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Gerry Clinchy
12-24-2009, 07:12 AM
http://www.nytimes.com/2009/12/24/business/energy-environment/24refining.html?th&emc=th
NY Times

Interesting ... conservation measures & recession have contributed to decrease in gasoline usage; which is resulting in closing more oil refineries; which is believed will result in our importing more gasoline from refineries that can do the refining more cheaply.

Uh ... I thought the idea of all this conservation & alternative fuels was to make the US more independent of importing fuels?

Is this yet another instance where beaurocratic geniuses failed to anticipate the consequences of their "plan"?

dnf777
12-24-2009, 09:02 AM
http://www.nytimes.com/2009/12/24/business/energy-environment/24refining.html?th&emc=th
NY Times

Is this yet another instance where beaurocratic geniuses failed to anticipate the consequences of their "plan"?

Oh no! Say it ain't so!

Ever since I read a book on chaos mathematic theory, I realize that large scale economies are chaotic. In retrospect, you can often see order within that chaos, but trying to prospectively predict consequences of our actions is uttery impossible!

Merry Christmas,
Dave

YardleyLabs
12-24-2009, 09:25 AM
From an environmental perspective, it is highly desirable to see reductions in consumption of both refined gasoline and unrefined oil. As that happens, prices and profits will drop and the most expensive sources will be abandoned in the short term. Obviously those receiving their profits largely through high consumption will lose as part of this process. Those selling alternative fuels and those hoping for the future of our grandchildren and great grandchildren will gain. What is unanticipated or undesirable about that?

K G
12-24-2009, 09:58 AM
From an environmental perspective, it is highly desirable to see reductions in consumption of both refined gasoline and unrefined oil. As that happens, prices and profits will drop and the most expensive sources will be abandoned in the short term. Obviously those receiving their profits largely through high consumption will lose as part of this process. Those selling alternative fuels and those hoping for the future of our grandchildren and great grandchildren will gain. What is unanticipated or undesirable about that?

That it is short-term, Jeff.

Those who forget the past are condemned to relive it regards,

kg

YardleyLabs
12-24-2009, 10:32 AM
That it is short-term, Jeff.

Those who forget the past are condemned to relive it regards,

kg
Keith,

Not sure I understand your point.

Are you saying that the reduction in consumption is short term (as I suspect) or that the decommissioning of some refineries is short term (which I also suspect)? The more expensive refineries and oil fields are not worth exploiting if prices fall below break even levels. If/when prices rise again, they will be brought back into production. Are you suggesting that declines in consumption are harmful for some reason?

road kill
12-24-2009, 10:34 AM
Keith,

Not sure I understand your point.

Are you saying that the reduction in consumption is short term (as I suspect) or that the decommissioning of some refineries is short term (which I also suspect)? The more expensive refineries and oil fields are not worth exploiting if prices fall below break even levels. If/when prices rise again, they will be brought back into production. Are you suggesting that declines in consumption are harmful for some reason?
Declines in American JOBS are harmful to America.

YardleyLabs
12-24-2009, 10:43 AM
Declines in American JOBS are harmful to America.
You don't think that alternative energy sources produce jobs?

Uncle Bill
12-24-2009, 11:39 AM
You don't think that alternative energy sources produce jobs?


Always encouraging to see that "hope & change" working for some of you leftist loonies.

How many jobs has that "industry" produced? As the EPL of this BB, I'm sure you have those figures on the tip of your tongue, or did that accidently get cut off while falling on the sword for your messiah?

UB

Gun_Dog2002
12-24-2009, 11:46 AM
You don't think that alternative energy sources produce jobs?

Not in America.

/paul

YardleyLabs
12-24-2009, 02:15 PM
Not in America.

/paul
Actually, it seems to me to be the other way around. Oil production and refining currently produce more jobs in other countries than in the US. Wind power, solar power, geothermal, etc., and the costs of extending and modernizing the power grid to support energy transmission around the country would primarily generate jobs in the US.

Gerry Clinchy
12-24-2009, 02:18 PM
You don't think that alternative energy sources produce jobs?


Undoubtedly they do ... but if the new jobs don't equal the ones lost to oil refining that goes out of the country, it is not helpful.

But just as bad is that the goal is/was to make the US more independent of outside sources for petroleum products. If we have to import more due to sending the refining somewhere else, we are actually becoming MORE dependent on outside sources for petroleum products. It will take a while before we can eliminate petroleum products from the total energy picture for the US or the rest of the world.

