Some of the best solar methods are based on using sun power to heat water - often to drive a turbine (just like how fossil fuel and nuclear plants do) - but these tend to work better on a small scale (I saw direct solar heatin for domestic water heating over 10 years ago in the UK) or in areas of reliable sun (the Sahara, as in the film, Sahara)

ray

Can you tell us what these subsidies (enormous or otherwise) are so that we can evaluate the truthiness of your statement

?

http://priceofoil.org/wp-content/upload ... cFlyer.pdf

Depending on the source betwen 10 to 52 billion dollars worth of subsidies...
in the first quarter of 2011 US oil companies had profits of 38 billion.
It might be that on a per energy unit delivered this is a small subsidy. But thats a nonsequitar.
Why should an established profitable industry sector receive subsidies when they are as profitable as noted..?

What would happen if Babe Ruth was in his prime and had a 60 mile an hour "fastball" thrown right over the middle of the plate?

Stay tuned for RJ's response.

rickyp wrote:ray

Can you tell us what these subsidies (enormous or otherwise) are so that we can evaluate the truthiness of your statement

?

http://priceofoil.org/wp-content/upload ... cFlyer.pdf

Depending on the source betwen 10 to 52 billion dollars worth of subsidies...
in the first quarter of 2011 US oil companies had profits of 38 billion.
It might be that on a per energy unit delivered this is a small subsidy. But thats a nonsequitar.
Why should an established profitable industry sector receive subsidies when they are as profitable as noted..?

It's more of a spit ball.

So if you drill past the flyer (and add some cookies to your computer) you can get to the OECD report, which seemed like the most reputable source to me, and well worth the read. Their $10 billion includes $2 billion of state subsidies, $3.5 billion for low income housing assistance, $1 billion for farmer fuel tax exemptions (in other words, farmers don't have to pay the excise tax because they don't use the national highways that the excise tax is supposed to fund), $1 billion for the strategic petroleum reserve, and lots of tax deductions that are often enjoyed by other companies, and may or may not be subsidies depending on your view and knowledge of the tax code.

Just to be clear, I am in general against subsidies to private companies. But what is most interesting here is that the media and Ricky are willing to maintain a position (oil companies enjoy enormous subsidies), to build on that position, all without really understanding what that position entails.

ray

So if you drill past the flyer (and add some cookies to your computer) you can get to the OECD report, which seemed like the most reputable source to me, and well worth the read. Their $10 billion includes $2 billion of state subsidies, $3.5 billion for low income housing assistance, $1 billion for farmer fuel tax exemptions (in other words, farmers don't have to pay the excise tax because they don't use the national highways that the excise tax is supposed to fund), $1 billion for the strategic petroleum reserve, and lots of tax deductions that are often enjoyed by other companies, and may or may not be subsidies depending on your view and knowledge of the tax code

However you want to dress these up, they still constitute a government interference in a "pure market". And when you drill down, even further than the OECD report the nature of the subsidies becomes even more questionable. I think it’s fair to question why the subsidies on farm fuel (The tax exemptions) are said to be supportive of the oil industry when they really don't. They support, disproportionally, major agricultural industries. (Because they represent such a large percentage of agricultural production). The question that should be asked about the continuance of the farm fuel tax exemption is why>? What justifies its continuance? Aren't the costs of the externalities of fuel consumption created equally by farm consumption versus city consumption?
I'm not saying a case can't be made that the tax exemption shouldn’t exist, I'm not really sure, but I do know that Big Agra is probably the main beneficiary of the exemption rather than small farmers...
I am however suggesting that there probably hasn't been a debate about this tax exemption for years....

The ease with which conservatives both attack the idea of investment in early stage development of new energy sources.... and yet defend the coterie of tax exemptions (a subsidy) and investments that continue in oil is not entirely surprising... In the OECD report you'll note that in 200 there was a tax credit of 240 million for investment in Clean Coal... Now, if that were an investment in solar or new battery technology .... it would be under the microscope. But because it is in coal....you've never heard much about this I'll bet.
BTW, maybe the investment is worthwhile? Since its a tax credit, I doubt we'll ever actually know what it represents. What constitutes activity in Clean Coal to qualify for this tax break.
The advantage of a direct investment in an early stage industry is that the government as an entity watches the investment directly. Tax credits .... not so opaque.
Usually conservative claim they want to clean up and simplify the tax code. I'd suggest that any tax rule that has been in place for more than a decade, who's original intent was the development OR protection of an industrial sector needs review and requalification. Every tax exemption changes the market.
I'll concede that some of the labelling done by critics of Big Oil, is wrong. Some of the "subsidies" are actually of other industries and some are "security costs" (The Oil reserve.) that shouldn't be labelled thus.
But there's still enough left over for several dozen Soylndra type failures... (Not justifying that boondoggle, just comparing the size.) And more importantly, a consistent approach to "industry subsidization" would serve the proponents.
Years ago, the US government invested directly in the development of frakking. And although there are concerns about the ultimate cost (pollution or local geological disruption) frakking has been largely responsible for the lowered costs for natural gas in North America. If we have similar successes in any of the other investments (solar, battery technology) then the small cost of the initial investment will pay off just as the early stage investment in frakking has....
The parallel I draw to the continued oil tax exemptions, is that frakking doesn't continue to enjoy significant tax or direct investments. (As shown in the OECD summaries) The technology has evolved and is a sustaining part of the industry...

