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Catalog of oil industry tax and other subsidies

Discussion in 'Energy, Environment, and Policy' started by bhzmark, Apr 6, 2015.

  1. bhzmark

    bhzmark Active Member

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    Do the critics of electric car tax breaks want to eliminate all of the tax breaks and subsidies that the oil industry gets? Why should the oil and nuclear industry get lots of tax breaks, loan guarantees, and subsidies while green technology companies like Tesla don't get them?

    Summary of fossil-fuel support to petroleum – United States
    Severance Tax Exemptions for Crude Oil (TX)
    Development Credit for Certain Producers (AK)
    Exclusion of Low-Volume Oil & Gas Wells (WV)
    Income support
    Exception from Passive Loss Limitation (Federal)
    Support for capital formation
    Expensing of Exploration and Development Costs (Federal)
    Excess of Percentage over Cost Depletion (Federal)
    Temporary Expensing of Equipment for Refining (Federal)
    Aid to Small Refiners for EPA Capital Costs (Federal)
    Enhanced Oil Recovery Credit (Federal)
    Sales Tax Exemption for Oil & Gas Equipment (TX)
    Qualified Capital Expenditure Credit (AK)
    Alternative Credit for Exploration (AK)
    Support for knowledge creation
    Amortisation of Geological Expenditure (Federal)
    Consumer Support Estimate
    Consumption
    Low-Income Home Energy Assistance Program (Federal)
    Small Municipality Energy Assistance Program (AK)
    Power Cost Equalization (AK)
    Alaska Heating Assistance Program (AK)
    Gasoline Tax Exemptions (TX)
    Fuel Tax Exemptions for Farmers (Federal)
    Consumption
    Fuel Tax Exemption for Aviation (WV
    Fuel Tax Exemption for Dyed Diesel (WV)
    Fuel Tax Exemption for Propane (WV)
    Fuel Tax Exemption for County Boards of Education (WV)
    Fuel Tax Exemption for Certain Public Administrations (WV)
    Fuel Tax Exemption for Certain Off-Highway Uses (WV)
    General Services Support Estimate
    Strategic Petroleum Reserve (Federal)
    Fossil Energy R&D (Federal)
    Northeast Home Heating Oil Reserve (Federal)

    Fossil Fuel Subsidies: Overview - Oil Change InternationalOil Change International
    http://priceofoil.org/wp-content/uploads/2012/04/OECD.US_.2009.2010-FIN.xlsx

    "Triumph of the Drill"
    Triumph of the Drill: How Big Oil Clings to Billions in Government Giveaways | Mother Jones

    "As Oil Industry Fights a Tax, It Reaps Subsidies"
    Log In - The New York Times

    Read the definition of SUBSIDY ...
    Subsidy - Wikipedia, the free encyclopedia
    Excerpt:
    Although commonly extended from Government, the term subsidy can relate to ANY TYPE OF SUPPORT - for example from NGOs or implicit subsidies. Subsidies come in various forms including: DIRECT (cash grants, interest-free loans) and INDIRECT (tax breaks, insurance, low-interest loans, depreciation write-offs, rent rebates).
     
  2. nwdiver

    nwdiver Active Member

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    You forgot one......

    136080.jpg
     
  3. ThosEM

    ThosEM Space Weatherman

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    THANKS! +1
     
  4. RichardC

    RichardC Cdn Sig & Solar Supporter

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    Not to mention the massive subsidies for airports, roads and other infrastructure which enables the use of oil!
     
  5. ChadS

    ChadS Petroleum is for sissies

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    I find that many "anti-EV" (why would you be against a particular car propulsion system?) people don't think (or at least don't like to admit) that there are any petroleum subsidies at all. If you give them a list like the one above, then they will start arguing about the definition of subsidy (which is also spelled out above).

    Next, they are likely to complain about not trusting the source. I then like to point them to the IEA's take (HERE). The IEA was created in response to OPEC and their mission is to keep oil flowing freely to Western countries. It is not a tree-hugging organization with an anti-oil agenda, so people trying to learn (rather than just argue) may be interested in what they have to say - which is basically that there are way too many oil subsidies, and that it would be better if they were reduced.

    Of course some people just like to argue and then will switch to another argument.
     
  6. rays427

    rays427 Member

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    Are you kidding me? Tesla and most other renewable industries have gotten all kinds of incentives. Do you remember loan guarantees (think Solyndra). I just got $10,000 from our government when I purchase my car. That's more than what I paid for gas over the last 3 years before I got the Tesla. Most of the exemptions mentioned are similar to those given every other industry. So what do you think would happen if they removed all these incentives? The oil companies make much less per gallon than the taxes the government collects. I think it's funny that RichardC included roads since gasoline taxes pay for maintaining roads whereas electric cars as of now pay nothing. Those of you completely against the oil industry need to read the book The Moral Case for Fossil Fuels. Just imagine what life would be like without fossil fuels? Cheap energy is what has allowed our prosperity.
     
  7. AB4EJ

    AB4EJ Member

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    This is true. Fossil fuels will be a big part of the energy equation for many decades to come. Even if everyone is agreed that renewables should be used wherever possible, it will take a long time to make a shift of something this major. Still, I don't have to be against something to say that I like something else better. I like the experience of driving electric, and all the things I don't have to do when using that mode (go to gas stations, change oil, maintain exhaust system, filters, timing chain, etc.), and will be willing to cover my share of highway maintenance (if someone figures out how to properly do that).
     