Would it have been worth a bit of a tax break to keep those refinery jobs in the US ... so those employed there would be able to continue to pay income taxes & all those other taxes they'd be paying; continuing to put their $ into SS and Medicare; and not drawing out $ for unemployment comp & other services they won't be able to pay for without a job?

Uncle Bill
12-24-2009, 03:35 PM
Actually, it seems to me to be the other way around. Oil production and refining currently produce more jobs in other countries than in the US.



And of course your answer to this situation is probably the same as Roger's...Bush's fault????

What will it take for you whackos on the left to just once admit to overstepping your boundries?

All you socialists in the Algore, George Soros camp, don't deserve a country as great as the USA. You won't be happy until you have turned a great nation into your own little pile of crap.

You are in for one humongous surprise Yardley, DNF, Roger, et al. Your Democrat leaders have crapped in their own mess kits, and soon they'll be forced to eat what they are trying to shove down the throats of their voters. 2010 is going to be one helluva year.

UB

blind ambition
12-24-2009, 04:05 PM
And of course your answer to this situation is probably the same as Roger's...Bush's fault????


UB

Wouldn't the closing of US refineries in favour of off shore ones be the result of decision making by EXXON et al? Isn't the goal of a functioning capital marketplace the pursuit of profit without regard to borders....why, why anything else would be SOCIALISM!

road kill
12-24-2009, 04:05 PM
Actually, it seems to me to be the other way around. Oil production and refining currently produce more jobs in other countries than in the US. Wind power, solar power, geothermal, etc., and the costs of extending and modernizing the power grid to support energy transmission around the country would primarily generate jobs in the US.

I believe we were talking about refineries shut down in the USA.
How is that good for the USA?

So someone in France can make wind mills??

Amazing........

dnf777
12-24-2009, 06:17 PM
And of course your answer to this situation is probably the same as Roger's...Bush's fault????

UB

Somebody jiggle UB's turntable. He's sounding like a stuck record. :rolleyes:

Merry Christmas!

zeus3925
12-25-2009, 02:52 PM
Well, folks, the world is changing fast. Those who adapt to change will thrive and proper. Those that don't will be left behind. Time to start dealing with the world that will be, than hanging on to the world of yester-year.

road kill
12-25-2009, 07:53 PM
Well, folks, the world is changing fast. Those who adapt to change will thrive and proper. Those that don't will be left behind. Time to start dealing with the world that will be, than hanging on to the world of yester-year.


Agreed, but I can't find any Govt. job in my field!!:D

( I wonder who will get that?)

code3retrievers
12-26-2009, 07:00 AM
http://www.nytimes.com/2009/12/24/business/energy-environment/24refining.html?th&emc=th
NY Times

Interesting ... conservation measures & recession have contributed to decrease in gasoline usage; which is resulting in closing more oil refineries; which is believed will result in our importing more gasoline from refineries that can do the refining more cheaply.

Uh ... I thought the idea of all this conservation & alternative fuels was to make the US more independent of importing fuels?

Is this yet another instance where beaurocratic geniuses failed to anticipate the consequences of their "plan"?

Here's one for you.

The environmentalists push for diesel fuel to be reformulated. Because they reduced the sulfur the fuel now has less energy then before causing the trucks burning it to use more fuel.

My truck used to get 19 miles to the gallon before the change and now manages only 15. I also have to use an additive to replace the sulfur for lubrication.

So now I burn 25% more fuel that is more expensive and have to add chemicals to my engine so as to not harm my truck. Seems to have worked great!

dnf777
12-26-2009, 08:07 AM
Here's one for you.

The environmentalists push for diesel fuel to be reformulated. Because they reduced the sulfur the fuel now has less energy then before causing the trucks burning it to use more fuel.

My truck used to get 19 miles to the gallon before the change and now manages only 15. I also have to use an additive to replace the sulfur for lubrication.

So now I burn 25% more fuel that is more expensive and have to add chemicals to my engine so as to not harm my truck. Seems to have worked great!


Maybe the answer lies in re-engineering a 70 year old design as to not need fuel-based lubrication, and continue to improve fuel efficiency. I still see alot of black smoke from diesels, indicating incomplete combustion and lack of efficiency.

