Let me tell you the real story my press/government believing friend. Those were not errors, it is really a break on royalties, and the leases would never have been sold at the normal rates.

The Clinton Administration (Yes, that is correct, the lefties) noted that no one was drilling deep wells. They wanted the revenues from the lease sales, so they changed the standard terms on the leases. Had they not done so, there would have been no way for anyone to make a profit because the price of oil was too cheap at the time, and these leases were all gong to be expensive to explore and produce. Basically, this is analagous to a mall owner giving tenants a cheaper price on less desirable locations in the mall.

Fast forward to the Bush administration (Yes, that is correct, the right wing in the pocket of big oil guys) and the price of oil is now through the roof. The realize that the lease holders are making a huge profit, and in the spirit of communist governments everywhere, claimed the leases were a mistake and demanded back payment. Using the mall analogy, the mall owner now comes back after the retail shop located in the closet under the stairwell and demanding years of extra back rent because he finds out that the guy was making a lot of money back there by using expensive advertising.

As I said, some companies came to a settlement, others are still fighting. However, in no way is this a subsidy or a tax break for the oil companies under any objective opinion. Sure, royalties may be technically taxes, but a reduced royalty on an undesirable lease is supposed to be a subsidy?

What is really disgusting is the Clinton campaign blaming Bush for giving away the so called subsidies when it is actually the exact opposite. What is also disgusting is the NYT slanting this story when they know better. As written, it is more editorial than news, but that should surprise no one who has read that rag in the last decade.

There are actually a few tax breaks and subsidies for the oil industry, but they are really insubstantial compared to the taxes paid by them. All major industries in this country get something, and I would be glad to see almost all of them cut off. Especially the airlines and big ag.

Please tell us about a huge tax cut, incentive, or subsidy for oil companies. Please? Just one.

January 19, 2007
House Votes to Rescind Oil Drillers’ Tax Breaks
By EDMUND L. ANDREWS
WASHINGTON, Jan. 18 — House Democrats easily passed legislation on Thursday that would rescind $14 billion in tax breaks and subsidies for oil drillers and reserve the money to develop alternative energy projects and conservation technologies.

The measure passed 264 to 163, with many Republicans joining a bloc of Democrats. Passage came despite opposition from the oil industry and the Bush administration, which said the bill singled out the companies for higher taxes and could increase the country’s dependence on foreign oil.

The bill will rescind $7.6 billion in tax breaks for oil drillers that Congress passed in 2004 and 2005 and will add $6.3 billion in royalties from companies that pump oil and gas in publicly owned waters of the Gulf of Mexico and off Alaska.

One provision is intended to correct errors in drilling leases signed by the Interior Department in the late 1990s that allowed oil companies to escape billions of dollars in royalties over the next decade.

The provision, opposed by the White House and the industry, would require companies that refuse to change their leases to pay a “conservation fee” on each barrel they produce. Otherwise, under the bill, the companies would be barred from acquiring additional leases.

Full article:
http://www.nytimes.com/2007/01/19/business/19royalty.html

Sorry, but the topic was gas consumption. No need to change the subject.

Well, again no.

The question posed by Lieberman regards what to do about gas? His comments focused the discussion on consumption and price. Early responses recommended taxation and various types of regulation, for both economic and environmental reasons. If you followed my posts in this thread, I began with a simple advocacy to leave gasoline policy alone, and explained why. I then responded to some other contributors and have followed a general line of discouraging regulation and taxation, encouraged behavioral consistency on the part of advocates for both, gave illustrations that included some examples of car-buying decisions, and concluded with a summary of inconsistencies that are undermining the credibility of advocates for regulation.

I’ve been entirely on-topic.

Phil

Sorry, but the topic was gas consumption. No need to change the subject.

Sorry, you’re reaching. None of my posts here have been either promotional nor has anything in this thread been domestic-car exclusive.

Nothing I wrote contradicts the middle of your immediately-prior post.

End result: If the goal is to reduce the trade deficit, then the solution is to buy a car assembled in the US with US parts. The company that makes the vehicle does not change the amount that is contributed to the trade deficit.

