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US Oil & Subsidies

Discussion in 'Energy, Environment, and Policy' started by hcsharp, May 1, 2012.

  1. hcsharp

    hcsharp Active Member

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    The oil companies basically sell gas for the most the market will bear. If they can get a higher price in Canada or Europe or China (after shipping) then they will sell it there, not in the US. Only the market will change the price, not whether or not they get any subsidies. ckessel if Chevron got a subsidy and BP didn't, they would both still sell their gas for the highest price the market will pay.

    Rich I think you are basically saying the same thing I am. If the oil companies had to pay for all those things you listed in #1 - 4, they would still sell their gas for the most they could get for it. If that was less than their cost, they would cut production until the price came back up. They sell it in EU and UK for about the same price as in the States. The reason the consumer pays more there is because the government adds a larger tax.

    The reason we have massive subsidies for the oil industry is not to keep prices low. It's because they have a very powerful political lobby and several very effective super-pacs.
     
  2. brianman

    brianman Burrito Founder

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    There's a reason why "highest price the market will bear" in a search engine returns "Economics 101" links in the results.
     
  3. Robert.Boston

    Robert.Boston Model S VIN P01536

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    While the above analyses of the effect of subsidies are correct in a static analysis, I don't think that they fully capture the dynamic effects. There is a spectrum of exploration & production costs across different oil fields. If federal subsidies lower the cost of E&P to the oil producer, then more oil fields become (apparently) economic to develop. This increases the total supply of crude, which shifts the world price of finished products.
     
  4. 78Lion

    78Lion Member

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    Price sold has a much more direct correlation. Shale oil production would dry up if the price of gas fell to 2.50 a gallon as it would not be profitable to produce. It has been an known source for 100 years, yet production was non-existant until the price at the pump justified its production.

    The amount of federal subsidy necessary to reduce cost to a point of viability hasn't been reached yet, though the lobbies continue to try to get more.

    We might want to move this thread, or the tangent to an off-topic thread.
     
  5. Norbert

    Norbert TSLA will win

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    Which means that the benefits of these subsidies are distributed over the whole world, and deplete US supplies of oil. It is like giving away oil.
     
  6. vfx

    vfx Well-Known Member

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    #6 vfx, Dec 7, 2012
    Last edited by a moderator: Mar 13, 2016
     
  7. vfx

    vfx Well-Known Member

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    Taxpayers on the Hook for BPs Gulf Spill | Fox Business

    BP is moving to cut its tax bill by about $11.8 billion by writing off the costs of its devastating oil spill in the Gulf of Mexico as an ordinary business expense, a spill which wreaked havoc on the Gulf, killed wild life and damaged the local economy.


    Then there are the real costs:

    Gulf Oil Spill: Cleanup Has Cost Federal Taxpayers $87 Million So Far

    Federal officials say cleaning up the massive oil spill in the Gulf of Mexico has already cost the government $87 million, making it the third-most expensive cleanup effort in the nation's history.

    A senior financial analyst at the National Pollution Funds Center says an additional $38 million in emergency money has been assigned to the Deepwater Horizon spill, but it has yet to be spent.
    The most expensive cleanup was the Exxon Valdez spill, which cost $121 million. The second was $89 million for cleaning up a 1994 oil spill off the coast of San Juan, Puerto Rico.
     
  8. vfx

    vfx Well-Known Member

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  9. vfx

    vfx Well-Known Member

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  10. scriptacus

    scriptacus Member

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  11. vfx

    vfx Well-Known Member

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    Energy use VS energy creation.
     
  12. Kipernicus

    Kipernicus Model S Res#P1440

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    Any more links that prove out and quantify the subsidies to the US oil and gas industry?

    I'd prefer sources that are not easily dismissed by skeptics (no studies by the Sierra Club, please)

    Thanks
     
  13. apvbguy

    apvbguy Banned

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    there is so much misinformation in this thread, I will address 2 points.
    one huge reason gas at the pump cost so much more in europe could be laid to the reasons offered but one of the biggest reasons for the price differential is TAXES applied by european governments that fund their specific brands of socialist programs. that is not done in the US. and the other misconception is about the costs of crude oil. crude oil comes in different grades and from different sources. the biggest reasons for differentials in the cost of crude are the quality of the crude oil and the costs of getting it from the ground to the refinery.
    if the US did not take steps to protect the sources of crude oil or the routes uses to transport the oil the whole world's economic system would be in tatters and you wouldn't be able to heat your homes, light your lights, have food in your stores or clothes on your backs, let alone be able to buy high priced high tech electrically powered vehicles.
     
  14. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

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    Nobody disputes the amount of trouble that governments go to gain access to and to protect petroleum. In fact, people emphasize just how much of a problem that is. What really is annoying is that instead of consumers paying for that protection through a consumption tax, it's paid for with general taxation. The consequence is that the USA is incredibly inefficient in petroleum use and alternative technologies do not advance as fact as they should.
     
  15. Robert.Boston

    Robert.Boston Model S VIN P01536

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  16. VolkerP

    VolkerP EU Model S P-37

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  17. Jeff Miller

    Jeff Miller Member

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    There are some things that France doesn't get quite right (in my opinion) but when it come to energy policy, they are second to none; much lower costs for electricity and much lower carbon emissions than almost all of its neighbors. (As a former employee of the Commissariat a l'Energie Atomique, I may be slightly biased.)
     
  18. RiverBrick

    RiverBrick Active Member

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    The heat and light in my home come from electricity, which in turn is produced 98% by Hydro and 1% from Wind.
     
  19. ggies07

    ggies07 Active Member

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