Roger Perry
12-26-2009, 02:03 PM
If I am not mistaken I believe KG said on one thread that OPEC and speculators set the price of oil/gasoline. Wouldn't shutting down oil refineries in the U.S. also cause the price of gasoline to rise?

road kill
12-26-2009, 04:18 PM
If I am not mistaken I believe KG said on one thread that OPEC and speculators set the price of oil/gasoline. Wouldn't shutting down oil refineries in the U.S. also cause the price of gasoline to rise?

I don't know the answer to that RP, but I know that some USA people lost their jobs and that is not good!!

Someone tell me how that is good?

rk

Gerry Clinchy
12-26-2009, 05:27 PM
If I am not mistaken I believe KG said on one thread that OPEC and speculators set the price of oil/gasoline. Wouldn't shutting down oil refineries in the U.S. also cause the price of gasoline to rise?

Yes, Roger, that is the point I was trying to make. Would it be better to offer a tax break to the refineries to keep the jobs here at home, rather than lose the jobs?

If US oil refineries can't make enough profit to stay in business; the crude is processed elsewhere where it is cheaper to do ... for now. That costs US jobs while keeping the cost of gas down in the short term. A tax break to keep the jobs could be offset by the taxes paid by those employed people v. paying out $ for unemployment ... and re-training refinery workers to another type of employment since the refinery jobs would be gone.

In the long-term, however, we are at the mercy of those countries who are currently offering cheaper refining. What if they decide to raise their price? We would not be prepared to pick up the slack at home for a while, since you can put refineries on-line overnight.

Also, recall that when Katrina hit & knocked out the refineries in the Gulf of Mexico, the panic on that caused gas prices to rise. Fear of shortage turned out to be worse than the reality, but the fear of shortage, alone, was enough to have prices shoot up.

Roger Perry
12-26-2009, 05:47 PM
Yes, Roger, that is the point I was trying to make. Would it be better to offer a tax break to the refineries to keep the jobs here at home, rather than lose the jobs?

If US oil refineries can't make enough profit to stay in business; the crude is processed elsewhere where it is cheaper to do ... for now. That costs US jobs while keeping the cost of gas down in the short term. A tax break to keep the jobs could be offset by the taxes paid by those employed people v. paying out $ for unemployment ... and re-training refinery workers to another type of employment since the refinery jobs would be gone.

In the long-term, however, we are at the mercy of those countries who are currently offering cheaper refining. What if they decide to raise their price? We would not be prepared to pick up the slack at home for a while, since you can put refineries on-line overnight.

Also, recall that when Katrina hit & knocked out the refineries in the Gulf of Mexico, the panic on that caused gas prices to rise. Fear of shortage turned out to be worse than the reality, but the fear of shortage, alone, was enough to have prices shoot up.

Yes, I remember. A few friends from Georgia called me and said gasoline was $5.00 a gallon.

The Oil companies made huge profits each quarter.

High gas prices may have cinched American consumers’ wallets in 2007, but they loaded the coffers of the big five oil companies: BP, Chevron, Conoco Phillips, ExxonMobil, and Shell. ExxonMobil, after record high profits (http://money.canoe.ca/News/Other/2008/01/16/4776611-ap.html) in 2005 and 2006, smashed the record for highest profits ever made by a public U.S. company—previously held by Exxon—by posting a net profit of $40.6 billion in 2007.
To put these figures in perspective, Exxon’s $40.6 billion profit in 2007 is roughly equal to receiving “$30 for every person in China and $132 for every U.S. resident (http://www.usatoday.com/money/companies/earnings/2007-02-01-exxonmobil_x.htm).” Another way of looking at it is that Exxon made $77,245 per minute in 2007—that’s more money generated per minute than 70 percent of Americans earned all year (http://www.census.gov/prod/2007pubs/p60-233.pdf), according to the Census Bureau.

It costs oil companies less than $10 per barrel to extract and ship a barrel of oil. The “finding” costs to explore and develop an oil field range from $5 per barrel in the Middle East to $67 per barrel (http://www.eia.doe.gov/neic/infosheets/crudeproduction.html) off of the U.S. coast. These are production costs. So when the market price jumps due to speculators, political unrest, supply disruption, or other similar events, it is a windfall for the oil company.

With the outragous profits the oil companies are making why would we have to give them another tax break?

road kill
12-26-2009, 06:15 PM
Yes, I remember. A few friends from Georgia called me and said gasoline was $5.00 a gallon.

The Oil companies made huge profits each quarter.