Nor did I contend it does. I also made it clear that reducing the trade deficit isn’t the *exclusive* goal. But if it were, that means you ought to buy a Cobalt or Focus over a Corolla or Civic, a Malibu/Aura/G6/Impala/Buick over a Camry, Mazda, Korean sedan, Passat, “Toyus” or Accord, a Cadillac or Lincoln over any luxury competitor, a D3 pickup or SUV over any competitor, a Corvette over a Porsche, and the Fusion is left in a grey zone since you’re unwilling to recognize that trade with NAFTA partners is differentiated from trade with the EU, Japan, Korea, etc., in economic and social consequences beyond arithmetic trade accounting.

The larger point is that regardless of whether the issue is trade deficit, environment, domestic manufacturing jobs, the dollar’s value, etc., the purchasing decisions every individual makes are their highest point of daily leverage for influencing the world they live in, and in those choices you find clarity about whether advocates for taxation and regulation are hypocrites or truly committed.

Put other ways, if your advocacy for taxing gasoline is rooted in concern for carbon emissions and you bought a Prius, you probably haven’t thought about your favorite crisis holistically. If you prematurely traded an otherwise lightly used car, you only made an statement, not a contribution. If your advocacy is rooted in concern for American economic vulnerability posed by dependency on oil imports and you don’t own domestic vehicles, support offshore drilling, nuclear power, clean coal, etc., your concern rings hollow. If your advocacy is based on what others here referred to as “cheap-bastardism” but you drive anything more than utilitarian transportation, that’s hard to take seriously. If you don’t have a plan for how tax proceeds would be used, that’s an incomplete idea. If you want to see gasoline be made more expensive through taxation out of environmental concern but live in more than, say, a 2500 s.f. house, fly in private or chartered jets, burn wood in your fireplaces, etc. then again your commitment isn’t really pegged to the problem.

We don’t need taxation or regulation to make headway if we exercise the power handed us every day at the figurative cash register. Each of us makes choices every day that move us collectively closer to or further away from tackling real problems — even imagined ones.

Really, economics and carbon make automotive choices very simple today, in the US. An Accord/Camry has no macro-environmental or macroeconomic advantage over a Malibu for an American buyer today. It’s quite the opposite: on environment and economics, a Malibu or anything like it has every advantage over any competing import or transplant, to an American buyer. If you’re buying on macro concerns, there is no rationale for buying a Toyota or Nissan pickup truck or SUV, nor any European luxury car.

Now, there may be some micro-economic arguments for the “away” team, and certainly some emotional ones. There’s no macroeconomic or environmental argument for buying a Maserati over a Cadillac, or a Ferrari over a Corvette, but some things just have to be had. However, advocates of regulation, taxation and other generalized instruments to bend the market to the will of a few would have more credibility if they were already making the macroeconomic and environmentally consistent choices elsewhere in their lives too. If you really think global warming is dangerous and human-induced, or that trade deficits are killing our economy, then micro concerns like how often you might risk taking a car for service over the next five years, depreciation, or piddling differences in plastics, would not be actionable.

But to some people the little things are actionable. Not directed to you specifically Pch, let’s have some consistency or back off the reflex for taxation.

Phil

You mentioned the trade deficit. I’m sticking to the subject of the trade deficit.

Imported goods increase the trade deficit. Who the importer is doesn’t matter, the trade deficit goes up by the same amount.

In respect to cars, the less domestic parts content, the more that the car contributes to the trade deficit. If assembled outside the US, that contributes to the trade deficit.

That’s it. The company that sells the car does not change the mathematical formula used to calculate the trade deficit generated by the importation. Period.

End result: If the goal is to reduce the trade deficit, then the solution is to buy a car assembled in the US with US parts. The company that makes the vehicle does not change the amount that is contributed to the trade deficit.

Likewise, buying a car from a “domestic” does not ensure that it won’t contribute to the trade deficit. If it is a Big 2.8 car built outside the US is sold here, then it increases the trade deficit.

You might believe that there are other reasons to buy domestic cars. But those reasons are not the topic of this thread.

