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Do oil companies pay their fair share?
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mrgybe



Joined: 01 Jul 2008
Posts: 2827

PostPosted: Mon Apr 09, 2012 10:59 pm    Post subject: Reply with quote

coboardhead wrote:
I had asked the question of why natural gas was not being used more as a transportation fuel and received the following respsonse from Mac...

"The basic answers to why no more use of natural gas in transportation is infrastructure, inertia, and lobbying by the oil companies."

Now, you stated this was untrue and Mac did not know what he was talking about. Apparently, XOM is not interested in transportation use of their natural gas reserves and is not interested in promoting this use of natural gas. Could it be that they have a good thing going and do not want to change course (inertia). And, others in the petroleum industry (Koch Bros. for one) have lobbied[/u] against the continuation of the tax credits I had been discussing.

Infrastructure costs should be apparent to all. So, where was Mac wrong?

You stated that you would rather see natural gas promoted over solar (which started this discussion of natural gas) I assumed you knew that the Obama Administration had been offering tax credits to natural gas suppliers and consumers as part of the stimulus package. And, since you diss Obama's energy policy on a regular basis, I assumed you were also aware of the ongoing battle in Congress over the continuation of those incentives.

I really would like to understand the pitfalls of conversion of at least part of our transportation fuel use to natural gas.

You may wish to read my posts a little more closely before commenting. I specifically stated that comments as they relate to oil companies were untrue. They are. The oil and gas industry is going full speed to develop and market natural gas.......it has not lobbied against increased use of natural gas; to do so would be absurd given the huge investments they have made. Koch Industries, lobbied against subsidies for natural gas. They have a philosophical disagreement with government intervention in private enterprise ("picking winners and losers"). That is entirely different to lobbying against the expanded use of natural gas which is a significant part of their business.

With regard to transportation, where do you think the electricity will come from to power all those electric cars of the future? Power stations which XOM wants to convert to natural gas. I mentioned only XOM, which is withdrawing from the retail service station side of the business, so your speculation as to their motives is way off the mark. Other companies are ramping up gas retailing. Chesapeake Energy, which is one of the largest natural gas producers is actively pursuing a CNG retail program for cars. However, there are significant safety and conversion issues to overcome before any large scale marketing can take place.

So, I repeat, any suggestion that the oil and gas industry is lobbying to stall an increase in the use of natural gas is completely absurd. That's where the growth will come from for most of the industry for the next several decades. They have made massive investments in natural gas and want to sell all they can. They are finding and producing it faster than they can find applications for it, that's why the price has plummeted.
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boggsman1



Joined: 24 Jun 2002
Posts: 3703
Location: at a computer

PostPosted: Tue Apr 10, 2012 8:37 am    Post subject: Reply with quote

Congrats Americans...Apple just hit $600 B in cap! Just a little perspective....Exxon is $395B, a mere $205 B behind....and Apple is bigger than the entire retail industry, thats right add all the retail stocks together including Walmart, Costco, etc. , and they dont equal Apple. Incredible! And they will also earn more than Exxon this year, if one thinks the cap is just hype.
Mr G. I dont fault you one bit for defending the oil patch with all your heart, I do the same thing with Wall Street. Its the nature of our survival instincts. No matter how heinous, how unpopular, how outdated....we still need the industries to exist.
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mrgybe



Joined: 01 Jul 2008
Posts: 2827

PostPosted: Tue Apr 10, 2012 9:43 am    Post subject: Reply with quote

Straightening out the incessant and ignorant accusations coming from someone who clearly has a huge chip on his shoulder about the oil and gas business is not heinous.......it's education. Apple's rise is astonishing, and it's rate of ascent would normally worry me........but its P/E is dropping so hard to argue there is "irrational exuberance". Free enterprise at work. Time for a windfall profits tax?
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boggsman1



Joined: 24 Jun 2002
Posts: 3703
Location: at a computer

PostPosted: Tue Apr 10, 2012 9:59 am    Post subject: Reply with quote

mrgybe wrote:
Straightening out the incessant and ignorant accusations coming from someone who clearly has a huge chip on his shoulder about the oil and gas business is not heinous.......it's education. Apple's rise is astonishing, and it's rate of ascent would normally worry me........but its P/E is dropping so hard to argue there is "irrational exuberance". Free enterprise at work. Time for a windfall profits tax?

