To "SG in SLC" and if you look at those tax breaks that they receive, it
is no different than for anybody else. What that NYT article forgets to mention
is the simple fact that in addition to taxes paid for equipment investment the
oil companies pay another 16% of the value of the oil they find in royalties,
plus they pay the government lots of money for land leases. The 9%
paid on capital investment is actually good, because for many industries they
can write off 100% of the lease costs on their taxes or else they can get large
tax breaks for buying equipment.Another thing that was omitted is
the simple fact that by the time the oil get out of the ground and into your
car, the oil company has made less than 10% profits. In comparison, Ford has a
13% profit margin, Apple Computers runs a 23% profit margin.So, what
is the problem with oil? They pay high taxes, royalties, and leases.To "LDS Liberal" Texas is in a huge drought, that is cutting the water
supplies. 80% of the water used in Fracking is recycled.
Gotta love it.Food is being used for fuel, Water is being used
for fracking [fuel].(read today that wells for drinking water in towns in
Texas are running dry due to fracking).So- Conservative
Americans would rather give up their food AND water, than their
gas-guzzling trucks and SUVs.Pathetic.
@ SG,Congress legislates, even when the State is Iowa. Congress,
not any special interest group, writes the laws. You make it sound like
Congress is just a puppet for a special interest group. Is that your argument?
Is Congress just a puppet for same-sex advocates? Is Congress just a puppet for
Obama's favorite union? Is Congress to blame or is a bunch of farmers to
blame for the legislation? Please show us which farmer submitted a bill to
Congress that was passed by Congress and then signed by the President. You claim that because the oil leases are not taxed high enough that the
federal government is "subsidizing" those companies. Why should the
federal government tax those leases at all? The government charges each of us a
federal tax on each gallon of fuel that we buy. Why do you think that the
government should also tax the extraction of oil from the ground? Do they tax
other companies just for the right to do business in America or do they tax
companies on their profits?
@ Mike Richards & Redshirt1701Your argument against
mcdugall's point is either simplistic or disingenuous.No,
farmers don't write legislation (unless they are elected to Congress), but
they wield a disproportionate amount of influence via the Iowa Caucus, and via
pressure from the congressional delegations and agribusinesses of Iowa, Kansas,
Nebraska, and corn-growing districts in other states to "take the
pledge" and support subsidies for corn ethanol fuel production.With regard to petroleum industry subsidies, the following are from the New
York Times (July 3, 2010):"An examination of the American tax
code indicates that oil production is among the most heavily subsidized
businesses, with tax breaks available at virtually every stage of the
exploration and extraction process.""Oil field leases and
drilling equipment are taxed at an effective rate of 9 percent, significantly
lower than the overall rate of 25 percent for businesses in general and lower
than virtually any other industry.""For many small and
midsize oil companies, the tax on capital investments is so low that it is more
than eliminated by various credits. These companies’ returns on those
investments are often higher after taxes than before."
The one consequence of using ethanol for fuel not addressed in this article is
the extreme impact on food availability and price. Where corn (maize)is the
major source crop, the diversion of this crop from food to fuel has had an
enormous impact on price and availability of this staple crop, particularly in
poorer areas. Because US-grown corn is an essential staple in much of the world,
diversion of these crops impacts those who are least able to adjust. Look back
on the back-page headlines about food riots in Mexico and elsewhere for
evidence, but the advocates of political appearance over meaningful action will
not admit it.
@airnaut, the price for gasoline in Germany (and the rest of Europe) is $7 a
gallon because of high European taxes on refined oil products, not because WE
have a government subsidy on oil in the United States. The tax structure in
Europe has moved most refining operations to other countries, especially the
To "Baron Scarpia" and "airnaut" what subsidies do the oil
companies get? Right now they are some of the largest corporate tax payers. In
addition to all of the corporate taxes they also pay massive royalties to the
Federal Government along with state and local governments. Any tax break they
get right now is not much different than what a person gets for opening a
McDonalds restaurant.So tell us, what subsidies do oil companies
get?If we are going to make this equal, lets strip the subsides to
the farmers who grow the corn and srip the subsidies from the ethanol
producers.To "micawber" there was a study put out there a
few years ago showing that over its lifetime, dust to dust, a Jeep Wrangler was
more environmentally friendly than a Prius.
