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Thread: Long Arm of Oil

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    gz_
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    Long Arm of Oil

    I find this chain reaction pretty amazing. High oil prices encourage farmers to plant corn for ethanol, more corn means less wheat planted, less wheat planted means higher wheat prices, higher wheat prices means more conserved land put into use.

    http://www.nytimes.com/2008/04/09/bu...9conserve.html

    What's hilarious/troubling is that some people still don't get it:
    “We’re in a crisis here. Do we want to eat, or do we want to worry about the birds?” asked JR Paterakis, a Baltimore baker who said he was so distressed at a meeting last month with Edward T. Schafer, the agriculture secretary, that he stood up and started speaking “vehemently.”

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    Do we want to worry about the birds? With all due respect, the planet was here before we were...it is not ours to treat as we please. And living on this planet isn't ALL ABOUT US.
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    Quote Originally Posted by gz_ View Post
    I find this chain reaction pretty amazing. High oil prices encourage farmers to plant corn for ethanol, more corn means less wheat planted, less wheat planted means higher wheat prices, higher wheat prices means more conserved land put into use.

    http://www.nytimes.com/2008/04/09/bu...9conserve.html

    What's hilarious/troubling is that some people still don't get it:
    When every square inch of the country is under intense agriculture (as it is in Iowa and a good many other mid west states...), you run into situations where agriculture is so intense that it seriously pollutes drinking water. There was an article in last weeks Des Moines Register outlining all the drastic measures the local water utility undertakes to deal with the excess ammonia in the water supply at this time of year.

    So... yes, the side-effects of oil shortages are already far-reaching. Although, for my money, the Iraq war is the biggest side-effect.

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    What is your basis for saying Iraq is about oil? If we had wanted oil we could have bought it from Saddam!
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    Quote Originally Posted by wmodavis View Post
    What is your basis for saying Iraq is about oil? If we had wanted oil we could have bought it from Saddam!

    You're kidding, right?

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    It isn't a case of "higher oil prices encouraging farmers to plant corn for ethanol", it's a case of government subsidies encouraging farmers to plant corn for ethanol. And the truly "amazing" part is that it's also government subsidies encouraging farmers not to plant anything. So the farmers are obviously going to take whichever subsidy is largest.

    The simple answer is to get the government out of the subsidy business, but that's obviously not going to happen. So I hope all you big-government "progressives" are enjoying the fruits of your labor.
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    reductio ad absurdum ericy's Avatar
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    Quote Originally Posted by Six jours View Post
    The simple answer is to get the government out of the subsidy business, but that's obviously not going to happen. So I hope all you big-government "progressives" are enjoying the fruits of your labor.
    I agree with getting rid of ag subsidies for ethanol, but Big Oil gets lots of subsidies too, and we should end that as well.

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    Quote Originally Posted by wmodavis View Post
    What is your basis for saying Iraq is about oil? If we had wanted oil we could have bought it from Saddam!
    It's about which country "controls" the most oil reserves. What we are seeing today is the
    first of the "Oil Wars". It only goes downhill from here..........
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    Sophomoric Member Roody's Avatar
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    Quote Originally Posted by Six jours View Post
    It isn't a case of "higher oil prices encouraging farmers to plant corn for ethanol", it's a case of government subsidies encouraging farmers to plant corn for ethanol. And the truly "amazing" part is that it's also government subsidies encouraging farmers not to plant anything. So the farmers are obviously going to take whichever subsidy is largest.

    The obvious answer is to get the government out of the subsidy business, but that's obviously not going to happen. So I hope all you big-government "progressives" are enjoying the fruits of your labor.
    A good analysis except for one thing. Farm subsidies are more of a pocketbook issue rather than an ideological issue. Progressives are usually not in favor of commodity subsidization. It's usually politicians from farm states who enact these subsidies. They tend to be conservative Republicans, although there are exceptions, such as a certain Senator from Illinois.


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    Quote Originally Posted by ericy View Post
    I agree with getting rid of ag subsidies for ethanol, but Big Oil gets lots of subsidies too, and we should end that as well.
    No argument there.

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    Quote Originally Posted by Roody View Post
    A good analysis except for one thing. Farm subsidies are more of a pocketbook issue rather than an ideological issue. Progressives are usually not in favor of commodity subsidization. It's usually politicians from farm states who enact these subsidies. They tend to be conservative Republicans, although there are exceptions, such as a certain Senator from Illinois.
    Pork, of course, knows no boundaries. Making fun of neocons doesn't exactly get one noticed around here, though, so the best bait for trolling the "car free" forum is a gratuitous shot at liberals. :-)

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    Quote Originally Posted by ericy View Post
    I agree with getting rid of ag subsidies for ethanol, but Big Oil gets lots of subsidies too, and we should end that as well.
    Uh, could you please name which subsidies Big Oil (there are three big U S oil companies now) receives?