High gas prices may have cinched American consumers’ wallets in 2007, but they loaded the coffers of the big five oil companies: BP, Chevron, Conoco Phillips, ExxonMobil, and Shell. ExxonMobil, after record high profits (http://money.canoe.ca/News/Other/2008/01/16/4776611-ap.html) in 2005 and 2006, smashed the record for highest profits ever made by a public U.S. company—previously held by Exxon—by posting a net profit of $40.6 billion in 2007.
To put these figures in perspective, Exxon’s $40.6 billion profit in 2007 is roughly equal to receiving “$30 for every person in China and $132 for every U.S. resident (http://www.usatoday.com/money/companies/earnings/2007-02-01-exxonmobil_x.htm).” Another way of looking at it is that Exxon made $77,245 per minute in 2007—that’s more money generated per minute than 70 percent of Americans earned all year (http://www.census.gov/prod/2007pubs/p60-233.pdf), according to the Census Bureau.

It costs oil companies less than $10 per barrel to extract and ship a barrel of oil. The “finding” costs to explore and develop an oil field range from $5 per barrel in the Middle East to $67 per barrel (http://www.eia.doe.gov/neic/infosheets/crudeproduction.html) off of the U.S. coast. These are production costs. So when the market price jumps due to speculators, political unrest, supply disruption, or other similar events, it is a windfall for the oil company.

With the outragous profits the oil companies are making why would we have to give them another tax break?

Don't worry, I am sure there is a bill being drafted right now for the Fed's to "reform" the oil industry!!:shock:


rk

Roger Perry
12-26-2009, 06:26 PM
Don't worry, I am sure there is a bill being drafted right now for the Fed's to "reform" the oil industry!!:shock:


rk


Getting a bit defensive aren't you? I did not even mention any names. Just record profits.

road kill
12-26-2009, 06:49 PM
Getting a bit defensive aren't you? I did not even mention any names. Just record profits.
Not defensive...sarcastic yes!!

Your party is the one always telling us about how much gas cost in France.

Roger Perry
12-26-2009, 07:09 PM
Not defensive...sarcastic yes!!

Your party is the one always telling us about how much gas cost in France.

If I am not mistaken, I can remember conversations on RTF about gas prices and cutting down on going to hunt tests and field trials. Correct me if I am wrong. And I also believe most on this forum are republicans. Correct me if I am wrong there also.

By the way, I am a registered independent. So I do not know of which party you speak.

road kill
12-26-2009, 07:11 PM
If I am not mistaken, I can remember conversations on RTF about gas prices and cutting down on going to hunt tests and field trials. Correct me if I am wrong. And I also believe most on this forum are republicans. Correct me if I am wrong there also.

I do not know the party affiliations of most here.

I never missed a hunt test because of the cost of gas in France!!:shock:

When your party raise my taxes, I just raise the cost of my services to my clients!!



rk

Roger Perry
12-26-2009, 07:15 PM
I do not know the party affiliations of most here.

I never missed a hunt test because of the cost of gas in France!!:shock:

When your party raise my taxes, I just raise the cost of my services to my clients!!



rk

Then you must have put a lot of people out of business between 2006 & 2008.

Again I am a registered independent not a republican nor a democratl

K G
12-26-2009, 07:41 PM
If I am not mistaken I believe KG said on one thread that OPEC and speculators set the price of oil/gasoline. Wouldn't shutting down oil refineries in the U.S. also cause the price of gasoline to rise?

No, Roger, it won't...it will cause the companies that own those refineries to incur less expense and therefore make more profit.

Why won't the current administration work toward lessening our dependence on fossil fuels? The price of gas affects ALL of us EVERY DAY....is our current leadership so myopic that they can only work on one major campaign promise at a time?

CURRENT administration, Roger...CURRENT....stay focused....

kg

Roger Perry
12-26-2009, 07:48 PM
No, Roger, it won't...it will cause the companies that own those refineries to incur less expense and therefore make more profit.

Why won't the current administration work toward lessening our dependence on fossil fuels? The price of gas affects ALL of us EVERY DAY....is our current leadership so myopic that they can only work on one major campaign promise at a time?

CURRENT administration, Roger...CURRENT....stay focused....

kg

I don't recall gasoline selling for $5.00 per gallon in the past year have you?

K G
12-26-2009, 07:54 PM
I don't recall gasoline selling for $5.00 per gallon in the past year have you?

