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Hands Off The Windfall
Posted on Friday, October 28, 2005 @ 21:17:28 GMT by vlad
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by Christopher Helman, 10.28.05 (Forbes.com)
HOUSTON - A record earnings season for the oil
industry is stoking increased grumbling from politicians, citizens and
activists who want the U.S. government to levy a windfall profits tax
on companies that are enjoying their highest profits ever. This week, Exxon Mobil announced third-quarter net income of $9.9 billion, up 75%. Royal Dutch Shell posted $9.2 billion, up 68%. BP advanced 27% to $5.3 billion. It's even better at smaller operators like Marathon Oil, where earnings more than trebled to $770 million.
In a sense, America should be happy to see
those profits; they imply that America's energy supply system is
efficient. If Big Oil wasn't making money in a time of record energy
prices, then we'd really have a problem.
Sen. Hillary Clinton (D, N.Y.) doesn't see it
that way. She introduced a bill this week that would levy $20 billion
in annual taxes on oil companies to help subsidize energy costs of
low-income households. Though the bill stands no chance of passage, it
illustrates the terrifying delusion that politicians think they know
better than captains of industry how to maintain cheap energy supplies
for America. If put into practice, a bill like Clinton's would cause
more harm than good. Giving $20 billion in free energy to low-income
families would cause a huge spike in demand for oil and natural gas
supplies that are already stretched tenuously thin--pushing prices up
even further, for everybody.
......
Instead of stealing money from companies that
earned it through foresight and stringent business practices,
politicians need to break it to America that high oil prices are here
to stay and enact some safer and more productive long-term solutions:
1. Pass legislation that mandates higher fuel efficiency standards.
2. Gradually raise gasoline taxes so that Americans are forced to come to terms with reality and start using less.
3. Enact tax rebates on fuel-efficient cars and offset the revenue loss with higher taxes on luxury SUVs.
Enjoy cheap energy while it lasts. Because as
China and India continue to increase their already soaring petroleum
demand, supply will only become more constrained and oil prices will
continue to rise. And some day (maybe tomorrow, maybe 2050), global oil
production will peak and begin its long decline. This is a finite
resource; as easily accessible oil is tapped out, it will become more
difficult and more expensive to get at what's left. With each passing
year, mankind will have to learn to get by with less oil at higher
prices. When that time comes, the industry's profit potential will
dwarf what it is today.
Therein lies the perfect hedge for
gas-guzzling Americans: Start investing in big oil stocks now, then
over the next couple decades use the gains to outfit your roof with
solar panels or make the payments on a hybrid car.
Read the whole story here: http://www.forbes.com/business/2005/10/28/exxon-chevron-oil-cz_ch_1028windfall.html
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Re: Hands Off The Windfall (Score: 1) by ElectroDynaCat on Saturday, October 29, 2005 @ 08:43:22 GMT (User Info | Send a Message) | The candle burns brightest before it flickers out. Having passed the Peak Oil point back in 2001, the time of record profits for the Oil Companies will be here and gone soon.
They're trying to make as much money as they can now, while they can. You can't sell what you don't have.
Every year since 2001, the amount of oil produced has decreased slightly, thats how we know that we're past the Peak Oil point. Very few new fields have been discovered that could be profitable to develop.
In the oil business, when a new field is discovered, the practice is to suck out as much as possible as fast as possible, the reason is simple. Other companies will inevitably have some claim to that field, and with directional drilling is just about impossible to know who else has a straw in your milkshake.
I you don't have Oil Company stock right now, understand that the value has peaked along with production, hang onto it until the Oil supply sputters out in the next five years and try to get rid of it before the oil crash.