    Please be specific rather than speaking in generalities or saying "everyone knows".

    Oil companies, big and small, receive depletion allowance against income, the same as coal, timber, uranium, and any kind of extractive industry. That's it.
    Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.....Milton Friedman

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    Quote Originally Posted by Monoborracho View Post
    Uh, could you please name which subsidies Big Oil (there are three big U S oil companies now) receives?

    Please be specific rather than speaking in generalities or saying "everyone knows".

    Oil companies, big and small, receive depletion allowance against income, the same as coal, timber, uranium, and any kind of extractive industry. That's it.
    Source is from 1995, but seems to be valid today. Four major areas are discussed:



    http://www.ucsusa.org/clean_vehicles/fuel_economy/subsidizing-big-oil.html



    There is growing awareness in this country that the full cost of using oil for transportation is "subsidized" -- that is, gasoline prices paid by consumers do not reflect the full economic cost to society. The true cost is hidden by myriad direct and indirect public subsidies, which include

    * reduced corporate income taxes for the oil industry

    * lower than average sales taxes on gasoline

    * government funding of programs that primarily benefit the oil industry and motorists

    * "hidden" environmental costs caused by motor vehicles, namely air, water, and noise pollution

    This hidden system of oil subsidies has created an energy policy by default -- a policy that is actually the reverse of stated national priorities.

  14. #14
    tinydr
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    on the other hand, maybe the current crop of biofuels aren't so green either?

    http://www.grist.org/news/maindish/2006/12/05/olmstead/

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    reductio ad absurdum ericy's Avatar
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    Quote Originally Posted by gerv View Post
    Source is from 1995, but seems to be valid today. Four major areas are discussed:



    http://www.ucsusa.org/clean_vehicles/fuel_economy/subsidizing-big-oil.html
    And add in the cost of the war in Iraq...

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    Quote Originally Posted by gerv View Post
    Source is from 1995, but seems to be valid today. Four major areas are discussed:
    There is growing awareness in this country that the full cost of using oil for transportation is "subsidized" -- that is, gasoline prices paid by consumers do not reflect the full economic cost to society. The true cost is hidden by myriad direct and indirect public subsidies, which include

    * reduced corporate income taxes for the oil industry

    * lower than average sales taxes on gasoline

    * government funding of programs that primarily benefit the oil industry and motorists

    * "hidden" environmental costs caused by motor vehicles, namely air, water, and noise pollution

    This hidden system of oil subsidies has created an energy policy by default -- a policy that is actually the reverse of stated national priorities.


    http://www.ucsusa.org/clean_vehicles/fuel_economy/subsidizing-big-oil.html
    This is someone's article and opinion!!!! What happened to the "BIG OIL" bashing? Give me some facts on subsidies that "Big Oil" receives.

    #1 - Oil companies (big and small) pay the same corporate tax as any other company
    #2 - Sales taxes are determined by and go to federal and state governments, not the oil company, so this is way off in the looney bin.
    #3 - What government funding are you referring to? Again, no specifics
    #4 - Hidden environmental costs????? Again, no specifics.

    By the way, most oil and natural gas is subject to a 4% to 10% excise tax (varies by state), irregardless of profitability, when it comes out of the ground.

    1995 is way in the distance from 2008, no matter how "relevant" someone's opinion seems.

    Keep bashing Big Oil, but don't forget Big Cars, Bid Medicine, Big Retailers, etc. That's how we got to where we import 60% in the first place. It would be interesting to see you name the Big Oil companies that are U S companies.

    Sorry, but you are totally lacking in facts.
    Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.....Milton Friedman

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    In the right lane gerv's Avatar
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    Quote Originally Posted by Monoborracho View Post
    This is someone's article and opinion!!!!

    Sorry, but you are totally lacking in facts.
    Your opinion?

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    In the right lane gerv's Avatar
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    Quote Originally Posted by Monoborracho View Post
    This is someone's article and opinion!!!! What happened to the "BIG OIL" bashing? Give me some facts on subsidies that "Big Oil" receives.

