I find it ironic that 2 people that are in the extreme minority on population reduction are at odds on issues that surround it.

I'm sure most posters on this board are well aware of my desire to see the US return to a population of 150,000,000 with the main reason being a reduction in our consumption of our natural resources like oil, gas, coal, and water. (and food of course) It also reduces our footprint on the planet and reduces our pollution.

As to the fracking the major concerns that are being publicly expressed are about ground water contamination. For the water usage aspect much of the frac water is recaptured and reused (as I understand it) but I'm sure an engineer like sky or someone else could address that.

Now, if I misunderstood you stating you thought Obama was drilling too much then I apologize. But there isn't another logical way we go about meeting our energy needs without it and as much as I'd like to see us reduce our population their isn't a candidate advocating it.

I'm not sure if he's "drilling too much" or not. Look, I don't want my community to look like Odessa, Texas, but I realize we need fuel. It needs to be done safely. I love the outdoors. I'm a hiker, used to hunt a lot (free range, organic food!), and a backpacker. I love wilderness, and admit I'm not a person that's crazy about "civilization," if we can call it that. I was probably born a 150 years too late. I tend to be overly romantic about movies like Jeremiah Johnson, if that gives you a hint into where I'm coming from.
Part of the reason the population is so high is the availability of cheap fossil fuel. It's made industrial agricultural production possible, and if you have a large food supply, you'll have a large population. Reduce the food supply, and the population will decrease.
That time is coming, unfortunately. While I'd like fewer people, I'm not one of these apocalypse people (Derrick Jensen...a real *******) that looks forward to people dying and a lot of human suffering. I'd like to see a gradual, sensible spindown, if that's possible. I'm beginning to have my doubts.
It's all good, okie. I hear you where you're coming from. Hopefully football season will help us get our minds off all of this depressing ****.

[rock on sooner]

Oil companies get the same tax breaks that any other company legally receives...it appears that they pay their fair share of income taxes...taxes at a much higher rate then Apple...

As far as profitability they made something like 14% on sales in a very risky and complicated business while paying great wages

Apple, on the other hand made 25% on sales in a business with similar risks while paying their offshore employees pennies on the dollar...

The oil and gas industry has been unjustly demonized when it comes to the benefits they provide the nation, the pay they provide their associates, and the taxes they pay...

Would you agree that oil and gas is a much more mature industry than
hi tech? I'll ask again, how much longer does oil and gas NEED the "help"?

[pphilfran]

Would you agree that oil and gas is a much more mature industry than
hi tech? I'll ask again, how much longer does oil and gas NEED the "help"?

Mature yes...but they are far different companies than they were 10 years ago...even 5 years ago...drilling techniques have changed dramatically and those changes in technology have allowed the US to expand production to levels unseen in a couple of decades, something we never dreamed of 5 years ago...

What "help" are you suggesting they should not receive? Should Apple receive any "help" with their much higher margins and far lower tax rate?

[yermom]

Oil companies get the same tax breaks that any other company legally receives...it appears that they pay their fair share of income taxes...taxes at a much higher rate then Apple...

As far as profitability they made something like 14% on sales in a very risky and complicated business while paying great wages

Apple, on the other hand made 25% on sales in a business with similar risks while paying their offshore employees pennies on the dollar...

The oil and gas industry has been unjustly demonized when it comes to the benefits they provide the nation, the pay they provide their associates, and the taxes they pay...

how many Apple products do i need to drive to work on Monday?

[pphilfran]

how many Apple products do i need to drive to work on Monday?

Huh?

[okie52]

how many Apple products do i need to drive to work on Monday?

I don't know what a car might contain..of course a bike wouldn't need any.

How many apple products do you need at work?

[Skysooner]

Would you agree that oil and gas is a much more mature industry than
hi tech? I'll ask again, how much longer does oil and gas NEED the "help"?

Here is the issue. Taking those breaks away makes oil and gas prices go up. Every other industry is allowed to write off labor costs in the year they are incurred. This is the basic change they want to take away from us. They demonize the industry, because we are so visible.

[okie52]

Would you agree that oil and gas is a much more mature industry than
hi tech? I'll ask again, how much longer does oil and gas NEED the "help"?

The breaks are a red herring unless you don't think GM should be able to write off its costs.

Speaking of tax breaks how about the $60,000,000,000 tax exemption Obama gave the unions regardless of income on obamacare? You won't get it, I won't get, any other middle class working stiff wont get it unless he's in a union. That's sure a lot more than anything he's talking about from oil and gas. Sound fair to you?

[pphilfran]

Here is the issue. Taking those breaks away makes oil and gas prices go up. Every other industry is allowed to write off labor costs in the year they are incurred. This is the basic change they want to take away from us. They demonize the industry, because we are so visible.

An excellent point...you raise their taxes and who is going to pay? Will all the industry just absorb the higher cost or will they pass on the added cost to the consumer...I think we all know the answer to that question...

[okie52]

An excellent point...you raise their taxes and who is going to pay? Will all the industry just absorb the higher cost or will they pass on the added cost to the consumer...I think we all know the answer to that question...

Just like the windfall profit tax of carter in the 70s...guess who paid for it?

[rock on sooner]

Here is the issue. Taking those breaks away makes oil and gas prices go up. Every other industry is allowed to write off labor costs in the year they are incurred. This is the basic change they want to take away from us. They demonize the industry, because we are so visible.

As I understand it, O/G argues that without the breaks prices would
go up because O/G uses that money for R&D and exploration and pays
their investors with the profits. Is that correct? What about paying
smaller dividends and roll that into the company? Or, would the investors
not buy into efforts to make the company stronger, more solvent and
productive? Just asking...

As to demonizing, if you are on the outside looking in and you see really
big profits and then hear about big taxpayer bucks going to "help" and
still pay $3-4 a gallon at every gas station in sight, the average consumer
really questions what is going on. Yup, the industry is visible...

[yermom]

Huh?

Apple makes a ton of money, but if they suddenly raise their prices, the economy isn't going to grind to a halt because people can't afford iPads

[Skysooner]

As I understand it, O/G argues that without the breaks prices would
go up because O/G uses that money for R&D and exploration and pays
their investors with the profits. Is that correct? What about paying
smaller dividends and roll that into the company? Or, would the investors
not buy into efforts to make the company stronger, more solvent and
productive? Just asking...

As to demonizing, if you are on the outside looking in and you see really
big profits and then hear about big taxpayer bucks going to "help" and
still pay $3-4 a gallon at every gas station in sight, the average consumer
really questions what is going on. Yup, the industry is visible...