There very little that can be done to avoid what was predicted to happen back in the seventies. America decided on business as usual at that time, now its time to pay the piper. |
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Re: Hands Off The Windfall (Score: 1) by Denyarvas on Tuesday, November 01, 2005 @ 12:06:24 GMT (User Info | Send a Message) | At late, myself included, everyone is talking about the ludicrous oil pricing we have all encountered this last year. Anyone paying attention will quickly see by the large profit margins posted by all the oil companies that "outright qouging" and overcharging is rampant and without control of any sort. This has been going on with steadily increasing prices since the early 70's, yet it seems that nothing is being done about it. Sure, oil will run out soon enough and alternate energy sources will come forward and as most of us suspect, the oil companies have probably bought up most of the patents for these technologies already and will only utilize them at the last minute when the oil is nearly gone. I can only hope that there are a few "not so greedy" engineers that will refuse to "sit" on their designs and come to market soon with technology that will allow us a break from political and corporate greed. |
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Time Magazine Finally Covers Peak Oil (Score: 1) by vlad on Tuesday, November 01, 2005 @ 20:28:25 GMT (User Info | Send a Message) http://www.zpenergy.com | Dissident Voice - Santa Rosa,CA,USA
by Shepherd Bliss
www.dissidentvoice.org
November 1, 2005
Time
magazine became the most recent mainstream publication to finally give
detailed coverage to Peak Oil. Its Oct. 31 twelve-page spread on “The
Future of Energy” follows major articles in USA Today, New
York Times, Wall Street Journal, San Francisco Chronicle
and other big city dailies in recent months. They finally mention the
coming Peak Oil that many geologists have been warning us about for
years.
Such articles appear after
two major groundbreaking cover articles on oil by
National Geographic [magma.nationalgeographic.com],
the first in the summer of 2004. The October Esquire offered a
two-page “ Five
Minute Guide: Oil [www.smartmoney.com],”
which begins with the question “What’s ‘peak oil’?”
Time’s lead article “ How
to Kick the Oil Habit [www.time.com]”
by Michael D. Lemonick runs four illustrated pages. Its only highlighted
quotation is from Richard Heinberg, author of
The Party’s Over:Oil,
War, and the Fate of Industrial Society: [www.museletter.com] “Price
signals come much too late, and we will endure a tremendous amount of
hardship that could have been averted if we’d acted sooner.” The
article’s sub-head recommends that people “get ready for the withdrawal
symptoms.”
In his two recent books on energy descent and in public speaking in the
US, Europe, Africa, and Latin America, Heinberg describes how rising
gasoline prices indicate the deeper and potentially devastating reality
that the globe is running out of the petroleum that fuels contemporary
societies.
Three major news events apparently stimulated the Time articles:
1) gasoline prices that “are roughly 25% higher than they were a year
ago,” 2) “last week('s) 2005 Tokyo Motor Show,” where “carmakers
practically ran over one another promoting their versions (of hybrid
cars) in attempts to catch up with Honda and Toyota,” and 3) Hurricanes
Katrina and Rita. Time notes, “A hurricane like Katrina or Rita
or last year’s Ivan could trigger a shortage by putting even a few of
the remaining U.S.-based refineries out of business for a few weeks.”
Time quotes oil optimist Daniel Yergin, author of
The Prize [www.amazon.com]
in 1991 and chairman of the Cambridge Energy Research Associates, as
saying, “There’s a lot of technological innovation kind of bubbling
that really has captured the imagination and obsession of a lot of
people.” But Time writer Lemonick wonders, “Are we moving fast
enough?”
Energy investment banker Matthew Simmons responds to Yergin’s familiar
argument that this is the fifth or sixth time that the world has run out
of oil. Simmons, who doubts that Saudi Arabia has the petroleum reserves
that it claims, argues, “This is a shortage where demand actually
exceeds supply. A confluence of trends has made oil shortages
inevitable, not optional. One is the unexpectedly rapid expansion of
India’s and China’s energy needs.”
Amory Lovins, director of the Rocky Mountain Institute, adds, according
to Time, that “oil companies, worried that these changes could
leave them behind, are starting to think of themselves instead as
broad-based energy companies.” Lovins says that “Shell and BP are
already headed in that direction.” Shell has apparently become the
largest seller of biofuels and is buying up solar panels. ...
Read the whole article here: http://www.dissidentvoice.org/Nov05/Bliss1101.htm [www.dissidentvoice.org]
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