If you think that's to the credit of the current administration, I have some swamp land in Arizona I'd like for you to get top dollar for....:p ......so, unless gas is $5 a gallon we don't have a problem?

kg

Roger Perry
12-26-2009, 07:55 PM
I do not know the party affiliations of most here.

I never missed a hunt test because of the cost of gas in France!!:shock:

When your party raise my taxes, I just raise the cost of my services to my clients!!



rk

The only hunt test that I have run recently (except once in Orlando 2 hours drive) is the Treasure Coast Retriever Club. The closest field trial for me (except TCRC's first DQ) is the Jacksonville trial at 3 hours and almost 6 hours to the Thomasville Ga. area.

Roger Perry
12-26-2009, 07:57 PM
If you think that's to the credit of the current administration, I have some swamp land in Arizona I'd like for you to get top dollar for....:p ......so, unless gas is $5 a gallon we don't have a problem?

kg

No, I never gave credit to the current administration for the price of gas. it is what it is.

YardleyLabs
12-26-2009, 07:57 PM
If you think that's to the credit of the current administration, I have some swamp land in Arizona I'd like for you to get top dollar for....:p ......so, unless gas is $5 a gallon we don't have a problem?

kg
Given that the drop in production is primarily a result of the recession, I would agree that the present administration had nothing to do with it.:rolleyes:

K G
12-26-2009, 08:06 PM
No, I never gave credit to the current administration for the price of gas. it is what it is.

If "it is what it is," then you didn't mind paying $5 for it when Bush 43 was in charge either, correct?:wink:


Given that the drop in production is primarily a result of the recession, I would agree that the present administration had nothing to do with it.:rolleyes:

The point is that NO administration has ANY control over the price of gas UNLESS they control the supply and production...we're not interested in further exploration or development of oil in places we have access to...and as soon as there is an "incident" in the middle east or that demagogue in Venezuela decides to nationalize any US company's interests there, gas will be $5 a gallon again...because we are doing NOTHING to lessen our dependence on what they produce.

Sounds like you're good with that, Jeff...you and Roger both....:rolleyes:

kg

K G
12-26-2009, 08:55 PM
That's funny...I was more concerned about the spelling of demagogue....:D

Good catch!

kg

Gerry Clinchy
12-27-2009, 07:29 AM
Exxon’s $40.6 billion profit in 2007 is roughly equal to receiving “$30 for every person in China and $132 for every U.S. resident (http://www.usatoday.com/money/companies/earnings/2007-02-01-exxonmobil_x.htm).” Another way of looking at it is that Exxon made $77,245 per minute in 2007—that’s more money generated per minute than 70 percent of Americans earned all year (http://www.census.gov/prod/2007pubs/p60-233.pdf), according to the Census Bureau.

In perspective ... it would take 10 X $40.6 billion to pay for 5 years of the new health coverage proposals? Or, if there are 10 U.S. oil companies making such profits, it would take all of their profits to be directed to the health care proposals.


Exxon made $77,245 per minute in 2007—that’s more money generated per minute than 70 percent of Americans earned all year (http://www.census.gov/prod/2007pubs/p60-233.pdf), according to the Census Bureau.

Whew! Anybody want to do the math on how much the new health care proposals will cost on a per minute basis? I'm glad you called our attention to these numbers, Roger.


The “finding” costs to explore and develop an oil field range from $5 per barrel in the Middle East to $67 per barrel (http://www.eia.doe.gov/neic/infosheets/crudeproduction.html) off of the U.S. coast.

As long as we are dependent on petroleum products, that is the price we pay. And this may demonstrate why have become so dependent on Mid-East oil rather than our own.

I do believe that the oil companies pay a lot of taxes on that income as well? Or am I wrong on that? I'm sure there are plenty of "deductions" on their tax returns, but at the bottom line, do they pay taxes or just get refunds?


So when the market price jumps due to speculators, political unrest, supply disruption, or other similar events, it is a windfall for the oil company.


Wasn't there a "windfall" tax imposed on the oil companies as well? Builders did the same thing during the housing boom. Now when the large builders have fallen on hard times, tax breaks for them have been proposed (though not for the "small" builders).

If the oil companies were manipulating the "speculators", then it would appear there would be reason for prosecution. OTOH, if the speculators are acting independently, isn't that the way the free market operates?

I believe that the article mentioned that some of the refineries are owned by oil companies, but not all.

