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- GM on the Skids - Fast Money Recap (7/2/08) [view article]
- Does Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
- Petrobras: Set to Become a Global Oil Major - Barron's [view article]
- Some Energy Stocks Burn Brighter Than Others [view article]
- Dow at 8000 Is Not Out of the Question [view article]
- The 'Peak Oil' Myth: New Oil Is Plentiful [view article]
- An Alternative to America’s Gasoline Crisis [view article]
- Exxon Joins Competitors in Moving Away from Gas Station Ownership [view article]
- Why Investors Should Be Interested in Shale Oil [view article]
- New Indexes Take Different Slant on Commodities [view article]
- Global Warming Up to a Hydrogen Economy [view article]
- Mid-Caps Are Outperforming Large- and Small-Caps [view article]
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- 20 Guidelines for the Individual Investor
- Does Big Oil's Apathy Justify Proposals to Tax Windfall Profits?
- GM on the Skids - Fast Money Recap (7/2/08)
- Mid-Caps Are Outperforming Large- and Small-Caps
- Petrobras: Set to Become a Global Oil Major - Barron's
- New Indexes Take Different Slant on Commodities
- Some Energy Stocks Burn Brighter Than Others
- New Lows For the Dow
- Canadian Crude Pushing South
- Earnings Volatility for the Dow 30
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GM on the Skids - Fast Money Recap (7/2/08) [view article]
so merrillynch thinks gm may go bankrupt. that is enough to make me at least put them on a watch list with ford as a potential long term comeback. oh mer is further down the list along with citi and the other major financials. probably a very longterm watch. the financials will go much lower before i will even consider them. ReplyDoes Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
Augustus:Big Oil is not affected by the tighter crack spread since their upstream operations more than compensate for any tightness in their downstream operations; it is the independent refiners who are suffering now. Further, the crack-spread did not tighten till $120+ oil, led to reduced demand in the US. Thanks to our dependency on oil, the demand for oil is relatively inelastic (wrt price) till it reached a tipping point. Demand did not drop meaningfully while gas moved from a buck something to $3/gallon, and the refiners were able to pass on their increasing raw-material costs. It is only when $4/gallon gas started crippling demand, did their ability to pass on the increased costs diminish.
carbonates:
1. Thank you for your wonderful, fact-filled comment, instead of the ideology driven emotive reactions. One aspect which caught me eye was the extremely low risk tolerance used by Big Oil companies to determine whether to develop a field; they want a sure thing (almost like a grocery store). It is reflected in their replacement rates (now below 100%) and the small percentage of revenue they devote to capital expenditure, especially new exploration.
2. The current tax bill is structured as 'an invest or pay tax on profits' bill; it is not like the Carter era bill which was a tax on excess revenues above a certain level.
(a) Companies which are already investing in alternative energy (like Shell/Chevron), will not have to pay new taxes.
(b) Since this is a bill on profits (and not gross revenues), in a perverse way, this might even spur investments in traditional oil exploration: companies have a choice to either pay taxes now on higher profits or invest more now to reduce their profits, and pay lower taxes. Note that the traditional arguments about how high taxes discourage investments falls apart when oil is $100+/barrel; the upside on any success is immense.
user222390: As a member of a minority ethnic group which has the highest average income in the United States (including Whites), I am acutely aware of the tax burden; almost all my financial decisions keep in mind the tax impact since I pay taxes at a marginal rate exceeding 40%. I also have realized how one industry has played a key role in shaping our policies, and its short-sightedness in destroying alternatives, is now threatening the entire global economy, while enriching nations amicable to our national interest.
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Does Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
if i get a great idea and make 10,000% i do not want a bunch of socialist coming around with their hands out. nor do i want mommy government to step in with law to force me to give up one penny of profit. i only give charity on the street to the drunk who says hey budy i need a drink. everything else i give through the irs. stop whining and take care of yourself. you are americans. act like it. buy an oil stock if you think they are making to much money. ReplyDoes Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
Another example of a socialist leaning minority member working in the securities industry trying to first convince us he's a capitalist, then going for bigger and more government programs and initiatives. It's all about social policy and government with this guy, not free markets or capitalism. It's all about getting his left-leaning viewpoint to influence tax policy. The government has no business taking more money from any one industry or company than it does from another, despite Saxena's attempted justification. I think he should get out of the capitalist securities business and go into a socialist leaning profession like education since that's what he thinks his position on Seeking Alpha is all about. ReplyDoes Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
This proposal just in from Alaska Daily News (adn.com). I guess Senator Stevens and Governor Palin read my post. The propsal also discusses a coal liquification plant for coastal communitiesThe proposal includes:
Targeting oil speculators who buy and sell barrels without ever intending to use them, which Stevens says has inflated gasoline prices. At least it suggests where the feds spend their take.
Trying once again to open ANWR to oil companies, and spending all the federal revenue -- which he estimates could be $300 billion over 30 years -- on alternative energy projects.