rickyp wrote:The ease with which conservatives both attack the idea of investment in early stage development of new energy sources.... and yet defend the coterie of tax exemptions (a subsidy) and investments that continue in oil is not entirely surprising... In the OECD report you'll note that in 200 there was a tax credit of 240 million for investment in Clean Coal... Now, if that were an investment in solar or new battery technology .... it would be under the microscope. But because it is in coal....you've never heard much about this I'll bet.

That's about as breathlessly dishonest as any post I've ever read.

Again and again in these forums, conservatives have said, "Do away with all subsidies."

We're not against "investment in early stage development of new energy sources." We just think it should be, for the most part, private investment. If the technology is good, it will go forward on its own merit. On the other hand, if the market has deemed it a failure or to have a likelihood of failure (think Solyndra), why should taxpayer money be risked?

$240M for Clean Coal? We wasted more than that on Solyndra. Coal, on the other hand, is something we have in abundance. If we could find a way to use it in a manner than impacts the environment in the least detrimental way, that is a guaranteed return, is it not?

That said, I would be MORE than willing to get rid of it if we could also get rid of all of the President's "investments."

So the pattern is that Ricky makes a claim ... he's asked for data to support it ... someone actually reads the data that he provides which shows him to be incorrect ... he then revises his claim and uses it as a launching pad to attack conservatives and Republicans, and spouts some more views. It's a pretty sorry state of affairs. The reality is that I meet liberals all the time who make good arguments. Ricky is not one of them. Perhaps he is being funded by the Heritage Foundation as a secret weapon.

Ricky:

The parallel I draw to the continued oil tax exemptions, is that frakking doesn't continue to enjoy significant tax or direct investments. (As shown in the OECD summaries) .

Just on this detail, I don't agree. The so called subsidies for natural gas ($6 billion) exceed those for oil ($4 billion). Some of the natural gas amounts are for depreciation and depletion for exploration which is related to the fracking boom. in other words, fracking is enjoying similar tax rules as big oil. Whether tax deductions are truly subsidies is another question. Also, the data only estimates 2010, and does not include 2011 and 2012, years in which fracking has taken off.

On this detail:

In the OECD report you'll note that in 200 there was a tax credit of 240 million for investment in Clean Coal... Now, if that were an investment in solar or new battery technology .... it would be under the microscope. But because it is in coal....you've never heard much about this I'll bet.
BTW, maybe the investment is worthwhile? Since its a tax credit, I doubt we'll ever actually know what it represents. What constitutes activity in Clean Coal to qualify for this tax break.

http://online.wsj.com/article/SB1000142 ... lenews_wsj

The Obama administration Thursday awarded $1 billion to an Illinois project that aims to sharply reduce greenhouse-gas emissions from coal-fired power plants, the latest in a long-running saga aimed at proving coal's viability amid widespread pressure to combat climate change.

The new project, known as "FutureGen 2.0," replaces an earlier plan to build a first-of-a kind, "clean coal" power plant in Illinois using a different technology. Supporters of the latest version say it will create jobs and reduce greenhouse-gas pollution. Opponents contend it is a waste of money and thinly veiled reward for President Barack Obama's home state.

Bush also supported clean coal investments.

I do think there is a case to be made for investments in clean coal. Coal clearly contributes to global warming and it would be cool if we could figure out a way to use it without dirtying the environment. Unfortunately the way to get there is through the sausage machine.

ray
I do think there is a case to be made for investments in clean coal. Coal clearly contributes to global warming and it would be cool if we could figure out a way to use it without dirtying the environment. Unfortunately the way to get there is through the sausage machine

I do too. But Tom Coburn, thinks that the investment isn't worth anything. If the investment was made by Bush, what would Tom say?
Which makes my point better than I did. It doesn't really matter about the objective purpose for the investment or subsidy so much as who is the proponent...

from your source:

The decision drew criticism from Sen. Tom Coburn, the Oklahoma Republican, who said it "appears to have more to do with politics and geography than science." He added: "Taxpayers are being forced to finance the largest pork-barrel project in our nation's history with borrowed money."

ray

Whether tax deductions are truly subsidies is another question.