    #1 - Oil companies (big and small) pay the same corporate tax as any other company
    #2 - Sales taxes are determined by and go to federal and state governments, not the oil company, so this is way off in the looney bin.
    #3 - What government funding are you referring to? Again, no specifics
    #4 - Hidden environmental costs????? Again, no specifics.

    By the way, most oil and natural gas is subject to a 4% to 10% excise tax (varies by state), irregardless of profitability, when it comes out of the ground.

    1995 is way in the distance from 2008, no matter how "relevant" someone's opinion seems.

    Keep bashing Big Oil, but don't forget Big Cars, Bid Medicine, Big Retailers, etc. That's how we got to where we import 60% in the first place. It would be interesting to see you name the Big Oil companies that are U S companies.

    Sorry, but you are totally lacking in facts.
    How about 2005? Is that recent enough?

    http://www.grist.org/advice/ask/2005/08/03/umbra-oil/


    tax breaks;
    Oil and gas companies do benefit from a lower corporate income tax, and they'll reap billions in tax breaks thanks to the recently passed energy bill, but Big Oil is not alone. According to a 2004 report [PDF] from the Institute on Taxation and Economic Policy, bigger breaks from 2001 to 2003 went to the aerospace, transportation, industrial and farm equipment, telecommunications, and electronics industries. Here's some context: on a scale of corporate tax rates from 0 to 29 percent, aerospace paid a measly 1.6 percent; oil weighed in at 13.3; and -- oh, just to randomly pick one -- publishing was taxed at 23 percent.
    loans, outright subsidies:
    The government also has other tricky ways to support certain industries or people: selling construction bonds at low interest rates or tax-free; running a research-and-development program at no cost to the industry it benefits; assuming the legal risks of exploration and development in a company's stead; offering below-cost loans with cherry repayment conditions; and ancillary other tactics that overwhelm my pea brain. (As usual, you need not rely entirely on me: Earth Track is a site devoted to explaining energy-related subsidies.)

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    Item #4. There are lots of environmental costs that are caused by burning oil/gasoline. But that goes for most everything in a modern economy - the environment is considered an unlimited source and sink. You can take as much as you want from the earth and the nasty by-products will be absorbed by it. That isn't true of course, but pollution is an externality that is not paid for up front. So of course there are lots of "hidden environmental costs" that are the result of the petroleum business, from air pollution to oil spills, to many secondary effects based on using oil to power our economy.

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    reductio ad absurdum ericy's Avatar
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    Quote Originally Posted by gerv View Post
    How about 2005? Is that recent enough?

    http://www.grist.org/advice/ask/2005/08/03/umbra-oil/


    tax breaks;


    loans, outright subsidies:
    Glad you mentioned the 2005 energy bill. There is a nice enumerated list here:

    http://www.citizen.org/cmep/energy_e...s.cfm?ID=13980

    OIL & GAS SUBSIDIES: $6 BILLION

    Section 1329
    Allows “geological and geophysical” costs associated with oil exploration to be written off faster than present law, costing taxpayers over $1.266 billion from 2007-2015. The provision claims to raise $292 million from 2005-06, and cost taxpayers $1.266 billion from 2007-2015. It originated in the House (there was no such provision in the original Senate bill). Record-high oil prices should provide a sufficient incentive for oil companies like ExxonMobil to drill for more oil without this huge new tax break.

    Section 1323
    Allows owners of oil refineries to expense 50% of the costs of equipment used to increase the refinery’s capacity by at least 5%, costing taxpayers $842 million from 2006-11 (the estimate claims the provision will actually raise $436 million from 2012-15). This provision was added by the Senate. Record high prices for oil and gasoline, and record profits by refiners like ExxonMobil and Valero should provide all the incentive needed to expand refinery capacity without this huge tax break.

    Sections 1325-6
    This tax break allows natural gas companies to save $1.035 billion by depreciating their property at a much faster rate. This tax break makes no economic sense, as natural gas prices remain at record high levels, and these high prices—not tax breaks—should be all the incentive the industry needs to invest in gathering and distribution lines.

    Section 342
    Allows oil companies drilling on public land to pay taxpayers in oil rather than in cash.

    Sections 344-345
    Waives royalty payments for drilling for some natural gas in the Gulf of Mexico.

    Section 346
    Waives royalty payments for drilling in offshore Alaska.

    Sections 353-4
    Waives royalty payments for gas hydrate extraction on the Outer Continental Shelf and public land in Alaska.

    Section 383
    Allows oil companies drilling in federal land off the coast of a particular state to pay the state 44 cents of every dollar it would have paid to the federal government for the privilege of drilling on federal land.

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