Xorthfred

Does Big Oil's Apathy Justify Proposals to Tax Windfall Profits?

Firstly, the implication that all of the public lands made available to oil companies has oi underneath it is beyond stupid! The fact that so much oil has been found on public lands made available by the Bush Administration is AMAZING! Finding oil is more like finding a needle in a haystack than pumping water out of a lake! The oil royalties are substantial to the federal govt. Much of it has been pumped into the strategic oil reserve during May and June.

Secondly, the oil companies face an extraordinary situation at home and abroad whereby all of the leases and contracts are subject to unilateral cancellation and renegotiation. No Government in the world can be counted on to be true to their word or their contracts. Unilateral nationalization without compensation is becoming the rule. Blasting companies for being cautious in this environment shows an alarming lack of objectivity. Even Obama is proposing canceling oil leases currently in effect. No democrat is willing to admit to the amazing technological innovations in the oil business, nearly all of them the result of American corporate efforts (horizontal drilling, offshore technology, more efficient refineries, etc.).

Third, a trillion dollar mass transit or Manhattan project for alternative energy funded by taxing oil companies by necessity involves taking money from poor states with low per capita incomes (Louisiana, Texas, Oklahoma) and giving it to the politically powerful high income states and DC: New York, Pennsylvania, DC, Massachusetts, Connecticutt, Rhode Island, and California).

In fact, no state in the country recieves less per capita than Texas, which ranks 39th in per capita income. New York and California are the richest states in terms of per capita income in the country.

Also a point in fact: Exxon wrote off over a billion dollars in alternative energy projects in the 1980s. Shareholders are very happy that they have not been pressured to jump into the ethanol financial fiasco, whereby the companies are losing money; the taxpayers are being taken to the cleaners; and the consumers are forced to pay more for gasoline than otherwise.

Oil companies are acting very rationally given the likelihood of special taxes just for them and much more subsidies for their competitors. But anyone who has studies history knows that virtually every one of the govt. initiatives will fail. Examples of similar failures include the current ethanol fiasco; synfuels subsidies programs during the 1980s; the Japanese Fifth Generation Project; and the Microelectronics and Computer Technology Corporation (MCC) consortium under Admiral Inman.

Just as Apple Computer, and later Dell, revolutionized computers, some entrepreneurs will come up with the innovations to transcend the piston engine and the use of home heating oil. I actually anticipate that the government will be in the way trying to stop the innovators throughout the entire process with lawsuits, regulations, securities enforcement actions and special taxes.

An Alternative to America’s Gasoline Crisis

Some very good points. America must use all the tools in the chest. This means that we need to unleash the private sector. Take the shackles off of coal, natural gas, oil, hydrogen, nuclear and shale. We will not need a trillion dollar taxpayer funded Manhattan Project if we allow the existing and near term technologies to be used by business. Otherwise, all we have is another government created crisis for which we must pay massively for govt. to "find" the solution.