No windfall profits tax, Mr. Gybe. Let me educate you on capitalism a little. If one does not want to spend $400 for a phone, or $800 for a tablet, or .99c for a song, he or she has options. He could buy a $19 Droid phone, or a $299 tablet, or get free music on Pandora. On the other hand, if one does not want to spend 4.50 for premium, in spite of retail gas demand being at 1997 lows, he or she has only a few options. #1-Ride the bus-yuck,#2- ride your bike-tough when you're obese(30% of all Americans), or walk-see #2. So, I doubt you will see a move to tax Apple, its just a little consumer products company with tons of competitors with MUCH cheaper alternatives.
But, bottom line, I dont really think a windfall profits tax makes sense in any situation.
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mrgybe



Joined: 01 Jul 2008
Posts: 2827

PostPosted: Tue Apr 10, 2012 10:27 am    Post subject: Reply with quote

Obviously my tongue was firmly in my cheek. If you take a risk and invest in a product that ultimately doubles, triples, quadruples in price, good for you. Doesn't matter whether it's iphones or crude oil.
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pueno



Joined: 03 Mar 2007
Posts: 2742

PostPosted: Tue Apr 10, 2012 10:28 am    Post subject: Reply with quote

boggsman1 wrote:
...or get free music on Pandora.

Try Radiotuna.

Better than Pandora and only twice the price.
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mac



Joined: 07 Mar 1999
Posts: 5475

PostPosted: Wed Apr 11, 2012 4:33 pm    Post subject: Reply with quote

Mrgybe, striving for friends on the forum, calls me a liar (again) and claims that no oil companies have lobbied against development of natural gas for transportation. He further dismisses the Koch brothers as irrelevant. He has missed, or ignored from the start, my main point which is that all of the carbon-based energy companies, including the oil companies behave in ways that earn them enemies, undermine their credibility, and increase their risk. The starting point was the litigious approach of Chevron over valuation of their Richmond refinery. But the patern we see in Richmond is repeated, again and again, by all of the majors, including Exxon.

For Chevron in Richmond, the issue since they surfaced plans to expand their refinery, was the impact on air quality and the transparency of what Chevron said about the feed stock. Locals know that Chevron changed their approach, and it was the hard ball approach that they adopted that elected a mayor from the Green Party. When Chevron lost a law suit on the adequacy of their EIR they did not remedy the flaws in transparency that the court found. Rather, they went to the legislature and sought an exemption from the law requiring them to do an EIR. Mrgybe's idle threats to sell off the refinery, and paranoia about local politicians are simply a failure to recognize that Chevron has systematically alienated its political base over the last 15 years.

California has been working on cleaner fuels, for air quality reasons, for over 40 years. That experience began well before concerns about warming, and California has broad experience with subsidies for CNG and a West Coast approach on clean fuels and carbon reduction. The climate change policies were proposed by a moderate Republican governor and enacted by the legislature, and include a carbon reduction strategy using cap and trade. Cap and trade was, of course, pioneered in California, but was adopted by the first Bush for controlling acid rain see http://www.smithsonianmag.com/science-nature/Presence-of-Mind-Blue-Sky-Thinking.html. While mrgybe may be correct that Exxon has not directly lobbied against natural gas, per se, that is a rather tortured definition of terms. The united position of big carbon, with coal in the lead and oil helping to fund, is that we should not subsidize any form of energy, but let the market do its magic. Magical thinking and half-truths then come into the picture, with apologists attacking subsidies for alternative energy forms and arguing that measures which benefit the carbon side are not subsidies, but simply the same advantages that all businesses have in depreciating goods. The debate goes on, with Obama identifying $4 billion in subsidies that should be eliminated, the American Petroleum Institute claiming that there are none, and some putting the subsidies as high as $41 billion/year. http://www.csmonitor.com/USA/Politics/2011/0309/Budget-hawks-Does-US-need-to-give-gas-and-oil-companies-41-billion-a-year. By credible estimates, renewal energy has gotten more funding than oil since Obama took office, with estimates of subsidies for all renewables about $6.2 billion and those for non-renewables (coal, oil and nuclear) $7.4 billion according to a Texas study http://www.window.state.tx.us/specialrpt/energy/subsidies/ Of course these estimates do not include either the health costs of gasoline and diesel emissions or the portion of the military budget that goes to securing the oil supply, arguably subsidies of much greater magnitude.