Most of the profit of a gallon of gasoline goes to taxes. We don't really R&D that much. Instead all that money goes into land acquisition, drilling and yes dividends. I can say for certainty that if we cut our dividend, our stock price plummets, our debt to equity ratio goes up, the cost of borrowing goes up and we aren't drilling many of our assets anymore. Think of it this way. The benefits of those tax breaks results in cheaper natural gas and crude oil overall which affects whole segments of the economy. Why do you think they always demonize but never enact on that legislation? It is because of the far reaching effects of energy.

[SoonerBread]

As I understand it, O/G argues that without the breaks prices would
go up because O/G uses that money for R&D and exploration and pays
their investors with the profits. Is that correct? What about paying
smaller dividends and roll that into the company? Or, would the investors
not buy into efforts to make the company stronger, more solvent and
productive? Just asking...

As to demonizing, if you are on the outside looking in and you see really
big profits and then hear about big taxpayer bucks going to "help" and
still pay $3-4 a gallon at every gas station in sight, the average consumer
really questions what is going on. Yup, the industry is visible...

Gas prices breakdown. (http://www.fivecentnickel.com/2008/06/13/what-goes-into-the-price-of-gas/)

California gas prices itemized. (http://energyalmanac.ca.gov/gasoline/margins/index.php)

Where your money goes at the pump. (http://fuelfix.com/blog/2012/07/18/where-does-your-money-go-at-the-gas-pump/)

In the last link, you will see that for every $50 spent on gas, $30.75 is the cost of the dead dinosaurs, $7 goes to the refiners ("Big Bad Evil Oil"), $6 goes to taxes (talk about windfall profits, do those receiving the tax revenue have anything to do with production of a gallon of gas?!?!?!), $4 goes to delivery, $1.25 goes to the companies that process your credit cards, and $1 goes to the gas station owners.

To look at it "by the gallon," crude oil is 66% refining 13%, distribution and marketing 10%, and taxes 11%. Of course taxes includes state and federal excise taxes and state sales taxes.

Speaking directly about taxes on fuel, $25 Billion (that's Billion, with a B) was raised in 2006 by the federal fuel tax, 18.4 cents on a gallon of gasoline, 24.4 cents on a gallon of diesel.

I don't hear about big taxpayer bucks going to help the oil and gas industry, unless you're talking about tax breaks for those companies, which are no different than for any other industry. Can you explain what you mean by that in more detail, so I understand what you're saying?

[pphilfran]

Gas prices breakdown. (http://www.fivecentnickel.com/2008/06/13/what-goes-into-the-price-of-gas/)

California gas prices itemized. (http://energyalmanac.ca.gov/gasoline/margins/index.php)

Where your money goes at the pump. (http://fuelfix.com/blog/2012/07/18/where-does-your-money-go-at-the-gas-pump/)

In the last link, you will see that for every $50 spent on gas, $30.75 is the cost of the dead dinosaurs, $7 goes to the refiners ("Big Bad Evil Oil"), $6 goes to taxes (talk about windfall profits, do those receiving the tax revenue have anything to do with production of a gallon of gas?!?!?!), $4 goes to delivery, $1.25 goes to the companies that process your credit cards, and $1 goes to the gas station owners.

To look at it "by the gallon," crude oil is 66% refining 13%, distribution and marketing 10%, and taxes 11%. Of course taxes includes state and federal excise taxes and state sales taxes.

Speaking directly about taxes on fuel, $25 Billion (that's Billion, with a B) was raised in 2006 by the federal fuel tax, 18.4 cents on a gallon of gasoline, 24.4 cents on a gallon of diesel.

I don't hear about big taxpayer bucks going to help the oil and gas industry, unless you're talking about tax breaks for those companies, which are no different than for any other industry. Can you explain what you mean by that in more detail, so I understand what you're saying?


Accurate...don't forget to add the energy companies income tax payments when looking at who is actually the greedy organization....

[rock on sooner]

Gas prices breakdown. (http://www.fivecentnickel.com/2008/06/13/what-goes-into-the-price-of-gas/)

California gas prices itemized. (http://energyalmanac.ca.gov/gasoline/margins/index.php)

Where your money goes at the pump. (http://fuelfix.com/blog/2012/07/18/where-does-your-money-go-at-the-gas-pump/)

In the last link, you will see that for every $50 spent on gas, $30.75 is the cost of the dead dinosaurs, $7 goes to the refiners ("Big Bad Evil Oil"), $6 goes to taxes (talk about windfall profits, do those receiving the tax revenue have anything to do with production of a gallon of gas?!?!?!), $4 goes to delivery, $1.25 goes to the companies that process your credit cards, and $1 goes to the gas station owners.

To look at it "by the gallon," crude oil is 66% refining 13%, distribution and marketing 10%, and taxes 11%. Of course taxes includes state and federal excise taxes and state sales taxes.

Speaking directly about taxes on fuel, $25 Billion (that's Billion, with a B) was raised in 2006 by the federal fuel tax, 18.4 cents on a gallon of gasoline, 24.4 cents on a gallon of diesel.

I don't hear about big taxpayer bucks going to help the oil and gas industry, unless you're talking about tax breaks for those companies, which are no different than for any other industry. Can you explain what you mean by that in more detail, so I understand what you're saying?

The detailed explanations that several of you have laid out clarifies
a lot. I knew about the tax % and the crude costs, etc. I've always
known about what the gas station gets..2% is higher than I thought,
though...given how badly the stations want you to come inside their
stores.

Here's the rub about tax breaks to highly profitable businesses, whether
it's O/G or hi tech. It is hard to understand the gov't giving away tax
dollars to these companies when the profits are staggering. O/G gets
the brunt of it, as someone pointed out, because the prices of their
products is so visible. Hi tech not nearly as much because those products
aren't needed to get back and forth to work. The average Joe is reminded
every time he's fills his vehicle, for me and hi tech it's every two years when
I get a new smartphone.

R/R want to let green energy's subsidies wither and die. Companies are already
laying off assembly workers and are focusing on maintenance. But R/R don't
say a word about O/G, not a single word! (They do accept O/G's Texas money,
though.)

Soonerbread, I don't know if this answer helps you understand where I'm coming
from or not.

[okie52]

Rock on...I just can't follow your logic.

You say you don't need apple products to drive to work....but you do need apple products to work.