K G
12-27-2009, 07:40 AM
Great post, Gerry....but making "sense" of "cents" has never been of much interest to Roger....;-) .....whatever is "wrong" was/is/shall always be Bush 43's fault....

kg

YardleyLabs
12-27-2009, 10:04 AM
I actually don't believe in corporate income taxes for anyone, but do not understand why oil companies receive tax incentives not enjoyed by other industries. I also do not understand why oil companies are allowed to get away with not paying required royalites on oil taken from public lands. Why should the taxpayer be giving that oil to oil companies for less than market value especially when much of that oil is then sold overseas.

dnf777
12-27-2009, 11:28 AM
Great post, Gerry....but making "sense" of "cents" has never been of much interest to Roger....;-) .....whatever is "wrong" was/is/shall always be Bush 43's fault....

kg

Bump your turntable. You're record is stuck!

K G
12-27-2009, 01:04 PM
MY turntable is not the issue....;-)

kg

Gerry Clinchy
12-27-2009, 02:34 PM
I actually don't believe in corporate income taxes for anyone, but do not understand why oil companies receive tax incentives not enjoyed by other industries. I also do not understand why oil companies are allowed to get away with not paying required royalites on oil taken from public lands. Why should the taxpayer be giving that oil to oil companies for less than market value especially when much of that oil is then sold overseas.

Would oil be the only natural resource from govt lands receiving this kind of "break"? Good point you make on this, Jeff. As I recall, Alaskans get a check each year from oil royalties.

Are there not R&D allowances for other industries in the tax code?

As Mr. Reid drew our attention to ... if our legislators aren't bringing home the bacon to our own states' industries, we should be calling them to task. I'd be more than willing to settle for all of them actually trying to spend govt funds efficiently, effectively and responsibly, not just being power brokers buying votes for perpetuating their own careers. That is absolutely a non-partisan statement!!

YardleyLabs
12-27-2009, 03:50 PM
Would oil be the only natural resource from govt lands receiving this kind of "break"? Good point you make on this, Jeff. As I recall, Alaskans get a check each year from oil royalties.

Are there not R&D allowances for other industries in the tax code?

As Mr. Reid drew our attention to ... if our legislators aren't bringing home the bacon to our own states' industries, we should be calling them to task. I'd be more than willing to settle for all of them actually trying to spend govt funds efficiently, effectively and responsibly, not just being power brokers buying votes for perpetuating their own careers. That is absolutely a non-partisan statement!!
The principle tax benefits provided for oil companies over and above tax breaks provided to other businesses are the oil depletion allowance and the intangible drilling cost allowances. These allow oil companies to deduct a substantial portion of gross revenues before calculating profits for tax purposes. Interestingly, oil companies have lobbied hard to oppose tax breaks for alternative energy resources, decrying the distortion of "tax subsidies." However, the tax breaks provided to those industries are lower than those provided for oil.

I'm not sure what other kinds of sweetheart deals are provided to those profiting from the use of public lands. In other countries, lease payments to the government for exploitation of publicly owned resources is normal. Here the royalty payments owed have often been reduced, deferred or wived largely as political favors.

Marvin S
12-27-2009, 07:00 PM
How did a thread on oil refining turn into a dissertation on depletion allowances? The only one getting the depletion allowance is they who own the rights to produce. The original reason was a reward for the huge risk indidivuals were taking when the laws were placed on the books.

The depletion allowance is one reason gold mining is so popular among those lions of investment, your friendly MD. :-P :-P

When I was last involved that allowance could go as high as 27% of gross revenues but no higher than 50% of net profits.

My question - if the Depletion allowance is so lucrative, Why don't OIl production stocks pay a higher dividend?

YardleyLabs
12-27-2009, 07:04 PM
How did a thread on oil refining turn into a dissertation on depletion allowances? The only one getting the depletion allowance is they who own the rights to produce. The original reason was a reward for the huge risk indidivuals were taking when the laws were placed on the books.

The depletion allowance is one reason gold mining is so popular among those lions of investment, your friendly MD. :-P :-P

When I was last involved that allowance could go as high as 27% of gross revenues but no higher than 50% of net profits.

My question - if the Depletion allowance is so lucrative, Why don't OIl production stocks pay a higher dividend?
The depletion allowance was replaced with the intangible drilling cost allowance for the large companies. That is sometimes worth more than the depletion allowance. As I noted in my original post, I actually oppose all corporation income taxes. However, I see no reason why oil companies would receive any tax benefits beyond those provided to other companies. Let them simply pay 35% on their profits along with everyone else.