Big oil was also behind the effort in California to roll back the climate change bill, overwhelmingly defeated by the voters. To be sure, in California’s cap and trade system, natural gas is going to have some economic advantages over oil, while not replacing it by any means as the base of transportation.

So reviewing the bidding, the oil companies have argued, selectively, against removing subsidies that they enjoy, while eliminating similar subsidies for renewable energy. They have tried to roll back California’s efforts at emission reduction plans, and have fought in general terms California’s efforts to encourage cleaner fuels, including CNG. I don’t blame them for doing so, they know oil, it makes a lot of money for them, and nobody willingly gives up market share. But to call this not lobbying is strange reasoning indeed.

While Exxon’s direct role in lobbying might not be highly visible, and Koch may be minor players in the total oil supply picture, the political picture is quite different. The Koch’s and the web of libertarian groups that they fund are the spear tip of corporate efforts to dismantle environmental protections. And Exxon is there at the table with them. The libertarian group that does the dirtiest work for the Koch’s, and Exxon, is the American Legislative Exchange Council (ALEC). Randall Smith of Exxon is on the Board of ALEC. Chevron belongs and contributes. ALEC has developed model legislation for privatizing public education, eliminating unions, making life easier for energy companies, and rolling back the public health protections in environmental laws. To see what ALEC actually lobbies for, including developing model bills, look here: http://alecexposed.org/wiki/Bills_Affecting_our_Water,_Air,_%26_Land#Energy

The claim that Exxon does not fund lobbying efforts doesn’t quite ring true—unless you redefine lobbying in some torturous ways. According to Source Watch, “Exxon-Mobil funded 29 climate change denial groups in 2004 alone. Since 1990, the report says, the company has spent more than $19 million funding groups that promote their views through publications and Web sites that are not peer reviewed by the scientific community.”

As the New Yorker article states, that support became visible, and
Quote:
In October 2006, two US Senators, Olympia Snowe, (R-Maine), and Jay Rockefeller, (D-W.Va.) wrote to ExxonMobil's chairman and CEO Rex Tillerson, asking that it "end any further financial assistance" to groups "whose public advocacy has contributed to the small but unfortunately effective climate change denial myth." The Senators singled out the Competitive Enterprise Institute and TechCentralStation as such groups. They wrote that "we are convinced that ExxonMobil's long-standing support of a small cadre of global climate change skeptics, and those skeptics' access to and influence on government policymakers, have made it increasingly difficult for the United States to demonstrate the moral clarity it needs across all facets of its diplomacy".


Exxon deserves respect for delivering oil-based products that drive our economy, and for seeing that the future energy supplies will increasingly be based on natural gas. But instead of trying to also set models for compliance with laws such as the Clean Air Act and the Coastal Management Act, or even on matters as mundane as local property taxes in Richmond, the big oil companies spend an enormous amount of time and political capital trying to change those laws to their economic advantage. Most call this lobbying. When they are successful they make out like bandits—Chevron pays a pittance for renting State Land for their oil terminals in Richmond and El Segundo. But nobody who ever worked in the energy business should be surprised that it has cost them trust. When things reach the point where a moderate Republican Senator rebukes them publicly for what they should have figured out on their own, you can readily see the problem. Exxon doesn’t have to mandate their executives to contribute primarily to Republicans. It hires people who are conservative, and sends a steady message about who their friends and enemies are. But what senior managers, even those who are retired, don’t realize is that they now have the “man in the gray flannel suit” problem, they all think too much alike.
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