Expenses are real deductions. You don't want to allow oilies to deduct expenses but you don't have a problem letting a bailed out GM do the same thing?

You have a problem with green energy laying off people because it can't make it with subsidies ( which are different than write offs)? How viable is it then?

You still didn't answer my question why you don't have a problem with Obama giving unions a $60,000,000,000 exemption regardless of income...that's a he'll of a lot more than he is talking about from oil companies.

Plus, and maybe most importantly to you, the addional costs will be passed on to the consumer so every week when you fill up you are paying a higher price.

[pphilfran]

The detailed explanations that several of you have laid out clarifies
a lot. I knew about the tax % and the crude costs, etc. I've always
known about what the gas station gets..2% is higher than I thought,
though...given how badly the stations want you to come inside their
stores.

Here's the rub about tax breaks to highly profitable businesses, whether
it's O/G or hi tech. It is hard to understand the gov't giving away tax
dollars to these companies when the profits are staggering. O/G gets
the brunt of it, as someone pointed out, because the prices of their
products is so visible. Hi tech not nearly as much because those products
aren't needed to get back and forth to work. The average Joe is reminded
every time he's fills his vehicle, for me and hi tech it's every two years when
I get a new smartphone.

R/R want to let green energy's subsidies wither and die. Companies are already
laying off assembly workers and are focusing on maintenance. But R/R don't
say a word about O/G, not a single word! (They do accept O/G's Texas money,
though.)

Soonerbread, I don't know if this answer helps you understand where I'm coming
from or not.

What specific subsidies are you talking about...

As far as solar and wind how will they help us achieve our goal of independent energy?

What is the primary benefit of solar and wind power?

[rock on sooner]

Okie, first of all, green energy is nowhere nearly as mature and
hasn't had the chances and time that oil has had to develop. If it
was hundred year old plus industry, like oil is, then I would say
the same things about green as I do oil.

As to your question about $60B exemption, all I was able to find
about it was all viewpoints from the right. As I understand it,the
unions were given the exemption of paying on the "Cadillac" health-
care for five years but will eventually have to pay, with healthcare
providers, insurance companies and pharma companies being
"charged" with helping offset the $60B. It appears to be payback
for the unions' help in the election of '08. I'm not in favor of the
quid pro quo of politics, that is part of what has caused this mess
in the first place, but quid pro quo has been and always will be in
politics. It is the nature of the beast...bearing a slight resemblance
to Romney taking in $7 million in Texas oil money and not talking
about doing anything that Oil finds objectionable.

$60B handout? Nope, not in favor of it. Answer your question?

[pphilfran]

ROS wind and solar are financial losers that are strictly intended to reduce CO2 and environmental issues...they will do absolutely nothing to stem the flow of US dollars flowing overseas due to crude purchases...only one half of one percent of our electrical production ytd comes from crude and crude related production....and those plants are old and expensive due to the cost of crude and will be shut down with or without CO2 regulation...

The US has actually lowered it's release of CO2 into the atmosphere and cut coal usage dramatically due to NG usage taking a much larger part in energy production...that increase did not come because of draconian penalties such as cap and trade that add to energy cost...they came from cheaper ng due to new techniques in finding and producing ng...

If we are truly concerned about CO2 and the environment we should be concerned about China and India...China has increased it's CO2 emissions more in the last 10 years or so than the we produce each year...and their growth in regards to CO2 emission dwarfs the rest of the world...yet they continue to build coal fired plant after coal fired plant...

http://i264.photobucket.com/albums/ii187/pphilfran/co2china.jpg

[rock on sooner]

What specific subsidies are you talking about...

As far as solar and wind how will they help us achieve our goal of independent energy?

What is the primary benefit of solar and wind power?

Green energy has almost nothing to do with energy independence,
it has everything to do with not having to use as much coal for
electricity, it has everything to do with creating useful, renewable,
evironmentally friendly electricity for heating and cooling. The main
subsidy is a 2.2 cent per kwh payment to help offset production &
maintenance. IA is among the leading producers of wind energy,
second, I think to Texas, it has over 7000 jobs directly connected to
wind energy...I think the amount of electricity generated by wind is
20% of IA's total usage, so it's big and important. We don't have
much in the way of solar (although one college here in IA is constructing
a solar grid panel to power the entire school..goes on line this fall, I
think. Other community colleges have wind turbines on campus and
a number of homes in northeastern IA have small wind turbines powering
their homes. Various municipalities are reworking ordnances to allow
for private turbines.

[rock on sooner]

Phil, I'll only make one small point about China, I said
in an earlier thread that China, Russia and India are the
biggest offenders of all and no one says much about it
and does nothing about it.

[pphilfran]

So we will continue to give China a financial advantage due to their total disregard to environmental issues...

But we have gotten ourselves in such a financial problem with the trade deficit with them and their buying of US bonds we have little recourse to corral their increased spewing of CO2 and damage to the environment...

[pphilfran]

We must be smart in how we spend out money since the bank is empty...

We can reduce emissions and use a much cleaner ng instead of coal and not cost business or the consumer a significant amount of money and eliminate the subsidies to those very expensive solar and wind...we would still increase the number of high paying jobs in the ng industry that would replace the subsidized jobs in the green energy sector...I am fine with spending money on wind and solar R&D....

[okie52]

Rock on-

The irony of Obama taxing everyone else but unions on Cadillac plans is that he chastised McCain for being for a tax on Cadillac plans.

Green energy has been around for 40 years...whether you're talking solar, wind, or ethanol. It has received subsidies for virtually its entire existence. At what point does it become a mature industry?

Is the auto industry a mature industry?

I support R & D for alternative fuels but not for the government trying to enter the green energy marketplace like it did with solyndra.

It's hard for me to imagine any sane oily being for Obama and most of their money will support Romney or whomever opposes Obama. There are a few though like Kaiser...but then there's that whole solyndra deal so he wasn't as stupid as he looked.

[pphilfran]

Then we have Obama touting clean coal...lol...clean coal is a bunch of crap...

It will use a tremendous amount of energy to scrub the CO2...then for some reason we think we can each and every year store many cubic miles of compressed CO2 in underground caverns for eternity...yet we can't figure out a way to store a small amount (in comparison to CO2 storage) of nuke waste...

And if by some miracle we can find a way to store the CO2 from coal we still have the dirty and ugly mining methods to deal with...

Clean coal...lol....

[pphilfran]

Obama's energy plan is not a plan...it is no smoke and mirrors...

[rock on sooner]

We must be smart in how we spend out money since the bank is empty...