  8. ChadS

    ChadS Petroleum is for sissies

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    #8 ChadS, Apr 6, 2015
    Last edited: Apr 6, 2015
    Hi Rays,

    I suspect you were responding to this quote:

    Is that correct? I agree with you that greentech companies, including Tesla, do get subsidies as well. But from looking at the sentence before it:

    and the other discussion in this thread, I don't think the OP or anybody else here really meant to make that claim. I have seen a lot of wacky theories on both sides, but I have never seen anybody try to claim that EVs don't get subsidies and I don't think the OP was. I think he was talking in the possible future tense, because there are several EV subsidies that are being taken away, and most of the rest have sunset dates.

    I *have* seen many online comments that claim that there are no petroleum subsidies, and outright disbelief when they are mentioned. I think that is what the OP was trying to address with this thread - merely establishing that they exist, and it would not be good for America if petroleum keeps its subsidies and EVs do not.
     
  9. nwdiver

    nwdiver Active Member

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    #9 nwdiver, Apr 6, 2015
    Last edited: Apr 6, 2015
    I generate ~150% of what I need from the sun... so I'm living fossil fuel free now, no imagination required and it's AWESOME. It's very true that 'cheap' energy has gotten us to where we are... just like my parents providing for my food and shelter for ~18 years got me to where I am. It's time for humanity to grow up and stop fueling our quality of life at the expense of future generations.

    Fossil fuels are 'cheap' energy in the same sense that food at a soup kitchen is free... it's not... wether it's a drought stricken farmer in California or a drowned child in the Philippines fossil fuels are NOT cheap... someone else is just picking up the rest of the tab.
     
  10. dsm363

    dsm363 Roadster + Sig Model S

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    That's not true in every state. WA pays $100 flat fee so if you drive less that the what you would have paid in gas tax you are actually penalized. Of course you benefit if you drive more. Other states will of course find ways to get their tax from EVs when they become more popular. Wouldn't worry about that.
     
  11. CalDreamin

    CalDreamin Member

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    Think Big Picture. Overall, U.S. taxpayers have made a profit on that loan program.

    I disagree. I can't think of another industry for which the U.S. went to war to maintain industry's supply of raw materials over the past few decades, with long-term costs to U.S. taxpayers of over 2 trillion dollars.

    The price of oil products would rise to better reflect the unsubsidized costs.

    Source? ExxonMobil's income before taxes exceeds the taxes they pay.

    The oil companies will not disappear simply because government subsidies they enjoy were removed.

    Our long-term prosperity would be enhanced by phasing out subsidies for the oil companies.

    BTW, I'm not "completely against the oil industry". I work for an oil company. I'm against government subsidies for the oil industry.
     
  12. rays427

    rays427 Member

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    CalDreamin,

    I wasn't talking about the income taxes the oil companies pay. The income taxes are in addition to the State excise, sales and other taxes I was thinking of. California State Tax gasoline taxes are 65.98 cents per gallon. The average of all States is 48.85 cents per gallon. Major oil companies make about 25 to 30 cents per gallon profit in the best of times. Part of the reason I retired was I was tired of laying off employees in the 90's because the profits were so low. The last 10 years I worked for a major our profit was 0 to 5 cents per gallon. Removing the incentives will make producing US oil less attractive which makes us more reliant on foreign sources. It would also increase the cost to consumers which hurts the lowest income folks the most.

    As far as going to war to protect our sources of oil I agree with you. However, what would happen if we were cut off from those sources? Our entire way of life is based on cheap energy. Actually the oil companies would probably do just fine since the price would sky rocket and they would make much more per barrel. Do you remember the oil embargo in the 70's? The most important thing we can do is develop alternate sources of energy so that we don't need the oil from the unstable places in the world. Not building the XL pipeline is just plane stupid. Having control of that Canadian oil would help reduce our reliance on oil from unfriendly countries.

    It's hard to believe you work for an oil company and don't understand the risks taken by the industry versus the profits they make. Google, Apple, etc have much higher profit margins without the risks that oil companies have. Political risks, drilling in 10,000 feet of water not knowing if any oil will be found and of course the chance for a screw up like the BP blowout and the Exxon Valdez.

    As far as the loan program they made money on some of the loans but lost a lot on others.

    I am for removing all tax incentives by eliminating corporate income taxes. No company actually pays tax in the long run since they must be passed on to the consumer. Income taxes just increase the overall cost to the consumer because of all the money that is spent on trying to reduce them through our complex tax system. Just raise the individual taxes to make up the difference. Taxing corporations just hide the total tax actually being paid by us.
     
  13. nwdiver

    nwdiver Active Member

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    The solution to our addiction is not more of what we're addicted to... this isn't the 70s... Solar PV isn't $99/w; it's $0.70/w. Ramping up the cost of fossil fuels won't squeeze the economy, it will encourage increased use of REAL solutions. Solar PV is already cheaper than fossil fuels... we just need the correct market signals to accelerate the transition.

    It's human nature to keep doing what you've been doing... Solar PV could be free and there would STILL be people buying power from their friendly neighborhood coal plant because.... that's what they've always done. Sometimes you have to make them uncomfortable with the status quo... that's one role of a carbon tax.
     
  14. CalDreamin

    CalDreamin Member

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    For 2014, ExxonMobil produced oil that sold at an average price of $93.15/barrel while their average production cost was $12.55/barrel. That works out to a margin of $1.92 per gallon

    If we were cutoff from middle eastern oil then we'd obtain oil and other energy sources elsewhere. Supply would not match demand so the price would increase, This leads to two phenomenon that cause demand to equalize with supply -- (1) demand destruction and (2) an increase in supply as marginal producers enter the market.

    Taking business risks does not justify massive handouts from the taxpayers. Corporations with tens of billions a year in net earnings don't need subsidies.

    Overall, the agency has loaned $34.2 billion to a variety of businesses, under a program designed to speed up development of clean-energy technology. Companies have defaulted on $780 million of that — a loss rate of 2.28 percent. The agency also has collected $810 million in interest payments, putting the program $30 million in the black.
     

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