Give the state more than a third of federal revenue from offshore leasing and production, with a quarter of that cash going to nearby coastal communities.
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Does Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
our military is in the persian gulf because jimmy carter agreed to replace the departing british fleet. i recall the labor party prime minister admitted he was pulling out the british fleet to appease the left wing of his left wing party[ who were probably trying to avoid or please the soviets who were moving into afghanistan]. big usa oil was not the issue; jimmy was trying to protect europe and japan's source of oil. very little oil comes to the usa from the middle east. do try to get your allegations straight; move on .org and the treason times are not unbiased. ReplyDoes Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
Oil Companies should not invest in Alternative Energy, simply because they are oil companies, and are not good at developing alternative energies. The money is better spent and better trusted with alternative energy companies. Big Oil should continue on its course of developing better drilling, development and exploration technologies. Stricter pollution and greenhouse policies should be enforced, cleaning up refineries and controlling carbon emissions. CO2 injection should be enforced encouraging continued technology development and expenditure in that area. ANWR should be allowed to be developed under the same environmental scrutiny as Prudhoe Bay. The state of Alaska should negotiate an alternative energy strategy for its state in exchange for the opening of ANWR. The state reaps substantial profits from its oil and has a tremendous surplus.Subsidizing corporatations never works because the money never leaves Wall Street. There is no doubt that investment firms and insiders are pillaging our economy. It is better to subsidize responsible consumer spending, and reward innovation, then to allow another dime to filter through Wall Street. Stand up to the big investment firms, change the trading rules and capital gains tax structure, and then there will be more than enough money to subsidize alternative energy. If you want a windfall profits tax, than tax wall street and insiders. Reply
Does Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
As an exploration geologist I can only shake my head and realize how misunderstood my job really is, even within the oil industry. As recently as 2005 I was forced to calculate the economics of a new well proposal based on $20 oil and $2 gas. More recently that number has crept up to $80 and now $100, but only because I am at a much smaller company. At the major, my lead time on drilling a well was in some cases ten years. Can you predict oil prices out ten years to make spending decisions today? Yes, it took that long to plan and prepare for it. Then we were risking $10 to $20 million for a one well prospect that might have a 20% chance of success. Ten percent was more likely. Big projects risk billions of dollars many years in advance of any return on investment.On top of all of this the industry has gone through extraordinary hard times only a decade ago when prices went to $13 and layoffs were huge. Exxon bought Mobil to survive. BP bought Amoco, Arco, and Pennzoil. Today they can't hire enough people and only recently have new college recruits showed signs of being willing to work for a "dead" industry- never mind that it pays incredibly well and we use technology that would make NASA envious. At times the value of the computing power under my desk has exceeded $500,000 if you count the software on my computer. Yet the damage from years of periodic layoffs has left a serious mark on the industry and chased away much of the talent that is needed to find new oil. Never mind that in an experience based business, the next generation will have to learn from increasingly scarce workers who remain. Of course, it doesn't help the majors that some of their best talent gets hired away by the likes of National Oil Companies.
The point you don't seem to get, is that big oil has been failing to find enough new reserves to replace its own production for quite a few years. The Gulf of Mexico is in decline. Alaska has been in decline since 1987. Mexico has been in decline for decades. The North Sea has long been in decline making the Brent marker crude almost an obsolete pricing tool because the trading is too thin.
The future of US oil and gas production is not with the majors. They have the unenviable position of trying to find resources that have "material" value. Too small, and they walk away; they never even drill. Only a few years ago I was told that if my play concept couldn't reach a scope of 3 Trillion cubic feet of gas, it wouldn't get tested. Those elephants are mostly gone. Small independents who are purely producers are the wave of the future. Small independents are happy to drill a $5 M well and find less than 1 million bbls. Some have figured out how to drill a $50K well that may only produce 10K bbls. Majors can't do that. They would never be able to grow the balance sheet, much less keep up. The problem is that $5 M well will probably only produce a 100 barrels a day. We need 180,000 of those. Currently there are 1,921 rigs working in the US. Most of those average one well per month. If half of those wells fail to find commercially viable oil, they might be able to add a little over $1.2 million bbls/day in production to the US. Of course, that is $580 Billion a year at current prices that would not be part of the trade deficit. What would that do for the dollar? As much as $90 billion of that might go straight into state, local, and federal tax coffers. The US oil industry currently is the 2nd largest source of income to the Federal government, with revenues from leasing, royalties, bonus payments, and other taxes. All of that is BEFORE income taxes- it is at the wellhead. In reality, the idea of adding windfall profits tax to the US oil industry is most likely to be revenue neutral because as the production falls, the existing royalties will fall also.
But you would like to tax us. The result: less money for the high risk exploration budget. Job cuts. Lower production in the long run. Fewer new hires. Fewer small independents that are willing or able to raise the millions in capital it takes to drill just one well. And I will just go work for Saudi Aramco or some other foreign company, where even my personal tax burden will be lower. I don't see grocery stores risking $15 million dollars trying to find enough canned beans to stock the shelves next month.