We can reduce emissions and use a much cleaner ng instead of coal and not cost business or the consumer a significant amount of money and eliminate the subsidies to those very expensive solar and wind...we would still increase the number of high paying jobs in the ng industry that would replace the subsidized jobs in the green energy sector...I am fine with spending money on wind and solar R&D....

Agree 100% about being smart with our money. It is puzzling
to me that you feel ng should replace green energy. There are
a LOT of people working in green energy right now and, at least
on the surface, you're saying that ng should replace it. What's
wrong with maintaining green? NG is gonna survive and flourish.
Green will really shrivel up and may not survive at all. The sun is
always gonna shine, wind is always gonna blow, why not use them
to the maximum.

[pphilfran]

Because they are as expensive as hell and would make us even less competitive with China...get the rest of the world on board and I will buy in...but I will be damned if I want to give them an even bigger advantage then they currently enjoy...

You are correct in that ng will survive and flourish so they do not need the subsidies that wind and solar enjoy...

As Okie stated it has been around for forever and they still need subsidy...and subsidy doesn't make it cheaper..R&D is fine with me...

NG is far cheaper than wind and solar
NG is cleaner than coal and will only increase cost slightly, it that, and require no subsidy
NG can be used for transportation...coal, wind, and solar not so much
NG is a fine middle ground to transition us into the future when solar and fuel cells become viable....

[SoonerBread]

The detailed explanations that several of you have laid out clarifies
a lot. I knew about the tax % and the crude costs, etc. I've always
known about what the gas station gets..2% is higher than I thought,
though...given how badly the stations want you to come inside their
stores.

Here's the rub about tax breaks to highly profitable businesses, whether
it's O/G or hi tech. It is hard to understand the gov't giving away tax
dollars to these companies when the profits are staggering. O/G gets
the brunt of it, as someone pointed out, because the prices of their
products is so visible. Hi tech not nearly as much because those products
aren't needed to get back and forth to work. The average Joe is reminded
every time he's fills his vehicle, for me and hi tech it's every two years when
I get a new smartphone.

R/R want to let green energy's subsidies wither and die. Companies are already
laying off assembly workers and are focusing on maintenance. But R/R don't
say a word about O/G, not a single word! (They do accept O/G's Texas money,
though.)

Soonerbread, I don't know if this answer helps you understand where I'm coming
from or not.

I think I'm catching your drift, but I'm not sure you and I are speaking the same language. I see/hear the word subsidy and I think money given away, like an award or grant. I see/hear tax break and I think deduction. If you are linking subsidy and deduction together as the same thing, and that's what it looks like to me, for the sake of this discussion, that's okay with me. But I would pose this question... All things being unequal across different industries, why is it okay for one industry to pay more as a percentage than others? Forget about hard dollar figures for a minute. It wasn't long ago that oil and gas companies, refiners more specifically, were taking a bath because of the margins of their products. One reason margins are what they are today is because the price of oil is significantly higher than it has been in history, and in order to procure $80 barrel crude today, not knowing if it will sell as a refined product as $75 barrel crude would next month, there needs to be contingency. Oil is bought on the futures market but refined today. When products are sold, it's not sold as a future, but in the current market at current prices. So if I buy $80 barrel crude today for December's production, but in December the refined products are worth $81 per barrel, combined, the margin is $1 per barrel. In December, I might be buying $100 barrel crude for March production. Of course, I could be buying $80 barrel crude today for December production, and selling refined products in December at prices worth $150 barrel, combined, and the margin looks better. Crude is traded in futures, products are sold at what price it fetches today. The margins are sensitive more to the cost of procurement than they are to sales. All that to say that the taxes on companies who make the petroleum products are constant, in terms of percentages. So just like any other business, when margins are good, and lots of money is being made, lots of taxes are being paid, and net profits still look amazing. When margins are bad, and not much taxes are being paid, net profits don't look very good. Oil and gas makes lots and lots of money. But the cost of their raw products is outlandish, and their tax burden is generally the same as other industries in terms of percentages. But I'm curious, do companies like Apple and Microsoft have to be contingent upon things outside their control, like EPA regs, environmental credits, supply price fluctuations? Those are all things that are part of doing business in oil and gas, and go with the territory. But just because company A has over the top profits doesn't mean they should be on the hook for a higher tax burden than company B, who doesn't make as much but still makes lots of money, IMO.

Part of your post is the rub a lot of Americans feel - you said you have to buy gas to get to work, but you don't have to buy an iPhone to get to work. So the price of a gallon of gas is very sensitive to you because you don't have much choice in whether or not to buy it. It's almost viewed as a utility cost most people, rather than a luxury item, like an iPhone would be. That's because the alternative, walking or biking to work, is not reasonable for most people in this country. We live rurally or suburbanly, but work urbanly. Commute is a big deal, and gas makes commuting by car very expensive for some. But how much does a gallon of milk cost? How about if you took a 20 oz. bottled water and figured out what it costs per gallon. Items like those are not nearly as harped on because people feel like they have some choice in the matter as to whether or not to buy them, but feel captive to buying gasoline or diesel.

I don't like the price of gas either, and I'm in the business of making it and other petroleum products. I don't get discounts like other people do when they buy their company's products. I buy it at the pump, just like everyone else. There's no reimbursement or incentive plan. I would love for gas to sell cheaper, but there's lots of hands in that cookie jar for that to ever happen again. Demand, taxes, supply, taxes, supply cost, taxes, environmental credits, supply cost, taxes, and taxes and supply cost all have to change before any significant releif is in sight. Oil companies pay taxes on purchasing crude (hidden as a refining cost), taxes on property, payroll taxes, taxes on products sitting in tanks waiting to be bought, credits to EPA and DEQs jsut to operate, operating licenses on plants and certain individual pieces of equipment, and on and on. O/G is probably the most regulated, fined, taxed industry there is in this country. Not saying it shouldn't be, because those regulations have made the industry safer, cleaner, and more efficient. But those concepts have a cost; they aren't free.

Sorry for the length. I hope you don't take this post as condescending or argumentative. Just trying to shed a little light on the subject. By no means am I an expert on this matter, but I do know a little something about it that I didn't know before I began my career in a refinery.

[rock on sooner]

Rock on-

The irony of Obama taxing everyone else but unions on Cadillac plans is that he chastised McCain for being for a tax on Cadillac plans.

Green energy has been around for 40 years...whether you're talking solar, wind, or ethanol. It has received subsidies for virtually its entire existence. At what point does it become a mature industry?