What else would you call them? Its a reduced expense to the corporation for the expressed purpose of reward a specific activity in order to promote that activity.

ray

Just on this detail, I don't agree. The so called subsidies for natural gas ($6 billion) exceed those for oil ($4 billion). Some of the natural gas amounts are for depreciation and depletion for exploration which is related to the fracking boom. in other words, fracking is enjoying similar tax rules as big oil

You sure about that?
The Section 29 tax credit for unconventional gas incentivized shale gas drilling from 1980 until 2000, right after George Mitchell successfully cracked the Barnett in Texas.
source:
http://thebreakthrough.org/blog/2012/03 ... _and.shtml

Ricky:

ray

I do think there is a case to be made for investments in clean coal. Coal clearly contributes to global warming and it would be cool if we could figure out a way to use it without dirtying the environment. Unfortunately the way to get there is through the sausage machine

I do too. But Tom Coburn, thinks that the investment isn't worth anything. If the investment was made by Bush, what would Tom say?
Which makes my point better than I did. It doesn't really matter about the objective purpose for the investment or subsidy so much as who is the proponent...

from your source:

The decision drew criticism from Sen. Tom Coburn, the Oklahoma Republican, who said it "appears to have more to do with politics and geography than science." He added: "Taxpayers are being forced to finance the largest pork-barrel project in our nation's history with borrowed money."

I have a great deal of respect for Coburn. He's not the heartless bastard that some make him out to be. He's actually one of the most consistent and honest Senators around. I recently saw Coburn on The Daily Show, and he was remarkably even handed in his approach.

Many people feel that clean coal is so tough technologically that it isn't worth the spending. I don't know enough about these topics to take a view.

Edited to add the link to Coburn's interview on The Daily Show

http://www.thedailyshow.com/watch/wed-m ... view-pt--1

Ricky:

ray

Whether tax deductions are truly subsidies is another question.

What else would you call them? Its a reduced expense to the corporation for the expressed purpose of reward a specific activity in order to promote that activity.

All corporations get to deduct their expenses. The law allows oil and gas companies to deduct their intangible drilling costs, which seams reasonable to me, but is controversial to others. I see it as a cost of business that should be allowed to offset income. Also at issue is how quickly corporations get to write off large scale investments. Real estate is over about 30 years. Equipment can be from 3 to 7 years depending on the type. How quickly should oil and gas exploration machinery be written off? That's a very different animal than let's say paying an Illinois company $1 billion to research clean coal. Do you really not see the difference?

ricky:

You sure about that?

Yes; you appear to not be following my argument because I was not referring to the Section 29 credit. . Why don't you read what I actually wrote

All corporations get to deduct their expenses. The law allows oil and gas companies to deduct their intangible drilling costs, which seams reasonable to me, but is controversial to others. I see it as a cost of business that should be allowed to offset income.

Surely a 'cost of business' would be automatically factored into the tax liability anyway because it would reduce profits. Companies aren't taxed on revenues after all.

ray

Yes; you appear to not be following my argument because I was not referring to the Section 29 credit. . Why don't you read what I actually wrote

Oh I read what you wrote. I said that specific subsidies for frakking had stopped and you went on about general subsidies for All natural Gas production.
A nonsequitar.

Writing down the cost of drilling equipment more quickly is one small detail of the tax benefits offered to oil companies. Its intended purpose is to attract more oil companies to commence drilling based upon the assumption that the high cost of launching a drill site is a major impediment to whether or not the company makes use of a US lease....
And that amortizing the rig over two years instead of 10 is a game changer....that will cause US companies to take action on unused lease land....
If the subsidy IS working, there should be a track record of increased activity on all those unused lease lands. I can find complaints that the lease lands aren't being utilized, but no record that activity increased at any point.
Perhaps these tax regulations are old and have been in existence long since they were inacted, and outlived their use? Perhaps they never really had the impact they were intended .
I can point to the Frakking subsidies and government investment in frakking as "Short term" subsidies that had a specific purpose. And worked. And ended once the objective was met...
... If these oil tax breaks (subsidies) are working, or ever worked, it should be provable.
I suggest they've been in place for many years with no justification...
What tends to happen when lobbyists control the agendas...

Sassenach wrote:

All corporations get to deduct their expenses. The law allows oil and gas companies to deduct their intangible drilling costs, which seams reasonable to me, but is controversial to others. I see it as a cost of business that should be allowed to offset income.

Surely a 'cost of business' would be automatically factored into the tax liability anyway because it would reduce profits. Companies aren't taxed on revenues after all.

That's how I see it, but clearly there are many people complaining about these deductions by oil companies.

ricky:

ray

Yes; you appear to not be following my argument because I was not referring to the Section 29 credit. . Why don't you read what I actually wrote


Oh I read what you wrote. I said that specific subsidies for frakking had stopped and you went on about general subsidies for All natural Gas production.
A nonsequitar.

I can't even figure out what you are talking about?