Marvin S
12-28-2009, 04:48 PM
The depletion allowance was replaced with the intangible drilling cost allowance for the large companies. That is sometimes worth more than the depletion allowance. As I noted in my original post, I actually oppose all corporation income taxes. However, I see no reason why oil companies would receive any tax benefits beyond those provided to other companies. Let them simply pay 35% on their profits along with everyone else.

Large is how big?

REIT's pay no Income Tax - their shareholders do! :cool: ;) Maybe that would work for all of us, rather than double taxation. :confused:

Please explain to me how sentence 3 & sentence 5 in your post match.

Uncle Bill
12-28-2009, 05:18 PM
Large is how big?

REIT's pay no Income Tax - their shareholders do! :cool: ;) Maybe that would work for all of us, rather than double taxation. :confused:

Please explain to me how sentence 3 & sentence 5 in your post match.


Dayum, Marvin, you are asking a lot of a lefty...even if he's the EPL of RTF.:razz:

UB

YardleyLabs
12-28-2009, 06:01 PM
Large is how big?

REIT's pay no Income Tax - their shareholders do! :cool: ;) Maybe that would work for all of us, rather than double taxation. :confused:

Please explain to me how sentence 3 & sentence 5 in your post match.
I believe that all Corporate income taxes should be replaced by personal income taxes and that all income should be treated identically regardless of source: income from wages, income from investments, income from inheritance, welfare payments, etc., etc. Corporate income tax and the efforts to avoid paying it results in distorted investments and corporate strategies to move profits from one form of income to another that is taxed less. The income tax on corporate taxes distributed as dividends approaches confiscatory levels with personal income tax rates on top of corporate income tax rates resulting in about 60% of profits going to government. That, of course, was the rationale for giving dividends tax preference. However, that simply creates more economic distortion. Solve the problem completely by eliminating corporate taxation. To do this would be a radical shift in the nation's tax policy. Until we are prepared to deal with that then we should at least treat different businesses equitably, meaning a single tax rate on all business profits and no permanent preferences for any industry.

Estimates of the cost of tax preferences for the oil industry range around $2-3 billion/year. The absence of REIT taxation is based on the fact that REITs are generally structured as partnerships. That carries with it potential tax surprises for the unwary.

Marvin S
12-29-2009, 06:55 PM
The absence of REIT taxation is based on the fact that REITs are generally structured as partnerships. That carries with it potential tax surprises for the unwary.

Guess I'm missing something - the REIT's we have tanked with the economic downturn :cool: - which made us buy more ;-). Just what tax surprises could we expect? Other than - 0 income = 0 taxable, which raises the deficit :o

YardleyLabs
12-29-2009, 07:16 PM
Guess I'm missing something - the REIT's we have tanked with the economic downturn :cool: - which made us buy more ;-). Just what tax surprises could we expect? Other than - 0 income = 0 taxable, which raises the deficit :o
I haven't gone anywhere near REITs for decades. However, I know a lot of investors who were surprised by non-deductible expenses (e.g. M&E costs related to marketing) and by taxes on properties that had been fully depreciated and then sold (especially an issue for people buying in late).

moscowitz
12-29-2009, 07:56 PM
I recently read that the Arab countries are the biggest contributors to environmental organizations that lobby in Washington to prevent development in this country of our natural resources. Interesting???


And remember Clinton sold this country to China and now we have Gore who is out to make billions in the name of the environment. It's funny become a senator or congressman and you become a millionaire. They have exempted themselves from the health bill?? interesting??

zeus3925
12-29-2009, 08:11 PM
I recently read that the Arab countries are the biggest contributors to environmental organizations that lobby in Washington to prevent development in this country of our natural resources. Interesting???



That is complete Bull Roar!!

Marvin S
12-30-2009, 10:34 AM
I haven't gone anywhere near REITs for decades. However, I know a lot of investors who were surprised by non-deductible expenses (e.g. M&E costs related to marketing) and by taxes on properties that had been fully depreciated and then sold (especially an issue for people buying in late).

You might want to stay current - the Exchange listed REIT's don't operate that way & can be very lucrative income wise when the market is hot. I consider REIT's a necessary part of a well rounded portfolio. What you describe sounds like some drilling partnerships we were involved in a few decades back. Now, back to refineries!!! ;-) What's not to like about TSO & VLO?