@mcdugall,Sorry, but I disagree. Those farmers cannot write
legislation. Those farmers cannot sign legislation. Those farmers cannot see
that signed legislation is acted upon. All they can do is to suggest something.
Everyday in America, Congress received thousands of requests from
citizens for assistance. Congress acts on a very small number of requests.
Congress writes the law. The President enforces the law. Farmers do neither.
They are no more responsible for what the Federal Government does than you or I.
Passing the "blame" on someone other than Congress is often
done, but it is just another way that people use to vilify those whose ideas are
different than their own. If you have a problem with ethanol being
required, the persons to contact is your Representative and your Senators. They
are the only people who can write legislation.
@Mike Richards. The government was not the one who came up with the ethanol
idea, it was Big Agra in the Mid-West who pushed ethanol. The Government was the
tool to solidify a private industry business plan that was not going to succeed
without government involvement. Private Industry and the Government share equal
@CGI have never heard that about fuel-cell cars. Some have said that
hybrid vehicles have a negative environmental impact. But I think the evidence
is pretty clear now that, on balance, hybrid cars are much better for the
environment than conventional cars.
Please list the subsidies that the Federal Government is giving to "big
oil". It would be interesting to compare those "subsidies" with the
subsidies paid to farmers, to defense contractors, to solar energy companies, to
windmill manufacturers and to unions to save their pensions.
I've heard that the negative environmental impact of producing fuel-cell
cars is much greater than standard gasoline-powered cars.
The Germans and Japanese build cars getting 50+ mpg, because gasoline is
over $7 a gallon there.Americans drive trucks and SUVs that get 12
mpg -- 4 times as much to do the same task.We could have 4 times the
amount of fuel needed to live our lives today, IF Americans paid the
honest Global market price for gasoline -- and NOT the Oil Company's
Government subsidized price.Drop the Oil Company subsides, and let
the free market drive more fuel efficient vehicles.BTW - Alternative
energy vehicles will become more and more cost competitive if Big Oil
wasn't getting subsidized.
The Deseret News pointed out the problem with using ethanol. Any
time the government decides what is best for America, the people suffer.
Farmers who once produced food for human consumption took advantage of
government credits to produce crops for fuel. Food prices went up. Gas prices
went up. Less money was available for travel. The government lost billions in
fuel taxes because people bought less fuel. Only the farmer received a
temporary benefit. If the market were allowed to work without
government interference, alternatives to gas would come to the market and
everyone would benefit.If the "know-it-alls" in government
were fired, the cost of government would decrease and America would benefit.
The Deseret News is to be commended on recognizing their awareness in the
fallacies of the ethanol dream. It is past time that congress also recognize
that what was done a few years ago by requiring that at least 10% ethanol be
used in our gasoline was wrong, and repeal the law including requirements for
subsidies on the production of ethanol for fuel.Present evidence
shows that the ethanol move was not in the best interests of the taxpayers or
the country as a whole.
The two most promising technologies today are lower-cost natural gas and
electricity (for electric vehicles). The problem with these fuels, however, is
that you can't use today's existing combustion engines to run natural
gas and electricity, and it will take time for drivers to adopt natural gas or
electric vehicles in mass. Clearly, both government and private businesses need
to develop strategies for encouraging adoption of alternative vehicles,
including the expansion of natural gas and plug-in infrastructure and building
confidence for people to spend money on new technology.The subsidies
for ethanol needs to be seen in context of the more massive subsidies we throw
at oil -- from our various wars in the Mideast to "protect" our oil
access to the ongoing military efforts to guard oil fields and military ships to
escort oil tankers our of the Persian Gulf to protect those oil lanes from
pirates and terrorists. In essence, our military budget is largely a subsidy
for our addiction to oil, but it is rarely considered as such.The
benefit of ethanol, along with wind and solar, is that we don't have to
fight for it overseas.
I think ethanol may one day prove viable. But not from corn (which is where we
get it now). The economics of corn-based ethanol are stark. You can reference
lots of studies but the math changes only nominally - you get out about as much
energy as you put in once you account for all contributions.That
said, nice to see the editorial board endorse the concept that "the world
will have to make the transition from fossil fuels to something more
sustainable. That's why we welcome efforts, both public and private, to
develop the energy sources of the future."An endorsement of the
need to (eventually) move away from fossil fuels and an acknowledgement that
public and private efforts can bear fruit here. Nice.