Ow, my ears. What’s that distortion? I didn’t in any part of my post claim that who imports a foreign-produced item changes contribution to the trade deficit.

Goods manufactured inside the United States do not increase the trade deficit, but to the extent that they use imported components. Period. Who makes them does not change their contribution to the trade deficit.

Nor did I say anything counter to this. Transplants use significant imported parts, and the imported parts tend to be high-value components. Moreover, what’s not included is the imported engineering value that resides elsewhere.

My priority is domestic economic health and its role as an engine for global economic and political stability. The three domestic auto companies are just beneficiaries of that agenda, not the focus.

The Pontiac G8 uses American drivetrain components which are high value. And the return of profits to domestic HQ companies gives its purchase added economic leverage over pure imports, outside the limited trade deficit discussion. This is even more applicable in the Fusion case, with its 50% domestic content and NAFTA production, relative to the Aussie.

Phil

I’m sorry, but this is wrong, and you are trying to change the subject.

The definition of a trade deficit is very clear. Goods manufactured outside of the United States that are then imported to the United States increase the trade deficit. Period. Who imports them does not change their contribution to the trade deficit.

Goods manufactured inside the United States do not increase the trade deficit, but to the extent that they use imported components. Period. Who makes them does not change their contribution to the trade deficit.

If your focus was genuinely on the trade deficit, then your emphasis would be on parts content and point of assembly, because those items are what comprise the trade deficit. The fact that it is not makes it clear that your agenda is to advance the fate of three specific companies, and not on the trade deficit. That’s within your right, but don’t claim that you are prioritizing the trade deficit with your preferences when your positions state otherwise.

While your very last sentence is often (not always) true, the rest of it is not.

First, of all the domestic brand alternatives to Honda and Toyota transplants, you cited the ones with the least leverage, and only two at that. A more inclusive survey changes the picture. Toyota and Honda’s American production involves significant imported parts from outside a free trade zone. Compared to alternatives that are domestically produced, they add to the trade deficit. The Fusion is a nuanced case where the strict financial accounting lands it in a grey area of domestic economic desirability, but when all the social factors are counted, its purchase by an American outleverages the purchase of a transplant.

The Pontiac G8 won’t sell in enough volume to be a factor, but if it happened to succeed wildly and displace most BMW 5-series, Mercedes E class and other similar size rear-drive true imports, then despite its Aussie lineage would be a net economic gain for Americans.

Phil

The blunt answer is that taxes on energy do not make energy markets less volatile. Americans tend to be psychologically sensitive to these occasional price shocks because energy is more affordable here relative to other industrial countries, so the price run-ups tend to be a larger percentage gain than in Europe or Japan, where taxes represent a higher percentage of fuel net costs. The nuanced answer is, it depends on the purpose of the tax proceeds. I am opposed to further taxing gasoline (or carbon emissions) as a general policy reflex, but might back a more developed and specific proposal.

For instance, if we’re really serious about reducing gasoline consumption, then raising taxes to accelerate road repairs, new road construction, expand smart and coordinated digital control of traffic signals in cities, rebuild (and perhaps reduce) freeway on and off ramps, can make sense. We’re a growing country, so the number of people driving and the number of cars in use is not going to decline anytime soon. So relieving bottlenecks, reducing traffic congestion and slashing engine idling or creep at single-digit speeds will in the aggregate achieve real fuel savings, while the general trend toward greater vehicle efficiency in all classes continues.

Similarly, I might support a further gasoline tax that directly subsidizes residential and business rooftop solar installations, or funds accelerated fixed-location carbon sequestering and clean coal initiatives.

Just as when I evaluate a new company for funding and need to understand proposed use of funds, tell me *exactly* what the added tax is going to be used for, commit to legally binding use of funds generated, and establish pertinence to the problems at hand. Just don’t try to solve everything at once. And don’t direct the tax flow into the general fund with no accountability for use. And how about an expiration date for the tax?