Is the auto industry a mature industry?

I support R & D for alternative fuels but not for the government trying to enter the green energy marketplace like it did with solyndra.

It's hard for me to imagine any sane oily being for Obama and most of their money will support Romney or whomever opposes Obama. There are a few though like Kaiser...but then there's that whole solyndra deal so he wasn't as stupid as he looked.

Okie, no question about Solyndra being a screwup. A lot of folks
are hard after ethanol now, never has made much of a dent, but
has supported a lot of jobs. Yeah, I'd say the auto industry is
mature but, most of it was poorly managed, so the gov't stepped
in and saved it, along with well over a million jobs and countless
small businesses that supported the industry.

As to green becoming mature...wind is not that old, solar is older
and not in need of as much help as wind.

I have absolutely no doubt about any oily supporting Obama or
any Dem. It isn't in their DNA.

One last point...every politician wanting to be president has said
he/she wants to go to Washington and change how things are done
there. EVERY ONE, and I go back to Truman, you know, the guy who
coined the phrase "Do Nothing Congress"? Each one of those men (so
far, only men) found out that they couldn't change how things were
done, only try to work with them...fat chance..

[pphilfran]

The first wind farm was put in place in 1980

[SoonerBread]

Just to add, there hasn't been a refinery built in this country in a long, long time, yet plant closures are more and more common. Yet people talk about how much money the oil refiners reap in. If the business what that exploitative, and cash was there for the taking, refiners wouldn't be shutting plants down. Ask Sunoco. The sold their Tulsa, OK and Toledo, OH refineries, shut down their Westville, NJ and Marcus Hook, PA refineries, and are actively seeking a buyer for thier Philadelphia refinery, else shut it down. They are exiting the refining business and transitioning to the retail business, totally and completely. They sold off their coke business, their chemicals business, and divested in their logistics (pipeline) spin-off. All so they would have the necessary cash flow to maximize their only viable business unit, their branded gas stations.

I promise you, if making gas out of dead dinosaurs was that lucrative, people would be fighting to build a refinery. But if you applied for all the permits and licensing needed today, you wouldn't even break ground for another 10 years, much less be producing anything then. There hasn't been a long-standing, viable entity enter the refining business without an already established refinery since the 60's. Any new players are investment groups who buy fledgling refineries so they can flip them or use them as a tax shelter. Seriously.

[pphilfran]

Altamont Pass Wind Farm in Cali was built in 1981

[pphilfran]

Just to add, there hasn't been a refinery built in this country in a long, long time, yet plant closures are more and more common. Yet people talk about how much money the oil refiners reap in. If the business what that exploitative, and cash was there for the taking, refiners wouldn't be shutting plants down. Ask Sunoco. The sold their Tulsa, OK and Toledo, OH refineries, shut down their Westville, NJ and Marcus Hook, PA refineries, and are actively seeking a buyer for thier Philadelphia refinery, else shut it down. They are exiting the refining business and transitioning to the retail business, totally and completely. They sold off their coke business, their chemicals business, and divested in their logistics (pipeline) spin-off. All so they would have the necessary cash flow to maximize their only viable business unit, their branded gas stations.

I promise you, if making gas out of dead dinosaurs was that lucrative, people would be fighting to build a refinery. But if you applied for all the permits and licensing needed today, you wouldn't even break ground for another 10 years, much less be producing anything then. There hasn't been a long-standing, viable entity enter the refining business without an already established refinery since the 60's. Any new players are investment groups who buy fledgling refineries so they can flip them or use them as a tax shelter. Seriously.


To be honest I don't see any future growth in gasoline...I think product cost will drive consumers to higher mileage vehicles...ng will hopefully also take a share of heavy trucking usage which will free up crude for gas usage...so I don't really see a need for expanding refinery production other than efficiency improvements that are ongoing...

[Skysooner]

To be honest I don't see any future growth in gasoline...I think product cost will drive consumers to higher mileage vehicles...ng will hopefully also take a share of heavy trucking usage which will free up crude for gas usage...so I don't really see a need for expanding refinery production other than efficiency improvements that are ongoing...

Not a good idea at this point. We aren't allowed to export crude oil which means any oil produced in the country has to be refined here. We are seeing huge upsurges in production of light, sweet crude vs. the heavier crude of Canada which most of the refineries have been retrofitted for. Without refineries under current non-export regulations, we are seeing capacity issues even now.

We have enough NG at a cheap cost that it even makes sense for cars. This isn't a slow drip system like electricity. There will be high pressure NG fueling stations that fill up cars just as fast as regular gasoline stations.

[pphilfran]

Good point on the export issue...hadn't thought of that...

[pphilfran]

I don't have a problem with personal vehicles using ng...the current push is for heavy trucking and fleet usage which makes it easier to build the infrastructure....

[Skysooner]

I don't have a problem with personal vehicles using ng...the current push is for heavy trucking and fleet usage which makes it easier to build the infrastructure....

Have to have the first before personal vehicles are even feasible. That way we get interstate infrastructure and then we fill in the gaps.

[rock on sooner]

SoonerBread, I take your post for what you intend it to be. I
spent 42 years working in the service industry and, you bet
that Apple and Microsoft have onerous regs, too. OSHA, EPA,
city ordnances, NLRB, EOE and on and on. Example, can't go
more than 4 hours without a break (in retail)..they come in
and inspect time cards...each offense can and is fined...lunch
break violation...huge fine...minor operating forklift..huge fine...
it goes on...Those industries have the payroll taxes, etc that
oil & gas have... they are effected by futures, supplier problems,
too. Admittedly, not to the degree O&G is, though.

I understand your points about futures and current refining.
My only point about the pricing is the immediacy of price jumps
(I'm guessing the Venzuela refinery problem will cause the pump
prices to jump), the size of those jumps and agonizingly slow those
same prices are to come down...they really don't.

As to tax breaks or subsidies, call it what you will, to let a promising
industry die and still support others with more than what wind was
getting doesn't seem right.

[pphilfran]

Have to have the first before personal vehicles are even feasible. That way we get interstate infrastructure and then we fill in the gaps.

Yep

[pphilfran]

SoonerBread, I take your post for what you intend it to be. I
spent 42 years working in the service industry and, you bet
that Apple and Microsoft have onerous regs, too. OSHA, EPA,
city ordnances, NLRB, EOE and on and on. Example, can't go
more than 4 hours without a break (in retail)..they come in
and inspect time cards...each offense can and is fined...lunch
break violation...huge fine...minor operating forklift..huge fine...
it goes on...Those industries have the payroll taxes, etc that
oil & gas have... they are effected by futures, supplier problems,
too. Admittedly, not to the degree O&G is, though.