If you want to see what the result of your tax proposal will be, you don't have to look far. The Canadian province of Alberta raised taxes on oil companies last year. Layoffs were almost immediate. Stock prices fell dramatically. Large companies left the province like mice from a sinking ship. Drilling rigs moved south to the US, which was fortunate for the US operators. Production is down already.
I will also take issue with your belief that oil companies are not investing in alternative energy. Shell did key research in developing thin film solar and is part of a joint venture to create the next wave of solar energy. BP is one of the world's largest solar power manufacturers. Shell is one of, if not the largest generator of wind power in the US. I believe they have about 500Kw of wind generation. Chevron is the world's largest geothermal power company. Shell has major investments in cellulosic ethanol and is the world’s largest refiner of biodiesel. None of these enterprises is large enough to attract the attention of stock investors, but none of the alternative energy supplies come close to displacing oil (some like corn ethanol don't even have the capacity to replace oil), so being a big fish in the smallest pond is not very impressive to investors like you. Nevertheless, the oil industry has my bet to dominate the "alternative"... energy industry as soon as the economics begin to work.
The oil business is NOTHING like grocery stores. If your suggestions are implemented, I'll be moving out of the US to find a job, unless of course I want to stock shelves.
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Does Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
This article has a few correct points. Then falls apart when trying to place blame for high oil prices.80% of the oil reserves have been nationalised. If it was only Aramco that had control over the Saudi fields, they would bve selling the hell out of it NOW. Chavez has taken over his fields - production down over 1mm bbl per day. On and on with the benefits to the market by having allowed nationalisation.
However, one of the nuttiest statements by the author is that the government has "guaranteed the oil companies asured profits from refining and distributing the product." What a load of uninformed BS. Check the crack spread. It has been very tight and is getting tighter. So bad that some refineries might shut down.
The only place that Big Oil is making a profit is from selling the reserves that they have developed. Sure prices are high. But that is thanks to OPEC, not Big Oil. Why should XXX producer headquartered in the USA not be paid the same as Chavez or a Canadian? When they do make a profit here, the govt gets their share in taxes - 30% or so.
Pretty idiotic. Domestic producer invests in oil and gas - price goes up - they get a super extra tax for causing inflation. Joe Shmuck invests in homes 15 yrs ago. Price goes up and causes inflation. Sell with no taxes.
If I were running one of these Big Oil companies I would move the HQ offshore. Sell all US assets. When they asked me to testify in Congress - I would send them a FU message. If you want some energy, send your boat to get it. We stopped making deliveries. Reply
GM on the Skids - Fast Money Recap (7/2/08) [view article]
The fast money TV show is around for one reason to make money from advertising. ReplyDoes Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
The more tax money the govt. takes, the more tax money they waste. But, what the heck, it is easy to spend money when it is not your money. There is no reason to care at all. ReplyDoes Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
A few random thoughts...thank goodness we have Big Oil- they are the only companies able to compete with state owned oil companies on a global scale where they are alloeed to compete. "Big Oil" is such an overused phrase- as if it were a bad thing. Bil Oil has the expertise and financial wherewithal to tackle the big projects in hostile environments.......Also thank goodness for Little Oil, the group of publically and privately held companites that find 90% of the new discoveries domestically.
As for the constant Demo whining about oil companies not exploring the leases they currently have, that is simply incorrect. The principal exploration tool is seismic and the industry shoots the heck out of it. Why the dems can't understand that it is all about geology and not just poking a hole in the ground anywhere is beyond me. You hear the same whine from Joe Biden to Nancy Pelosi to Rham Emmanual, all noted oil experts.
Some statistics- 7 of the top 20 oil fields in the US are located in the deepwater GOM. The GOM supplies 21% of domestic natural gas production and 30% of domestic oil production and that is from the central and western gulf, not including the over 11 MM acres offshore Florida that is off limits to Exploration. Not bad considering this production comes from the 15% of the OCS that is not off limits to industry. Imagine the potential of the remaining 85%.
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GM on the Skids - Fast Money Recap (7/2/08) [view article]
In the global markets, is there ANYTHING that is not impossible, seeing that that exciting really is a double or tripple negative! Replyrver
GM on the Skids - Fast Money Recap (7/2/08) [view article]
The Fast Money Guys are pure and simple momentum players. Their recommendations are for investors who keep careful tabs on the market. Following them you can make huge gains, but must be able to take losses and shift to the new group, either long or shortl. Long term investors are advised to beware of the Fast Money Guys. Stocks like GE, Emerson Electric and Air Products and Chemicals are seldom on their radar screen. ReplyDoes Big Oil's Apathy Justify Proposals to Tax Windfall Profits? [view article]
Those who don't read history are condemned to repeat it...Just how BIG would so-called Big Oil be if their worldwide reserves hadn't been nationalized out from under them by the OPEC cartel?
WOW!
The last time our politicians instituted a windfall profits tax on oil, the price rose and production fell. What a great idea that was! Reply