Anyone who visited Europe in the past ten years could see quite clearly that taxing energy had no effect on the desirability of SUVs, heavy large sedans and high-performance sports cars among people who could afford them and their running costs. What’s the difference between a Range Rover or Mercedes GL in Europe and an Escalade in the US? From a carbon footprint, none worth mentioning; the current Escalade might even win. Expensive fuel has made mass market small cars mainstream vehicles in Europe, but as soon as people can afford to “graduate” out of them, they move to inefficient vehicle types, including premium automobiles. If you dislike SUVs, then you also have to advocate killing the entire German, Italian and British idea of a luxury or sports car.

EVERY premium automobile is a pig relative to what it could be. Weight is the enemy. Between escalating safety requirements and pampering features, sheer dumb bulk is bloating modern cars, which in turn boosts power requirements to maintain perceived necessary performance, which truncates progress on fuel efficiency.

Not to mention that too few people take a holistic view of the energy consequences of their purchasing. If you’re in the US or Canada, that BMW 5 or 7 Series or Lexus LS takes more energy to ship to you than does the Cadillac STS you could have bought. Your Prius was shipped to the US on a dirty diesel cargo vessel, already in the environmental “red” for its bigger footprint of “brought-to-market” consequences, and its NiMH batteries set off a whirlwind of global raw materials procurement, shipping, processing, shipping and manufacturing that also seriously compromises the environmental purity you imagined in your purchase, compared to if you had just bought a high mileage gasoline compact made in your home market.

The point is, most of the environmental, economic and political agenda that favors further taxation of gasoline in the US is undermined by the insincerity of proponents as evidenced by the choices they could be making to more easily mitigate their variously favored crises, but don’t. Meanwhile, making personal mobility more expensive only inflicts economic harm on individuals least able to absorb the cost, and reduces the US’ aggregate economic adaptability. Again, globally and throughout time, personal mobility is and has been a generator of wealth, betterment and, by extension, a progressively cleaner environment. Taxing gasoline without explicit and guaranteed transfer of the funds to initiatives that directly solve agreed-upon problems will only retard progress against the various crises that alarm you.

Phil

I think that we’ve covered in other discussions that Mr. Ressler’s definition of an American car doesn’t correlate with what produces trade deficits.

Most of the Honda Accords and Toyota Camrys that Mr. Ressler would discourage you from buying do not increase the trade deficit, as the parts and labor that are used to build them are largely sourced from the US. Meanwhile, the Ford Fusion and Pontiac G8 that he would prefer would increase the trade deficit, as they are built abroad. Trade deficits are not affected in any way by the badge affixed to the trunk lid.

Brownie,

We are in synch on the need to address the demand side with conservation/efficiency. But I do’nt know where you get this 700GW figure for nuclear in the US. There are only 100GW of nuclear in the US. And wind is far outstripping nuclear in terms of what’s been built in the last few years. I’m pretty sure I covered that in here:

http://www.ehponline.org/docs/2007/115-7/innovations-abs.html

Too many comments for me to read all the way thru while at work, but this is the best comment I’ve seen on TTAC in a long time. Kudos.

Nuclear Costs and Prospects – DOE

Sumary: For new, previously uncommercialized but promising designs, it’s about a buck per watt in capital for a nuke. If all goes according to plan. The designs of a couple decades ago were projected to be about a buck-fifty per watt but turned out to cost as much as four bucks per watt.

From the article: “According to a number of workshop participants, the financial community clearly has not completely discounted the cost overruns that occurred in the 1970s and 1980s. Thus, all the participants agreed that the nuclear industry must demonstrate that a nuclear power plant can be built on time and on budget. Further, the new licensing process has yet to be tested, and there is considerable uncertainty about how it will work. In fact, all the participants agreed that some type of support from a third party (the Federal Government) would be needed before the first few plants could be built.”

Other problems are noted.

We may be rapidly approaching the point where solar photovoltaics reach $1/peak watt installed. If we go solar, we are left with a cyclic generation/peaky demand problem to solve, but there are approaches to resolving this.

I believe wind power is available for less than a buck per watt in capital cost (it’s something like $.05/kwh on the market – one of the cheapest sources of electricity – ummm… when it’s windy).