I understand your points about futures and current refining.
My only point about the pricing is the immediacy of price jumps
(I'm guessing the Venzuela refinery problem will cause the pump
prices to jump), the size of those jumps and agonizingly slow those
same prices are to come down...they really don't.

As to tax breaks or subsidies, call it what you will, to let a promising
industry die and still support others with more than what wind was
getting doesn't seem right.

What support do you want to eliminate from oil and gas...please be specific...it is already taxed to death....

[okie52]

Not a good idea at this point. We aren't allowed to export crude oil which means any oil produced in the country has to be refined here. We are seeing huge upsurges in production of light, sweet crude vs. the heavier crude of Canada which most of the refineries have been retrofitted for. Without refineries under current non-export regulations, we are seeing capacity issues even now.

We have enough NG at a cheap cost that it even makes sense for cars. This isn't a slow drip system like electricity. There will be high pressure NG fueling stations that fill up cars just as fast as regular gasoline stations.

I thought we were exporting crude from Alaska to Japan.

[Skysooner]

I thought we were exporting crude from Alaska to Japan.

Maybe it is just the lower 48. This is what I heard from our Fundamentals team out of Calgary. I forget the exact regulation, but it has been in place for years. Only export of refined products.

[SoonerBread]

Maybe it is just the lower 48. This is what I heard from our Fundamentals team out of Calgary. I forget the exact regulation, but it has been in place for years. Only export of refined products.

That's what I thought as well...

We import the **** outta crude. Not sure why we'd export any if we indeed do.

[Skysooner]

That's what I thought as well...

We import the **** outta crude. Not sure why we'd export any if we indeed do.

We won't be in about 8 years if all goes well.

[okie52]

Maybe it is just the lower 48. This is what I heard from our Fundamentals team out of Calgary. I forget the exact regulation, but it has been in place for years. Only export of refined products.

I'm fine with only exporting refined crude although I think maybe this was a logistical issue. I certainly think the US should a right to have a call on production on anything produced within its domain.

[Skysooner]

I'm fine with only exporting refined crude although I think maybe this was a logistical issue. I certainly think the US should a right to have a call on production on anything produced within its domain.

Problem is without refining capacity and the inability to export crude, our storage will get full, differentials will drop which will make further development uneconomic, etc.

[rock on sooner]

What support do you want to eliminate from oil and gas...please be specific...it is already taxed to death....

Aw, ****, jus leave it all alone..you guys have all the answers:victorious:
Let's just go down the hole that you want. O&G is it, no chance here of
getting an answer of any sort of give and take..sorry, guys, I tried...I give
up....say G'night, Gracie....

[Skysooner]

Aw, ****, jus leave it all alone..you guys have all the answers:victorious:
Let's just go down the hole that you want. O&G is it, no chance here of
getting an answer of any sort of give and take..sorry, guys, I tried...I give
up....say G'night, Gracie....

We don't need subsidies but don't call tax breaks that everyone else gets subsidies. O&G will take care of itself. As the cost goes up, the ability to bring other energy sources in profitably happens. This will be a gradual transition unless there is some huge revolutionary breakthrough like cold fusion.

[yermom]

What support do you want to eliminate from oil and gas...please be specific...it is already taxed to death....

apparently "death" means record profits

[Skysooner]

apparently "death" means record profits

This is the multi-nationals, but they already don't get to take much of the tax breaks. That is the fallacy of the whole thing. Individual companies like Chesapeake, Devon, Encana, EOG, etc. are undervalued in their stock and face uncertain cash flows next year due to low NG prices. We are the ones that get those tax breaks, and we are also the majority of production in the United States. Exxon, Shell, etc. aren't allowed to use those same tax breaks because they are multi-nationals. I'm not an accountant, but I have read this before. Hence the record profits are the amount of profit. They still aren't use rates of return overall. Those companies have huge valuations, and you expect 6-15% profit returned a year. For companies like mine, we are really struggling right now, and we get Obama saying he wants to end tax breaks. It is a completely disingenuous argument.

[rock on sooner]

We don't need subsidies but don't call tax breaks that everyone else gets subsidies. O&G will take care of itself. As the cost goes up, the ability to bring other energy sources in profitably happens. This will be a gradual transition unless there is some huge revolutionary breakthrough like cold fusion.

O&G will ALWAYS take care of itself.

[Skysooner]

O&G will ALWAYS take care of itself.

It is different being inside the industry. There are sharks in every field. All kinds of industries want subsidies. Mostly what we want is a level playing field where we know where we stand. Hard to do a good business plan without that. I know my particular company is always trying to do it right, and the majors are definitely trying to do it right. BP spill was one of those 1 in a million instances that do happen at times. Low risk doesn't mean no risk. Hopefully they get there house in order though as the managers were running that thing, and managers as a rule are too far away from the line to completely understand risk anymore. Luckily I'm a working manager which means I do understand risk. Risk and uncertainty are very interesting topics (at least to me).

[rock on sooner]

It is different being inside the industry. There are sharks in every field. All kinds of industries want subsidies. Mostly what we want is a level playing field where we know where we stand. Hard to do a good business plan without that. I know my particular company is always trying to do it right, and the majors are definitely trying to do it right. BP spill was one of those 1 in a million instances that do happen at times. Low risk doesn't mean no risk. Hopefully they get there house in order though as the managers were running that thing, and managers as a rule are too far away from the line to completely understand risk anymore. Luckily I'm a working manager which means I do understand risk. Risk and uncertainty are very interesting topics (at least to me).

At the risk of backtracking on my "I give up"! post..Sorry, but
just how "level" does the field need to be? O&G has been calling
the shots for as long as I can remember, and if any group shows
shows up to do differently then the claws really manifest themselves.
O&G has been calling the shots since, at least the '50's, prolly longer
but I don't know for certain...

[Skysooner]

At the risk of backtracking on my "I give up"! post..Sorry, but
just how "level" does the field need to be? O&G has been calling
the shots for as long as I can remember, and if any group shows
shows up to do differently then the claws really manifest themselves.
O&G has been calling the shots since, at least the '50's, prolly longer
but I don't know for certain...

