Big Oil Subsides

[joe bloe]

Originally Posted by TexasBrowning

If the so called US government takes away these "SO CALLED" tax breaks to
oil company's that drill our nations supply of fuel...you think 4.00 a gallon is
expensive? Just wait the prices will slowly slowly rise to unprecidented highs
in the 6-7 dollar range. Look at current prices in Europe...they have been paying
4.00 plus for years.

It's amazing isn't it? Politicians know everyone is mad about high gas prices so they propose raising taxes on the oil companies. I think that's what they call a non sequitur.

[joe bloe]

Originally Posted by CJ7

Dayuum joe .. I had no idea GE was a major oil production company.


thanks for that intel !!

Are you being deliberately obtuse?

http://dictionary.reference.com/browse/obtuse

[CJ7]

Originally Posted by joe bloe

It's amazing isn't it? Politicians know everyone is mad about high gas prices so they propose raising taxes on the oil companies. I think that's what they call a non sequitur.

oil subsidies amount to approx $5 billion per year .. if the 3 major oil companies deducted their 1/3 = 1.3$ from their $12x4=$48 billion dollar bottom line, their yearly PM would represent $46.7 Billion dollars..

if gas went from $4 to $7 and they ( the 3 major oil corps) posted $46.7 billion yearly earnings I would imagine an investigation would follow shortly thereafter

non sequitur, notwithstanding

[CJ7]

Originally Posted by joe bloe

Are you being deliberately obtuse?

http://dictionary.reference.com/browse/obtuse

nah, I was being deliberately sarcastic


http://www.merriam-webster.com/dictionary/sarcastic



you should learn the difference, really.

[Jackie S]

This is a pretty good article off of a Blog.
I would ask, does Microsift and Apple get any subsidies from the Government?

http://jacksonville.com/opinion/blog...too-much-money

[CJ7]

before I read the article I would say yes ..


brb

[CJ7]

Mlodinow goes on to describe the origins of Microsoft. IBM, whose success was built largely on government subsidized research, had belatedly decided to get into the personal computer business, that bevvy of geniuses having dismissed the trend in its planning during the 1970′s. They did not even have a program to run a PC, and so approached Gates for some help. Gates didn’t have one either, and referred them to Gary Kildall of Digital Research Inc.

[Jackie S]

The point is everybody comes down on "big oil" for making so much money, when in reality their percentage of profit is miniscule compared to these two electronic's giants.

And keep in mind, the Government invests nothing, and reaps a windfall in taxes for every gallon sold. On average, "big oil" makes about 2 cents off of every gallon sold, while the Government, (local and Federal), reap an average 48 cents from each gallon.

[joe bloe]

Originally Posted by CJ7

Mlodinow goes on to describe the origins of Microsoft. IBM, whose success was built largely on government subsidized research, had belatedly decided to get into the personal computer business, that bevvy of geniuses having dismissed the trend in its planning during the 1970′s. They did not even have a program to run a PC, and so approached Gates for some help. Gates didn’t have one either, and referred them to Gary Kildall of Digital Research Inc.

The way I heard the story, IBM was desparate for an operating system. They were trying to get a personal computer on the shelf in one year; that was really fast for IBM.

Gates didn't have what they wanted and referred IBM to someone else (Gary Kindall I guess). The punch line is the guy Gates referred them to insisted that his lawyer be involved in every step of the process, so much so that IBM gave up on him and went back to Gates. Gates bought an operating system from a third guy for $50,000 that was basically a pirated copy of the other system IBM tried and failed to buy. Gates cleaned it up so it was workable and his empire began.

It always struck me as kind of funny. The guy that was so hard to work with must have been kicking himself for the last thirty years as he watched Gates become the richest man in the world.

It's a little like Billy Crystal quitting Saturday Night Live before the broadcast of the first show (he was in the original cast). Then he watched the show become a huge success while his career faltered.

[CJ7]

youre talking price at the pump profit jackie or regional, not the global price for oil itself ... anyone who thinks it costs Exxon $99.98 to pump a barrel of oil and sell it for $100 needs to rethink ...

[essence]

Originally Posted by CJ7

youve been looking?

http://archive.greenpeace.org/climate/oil/fdsub.html

These are just numbers.

I wanted to look at Chapter 2 to help understand what the E&P subsidies are, but the link is broken.

Anybody can make a table with numbers, I want the explanation and details.

Anybody think that exploration and development costs are not a legitimate business expense?

[Jackie S]

Also, keep in mind, they make a hell of a lot more out of a barrel of oil than just fuel.

http://www.ranken-energy.com/Product...0Petroleum.htm

[CJ7]

Exxon spent 198 Billion$ buying oil on the open market (not counting what they produced themseves), they also paid 100M$ in royalty tax plus any and all state taxes which differs state to sate

thats not counting transportation to and from refineries, refinery costs, marketing, salaries, and all associated overhead that it took them to do business.

after all was paid for at the end of their fiscal year they still managed to make almost a $50 Billion dollar profit.

do I mind? of course not, business is business.

Do I like or think they NEED or deserve subsidies paid for by taxpayers in a stagnant economy.

Hardly. AND I have a difficult time understanding why any TRUE fiscal conservative would.

~~~~~~~~~~

essence

look through the other link and see if that answers any of your questions. Maybe it will.

[Guest123018-4]

Yes GE profits greatly from big oil if you would take the time to look at their drive to be the next Halliburton. GE has been steadily buying up oil service companies.

[essence]

I really don;t understand all this.

First, these big oil companies are huge.

Second, these big oil companies expend massive resources on other service companies etc.

So the total number of people directly or indirectly involved with the oil business is huge.

The ROI is the interesting number, not profit per employee (at one time I worked for a company which was about #1 for profit per employee, but that was becuase almost everything was outsourced).

Also, oil prices go up and down, who was complaining when oil company profits were down in 1999 and there was an oil price downturn?

But my main point is, I still can;t see where these tax breaks and subsidies are.

I am not an accountant, but there seem to be some stuff about how capital goods are treated. There are not ammortized over many years, they can be expensed immediately. But for those situations, where you drop an expensive drill bit and can;t retrieve it, doesn;t it make sense to account for that differently to normal plant machinery?

So I have looked, but cannot find, these mythical tax breaks, apart from maybe some trivial ones.

It is all the normal huffing and puffing with no substance.

The oil industry is an exceptional industry, so needs exceptional accounting procedures, GAP (general accounting principles) is not always applicable or fair.

There is something going on at present in North Sea about accounting for decommissioning costs.

The one thing the oil industry (and any other industry) hates is uncertainty. Why explore if you don't know what the tax regime will be like in ten years?