Also, nuclear still has that 10 year lead time. Buy a solar panel and you’ve got it on line in a month or two. Ditto a windmill. Ditto a conservation effort. In the ’80’s, it was recognized that conservation efforts actually had the best payoff of any option and utilities began to promote them with rebates and other incentives (which paid off for the utilities in avoided capital cost of new generation capacity).

The electric power industry and the financial markets don’t like large, long-term risky investments. This is why lots of nukes aren’t racing through the process.

As it happens, I like nuclear power. But it has considerable problems… We must resolve the waste storage issues before we build more plants. There are safety concerns. There’s huge NIMBY issues. Nukes need water.

I think we can go a very long way on solar and wind.

—

Bluecon, it’s a global issue. Busbodger was pointing out another aspect of the global pattern.

FYI, “The Simpsons” have been forbidden in my house since Episode Two.

As for the current winter being, in your words, “very cold below normal weather,” the current winter has, so far, been 16th warmest on record. Yes, we had quite a bit of snow. Hey, snow happens.

First, I’m generally considered in my daily life to be one of those know-nothing liberals, so I don’t know what you’re trying to say.

Second, you completely missed my point – I’m saying there is NO WAY we can build enough nuclear generation (or any one form of power generation) to meaningfully reduce our fossil fuel consumption. We are already BY FAR the largest nuclear power producer in the world; most people don’t realize that. Which brings me to:

Third, on what planet has wind supplanted nuclear? There is less than 100GW of installed wind generation worldwide; there is roughly 700GW of installed nuclear generation in the US alone. Alternative energy is great – I’m all for it. Just don’t kid yourself that it will make a serious dent in our domestic energy needs.

And that is my main point, which you missed entirely: the only way to make an immediate impact on US energy needs is to address the demand side of the equation, by encouraging conservation. With things like gas taxes.

http://news.bbc.co.uk/2/hi/science/nature/7313264.stm”

There is a difference between the Artic which is right now suffering under very cold below normal weather and the Antarctic which has just finished the summer season.

Do you guys learn everything from the Simpsons?

As to why reducing consumption, well, oil does have a finite supply. Global warming may or may not be a “crock of shit” but why take the risk of damaging our environment further? Let’s try to think about our descendants. After all, genetically speaking, that’s the only reason we’re here.

Basic bio – something has to process your poop out of your environment just as fast as you poop into your environment or you run into trouble. CO2 is just one of our many flavors of poop.

Whether or not I believed in the AGW hypothesis, I’d be opposed to drilling in the ANWR, because it’s a “run out of oil first” plan which would be a huge strategic mistake.

—

Bluecon mentioned the Arctic ice shelf came back… Of course it did. The pond across the street froze over, too, but that doesn’t mean it won’t be gone in June. Or, at the rate things are going, tomorrow. The refreeze of the Arctic ice shelf will happen right away but it won’t achieve the thickness it had when it was sustained through thousands of summers. It will go again, pretty quickly, every year.

This is important because without the ice sustained over Arctic Summer to reflect the sun’s rays back into space, the Arctic ocean will be absorb them and likely do quite a bit of heating over the summer.

It’s also a staple of “skeptic” AGW “science” that Antarctic ice is getting thicker. I don’t know where they get that idea, that is not the case. It’s melting, too.

GRACE Mission – Antarctic Ice Melting

I call Bullshit.

Please tell us about a huge tax cut, incentive, or subsidy for oil companies. Please? Just one.

Yes, I think we all realize the association of environmentalism and oil conservation. What we don’t agree on is that conservatives are against conservation, or that they are the bunch of boobs that you would like to characterize them as.

Plenty of conservatives are conservationists. Bigger and better is not a conservative ideal by any stretch of the imagination. Perhaps we should compare the homes and lifestyles of conservative leaders vs. those of the liberal leadership?

step 3 – only import oil from canada and mexico – screw the commies, arabs. and south americans.

The US, Mexico and Canada consume more than 25 million barrels per day. They supply about 15 million barrels per day. So it’s a great idea, except you’re about 10 million barrels per day short.

The sheiks won’t mind, because the rest of the world that needs another 60 million barrels per day will buy what they need from the usual suspects. They really don’t care who buys it, just so long as the checks clear.