Perception but some of it is reality. The majors call the shots or they used to in the states. They don't so much anymore. Mostly they are overseas. The regulations are really tight in our industry and because we have lots of scrutiny, we have to be pretty above board. I would say you were right up until maybe 1983 when Penn Square Bank went down. After that the majors were overseas mostly. The independents have clout for sure but not as much as say coal or aerospace. We are just mentioned more than the others. Think about the military-industrial complex Eisenhower warned about. They are there and huge. Today it is the banks.

[rock on sooner]

Perception but some of it is reality. The majors call the shots or they used to in the states. They don't so much anymore. Mostly they are overseas. The regulations are really tight in our industry and because we have lots of scrutiny, we have to be pretty above board. I would say you were right up until maybe 1983 when Penn Square Bank went down. After that the majors were overseas mostly. The independents have clout for sure but not as much as say coal or aerospace. We are just mentioned more than the others. Think about the military-industrial complex Eisenhower warned about. They are there and huge. Today it is the banks.

That's a fair statement, I think, 'cept i think it's not the banks,
' cause they don't have as much money as O&G.

[Skysooner]

That's a fair statement, I think, 'cept i think it's not the banks,
' cause they don't have as much money as O&G.

I just looked at Wells Fargo, and they are worth more than 10 times than we are, and we are the 2nd largest producer of NG in North America. Banks have far more money than you think.

[rock on sooner]

I just looked at Wells Fargo, and they are worth more than 10 times than we are, and we are the 2nd largest producer of NG in North America. Banks have far more money than you think.

Ummm,offshore wealth? Jus askin....

[Skysooner]

Ummm,offshore wealth? Jus askin....

Again multi-nationals. Those are the ones that don't get the tax breaks that Obama speaks about.

[rock on sooner]

Again multi-nationals. Those are the ones that don't get the tax breaks that Obama speaks about.

Might be because we can't tax the off shore stuff, so they don't
need the "breaks" and you gotta know that soooo much gets
moved to those entities....yup, prolly legal but shunt be...

[Skysooner]

Might be because we can't tax the off shore stuff, so they don't
need the "breaks" and you gotta know that soooo much gets
moved to those entities....yup, prolly legal but shunt be...

Absolutely. The funny thing is the majors that are in Argentina aren't allowed to ship profits out. They instead have to buy local companies that have nothing to do with O&G. I think you will find though that the vast majority of production in the world (aside from the NOCs) is independent companies that operate in one or two countries and need the breaks that everyone else gets. Exxon is the largest NG producer in North America after buying XTO. We are number 2, and a close number 2, but we are far from as profitable. We don't have the personnel or expertise to operate in those foreign countries.

[okie52]

Problem is without refining capacity and the inability to export crude, our storage will get full, differentials will drop which will make further development uneconomic, etc.

Ahh, yes...we need more refineries but they are almost as hard to build as nukes due to regulations

There have been some smaller refineries reopen in OK but it is a small blip on the radar...the reason refineries Are reopened is it a much easier process than building a new one just like it is easier to expand an existing refinery than build a new one.

I would hope that increased domestic production would displace imported crudes refinement until we can expand our capacity.

[rock on sooner]

Absolutely. The funny thing is the majors that are in Argentina aren't allowed to ship profits out. They instead have to buy local companies that have nothing to do with O&G. I think you will find though that the vast majority of production in the world (aside from the NOCs) is independent companies that operate in one or two countries and need the breaks that everyone else gets. Exxon is the largest NG producer in North America after buying XTO. We are number 2, and a close number 2, but we are far from as profitable. We don't have the personnel or expertise to operate in those foreign countries.

Well, hire smarter people...:smug:

[okie52]

Might be because we can't tax the off shore stuff, so they don't
need the "breaks" and you gotta know that soooo much gets
moved to those entities....yup, prolly legal but shunt be...

There have been some dems push for eliminating the deduction of taxes paid to foreign countries by US companies operating in those countries...are you for that?

[Skysooner]

Well, hire smarter people...:smug:

Got one here...working in other countries is more about being politically astute. I'm not sure our management team is that astute.

[rock on sooner]

Got one here...working in other countries is more about being politically astute. I'm not sure our management team is that astute.

Hire that bunch from Walmart that were involved in kickbacks
and bribes.. .

[rock on sooner]

There have been some dems push for eliminating the deduction of taxes paid to foreign countries by US companies operating in those countries...are you for that?

If those tax deductions are legitimate, no, I'm not for that. I have
heard multi-national companies say they lose money here in the
U.S. but do really well abroad, thereby not paying taxes in the U.S.
and, in many cases, pay a lower rate abroad, especially when any
and all U.S. profits are moved abroad. That's likely what those Dems
are talking about, although I do not know for certain. I am for every
one paying fairly, I don't think that's unreasonable.

[okie52]

If those tax deductions are legitimate, no, I'm not for that. I have
heard multi-national companies say they lose money here in the
U.S. but do really well abroad, thereby not paying taxes in the U.S.
and, in many cases, pay a lower rate abroad, especially when any
and all U.S. profits are moved abroad. That's likely what those Dems
are talking about, although I do not know for certain. I am for every
one paying fairly, I don't think that's unreasonable.

Let's look at GM. They produce autos in the US and invest capital here and hire thousands of workers domestically. They pay taxes here in the US for their profits derived in the US. They also build in Europe and around the world. Why do we care if they pay only taxes in the countries outside the US where they are manufacturing the vehicles?

The same would hold true in reverse for Nissan, Toyota, and Honda. They pay taxes here for their profits that are made here and they employ thousands of workers domestically. I really can't see how we could fairly expect someone to be paying taxes in both places. However, I am not an accountant so if someone is cooking the books I am not aware of it.

[rock on sooner]

Let's look at GM. They produce autos in the US and invest capital here and hire thousands of workers domestically. They pay taxes here in the US for their profits derived in the US. They also build in Europe and around the world. Why do we care if they pay only taxes in the countries outside the US where they are manufacturing the vehicles?

The same would hold true in reverse for Nissan, Toyota, and Honda. They pay taxes here for their profits that are made here and they employ thousands of workers domestically. I really can't see how we could fairly expect someone to be paying taxes in both places. However, I am not an accountant so if someone is cooking the books I am not aware of it.

Ya miss my point, or I didn't make it clearly. I don't think anyone should
pay taxes in both places, I think they should pay taxes on profits in each
country. My point is that there those who think the multinationals creatively
move profits to other countries to avoid U.S. taxes and pay the lower tax
rates is other countries...maybe an argument to lower corporate tax rates,
but very few pay the 35% (I agree that is HIGH). That's why I argue to
lower the rates..maybe 25%, grant tax amnesty to those companies to allow
them to "repatriate" the trillions from overseas and invest here in this country,
and then actually close the many loopholes that allowed them to park trillions
overseas in the first place. JMO..

[SoonerBread]

I don't think you can move profits and avoid taxes. That's income. Income earned here is taxed here.

Foreign assets are not taxable in this country. If they're moving money, it's to not have to continually pay taxes on the money that money or those assets earn. But the income generated here is still taxed here.

Not sure why we're worried about whether or not American company profits earned in Germany are paid in Germany. Why do we care?

Please correct and educate me if I'm wrong.

[okie52]

Ya miss my point, or I didn't make it clearly. I don't think anyone should
pay taxes in both places, I think they should pay taxes on profits in each
country. My point is that there those who think the multinationals creatively
move profits to other countries to avoid U.S. taxes and pay the lower tax
rates is other countries...maybe an argument to lower corporate tax rates,
but very few pay the 35% (I agree that is HIGH). That's why I argue to
lower the rates..maybe 25%, grant tax amnesty to those companies to allow
them to "repatriate" the trillions from overseas and invest here in this country,
and then actually close the many loopholes that allowed them to park trillions
overseas in the first place. JMO..

I'm not good enough at accounting to know how some of these companies can manufacture a product here and hide the profits in overseas tax havens. I suppose a GM could show parts costs originating in other countries for products completed here in the US as their profit center. I honestly don't know but I'm sure a decent accountant should be able to dig that out.

I'm for tax rates being applied in the country where the products are built/manufactured but, again, when different parts are manufactured in maybe 10 different countries I'm sure there is some creative bookkeeping.

[pphilfran]

apparently "death" means record profits

Last fiscal year

Exxon http://www.dailyfinance.com/quote/nyse/exxonmobil-corp/xom/financial-statements?source=esadlfltnal0001
Sales 471 billion
Income prior to interest and taxes (EBIT) 73 billion
Income taxes 31 billion (6.6% of sales and 42.5% of income)

Apple http://www.dailyfinance.com/quote/nasdaq/apple/aapl/financial-statements?source=esadlfltnal0001
Sales 108 billion
EBIT 34 billion
Income taxes 8.2 billion (7.6% of sales and 24.1% of income)

Wal Mart http://www.dailyfinance.com/quote/nyse/wal-mart-stores/wmt/financial-statements?source=esadlfltnal0001
Sales 447 billion
EBIT 26.7 billion
Income taxes 8 billion (1.9% of sales and 30% of income)

Intel http://www.dailyfinance.com/quote/nasdaq/intel-corp/intc/financial-statements?source=esadlfltnal0001
Sales 54 billion
EBIT 18 billion
Income taxes 5 billion (9.3% of sales and 27.8% of income)

GM http://www.dailyfinance.com/quote/nyse/general-motors-company/gm/financial-statements?source=esadlfltnal0001
Sales 150 billion
EBIT 10 billion
Income taxes 110 million (.67% of sales and 1.2% of income)

Target http://www.dailyfinance.com/quote/nyse/target/tgt/financial-statements?source=esadlfltnal0001
Sales 70 billion
EBIT 5 billion
Income taxes 1.5 billion (2.1% of sales and 30% of income)

JP Morgan http://www.dailyfinance.com/quote/nyse/jpmorgan-chase-co/jpm/financial-statements?source=esadlfltnal0001
Sales 111 billion
EBIT 40 billion
Income taxes 8 billion (7.2% of sales and 22.5% of income)

[SoonerBread]

Last fiscal year

Exxon http://www.dailyfinance.com/quote/nyse/exxonmobil-corp/xom/financial-statements?source=esadlfltnal0001
Sales 471 billion
Income prior to interest and taxes 73 billion
Income taxes 31 billion (6.6% of sales and 42.5% of income)

Apple http://www.dailyfinance.com/quote/nasdaq/apple/aapl/financial-statements?source=esadlfltnal0001
Sales 108 billion
Income prior to interest and taxes 34 billion
Income taxes 8.2 billion (7.6% of sales and 24.1% of income)

Wal Mart http://www.dailyfinance.com/quote/nyse/wal-mart-stores/wmt/financial-statements?source=esadlfltnal0001
Sales 447 billion
Income 26.7 billion
Income taxes 8 billion (1.9% of sales and 30% of income)

Intel http://www.dailyfinance.com/quote/nasdaq/intel-corp/intc/financial-statements?source=esadlfltnal0001
Sales 54 billion
Income 18 billion
Income taxes 5 billion (9.3% of sales and 27.8% of income)

GM http://www.dailyfinance.com/quote/nyse/general-motors-company/gm/financial-statements?source=esadlfltnal0001
Sales 150 billion
Income 10 billion
Income taxes 110 million (6.7% of sales and 1.2% of income)

Target http://www.dailyfinance.com/quote/nyse/target/tgt/financial-statements?source=esadlfltnal0001
Sales 70 billion
Income 5 billion
Income taxes 1.5 billion (2.1% of sales and 30% of income)

JP Morgan http://www.dailyfinance.com/quote/nyse/jpmorgan-chase-co/jpm/financial-statements?source=esadlfltnal0001
Sales 111 billion
Income 40 billion
Income taxes 8 billion (7.2% of sales and 22.5% of income)

Money...

[pphilfran]

Hey...I wasn't done editing!

Check out GM....

[cleller]

That is interesting up there ^^.

Look at Apple's income to sales ratio compared to Exxon at WM.

[okie52]

Hey...I wasn't done editing!

Check out GM....

A whole 1.2% of income? Pretty impressive. I'm sure Obama will be all over them.

[pphilfran]

That is interesting up there ^^.

Look at Apple's income to sales ratio compared to Exxon at WM.

They have built a fine name and charge a premium for that name...their numbers reflect that....

[pphilfran]

GM is a little better last quarter http://www.dailyfinance.com/quote/nyse/general-motors-company/gm/financial-statements?source=esadlfltnal0001

Sales 37.6 billion
EBIT 2.2 billion
Income taxes 241 million (.64% of sales and 11% of income)

[soonercruiser]

GM is a little better last quarter http://www.dailyfinance.com/quote/nyse/general-motors-company/gm/financial-statements?source=esadlfltnal0001

Sales 37.6 billion
EBIT 2.2 billion
Income taxes 241 million (.64% of sales and 11% of income)

That's good news for the half owner unions.
:cold: