YellowLinesandArmadillos Posted February 14, 2006 Share Posted February 14, 2006 http://www.nytimes.com/2006/02/14/business...artner=homepage "WASHINGTON, Feb. 13 — The federal government is on the verge of one of the biggest giveaways of oil and gas in American history, worth an estimated $7 billion over five years. New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government." And to think it can't get any worse, this Administration's idiocy is unbelievable. Link to comment Share on other sites More sharing options...
Kelly the Dog Posted February 14, 2006 Share Posted February 14, 2006 http://www.nytimes.com/2006/02/14/business...artner=homepage "WASHINGTON, Feb. 13 — The federal government is on the verge of one of the biggest giveaways of oil and gas in American history, worth an estimated $7 billion over five years. New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government." And to think it can't get any worse, this Administration's idiocy is unbelievable. 602859[/snapback] Didn't that start in the Clinton years? Link to comment Share on other sites More sharing options...
YellowLinesandArmadillos Posted February 14, 2006 Author Share Posted February 14, 2006 Didn't that start in the Clinton years? 602864[/snapback] No, this has been going for a lot longer, but Clinton tried to increase the royalty payments and was shot down by Congress and then changed to provide relief, don't remember when it was taken to zero royalties. Obviously, it occurred under Clinton in 96, but notice is said legislatively. Be interesting to find out the full story behind the original leg, but I seem to remember there being relief prior to 1996 under Reagan. Don't know what form though. Link to comment Share on other sites More sharing options...
VABills Posted February 14, 2006 Share Posted February 14, 2006 Didn't that start in the Clinton years? 602864[/snapback] Might have even been prior to that, but it's been a while. The one question I have is will this government be able to pass the building of refineries on closing down military bases, limiting the licensing approvals from 12+ years to months. Link to comment Share on other sites More sharing options...
KRC Posted February 14, 2006 Share Posted February 14, 2006 Didn't that start in the Clinton years? 602864[/snapback] It started before Clinton, thereby making it W's fault. Link to comment Share on other sites More sharing options...
GG Posted February 14, 2006 Share Posted February 14, 2006 And because the end product is not taxed at all. Link to comment Share on other sites More sharing options...
Fan in Chicago Posted February 14, 2006 Share Posted February 14, 2006 http://www.nytimes.com/2006/02/14/business...artner=homepage "WASHINGTON, Feb. 13 — The federal government is on the verge of one of the biggest giveaways of oil and gas in American history, worth an estimated $7 billion over five years. New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government." And to think it can't get any worse, this Administration's idiocy is unbelievable. 602859[/snapback] I am a bit confused. First it says that royalty relief triggers stop at oil prices above $35 but were waived for leases granted in 1998 and 1999. That means leases granted before or after that would still be subject to royalties if oil is above $35. Then the article calculates the loss of royalties based on $65 billion worth of oil and gas. For this value to be true, a heckuva lot of licenses must have been granted in 1998-99 and those wells must be incredibly productive. I cannot believe this is true. Something in the NYT calculations is askew. I am a oil industry apologist normally, but this time I am with the philosophy of the article that the industry should get no sops for exploration and production of both oil or gas as the robust demand will let them reap a lot of money anyway. No reason to help them out. Actually I don't agree with the sops even at prices below $35/barrel but that is a different argument. Link to comment Share on other sites More sharing options...
Fan in Chicago Posted February 14, 2006 Share Posted February 14, 2006 And because the end product is not taxed at all. 602879[/snapback] Not a valid argument - raw material is taxed and so is any end product so no reason why oil and gas out of the ground should be any different. Link to comment Share on other sites More sharing options...
pdh1 Posted February 14, 2006 Share Posted February 14, 2006 http://www.nytimes.com/2006/02/14/business...artner=homepage "WASHINGTON, Feb. 13 — The federal government is on the verge of one of the biggest giveaways of oil and gas in American history, worth an estimated $7 billion over five years. New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government." And to think it can't get any worse, this Administration's idiocy is unbelievable. 602859[/snapback] "Despite record profits, the oil industry is set to skip out on $7 billion in royalty payments it would normally pay for drilling on government land thanks to a '90s era law designed to promote domestic production, according to a report published Tuesday." Reminds me of the protesters today yelling "Death to America" and "Death to Jews" over the cartoons that were not published in America or were they drawn by Jews. Go figure. Link to comment Share on other sites More sharing options...
YellowLinesandArmadillos Posted February 14, 2006 Author Share Posted February 14, 2006 I am a bit confused.First it says that royalty relief triggers stop at oil prices above $35 but were waived for leases granted in 1998 and 1999. That means leases granted before or after that would still be subject to royalties if oil is above $35. Then the article calculates the loss of royalties based on $65 billion worth of oil and gas. For this value to be true, a heckuva lot of licenses must have been granted in 1998-99 and those wells must be incredibly productive. I cannot believe this is true. Something in the NYT calculations is askew. I am a oil industry apologist normally, but this time I am with the philosophy of the article that the industry should get no sops for exploration and production of both oil or gas as the robust demand will let them reap a lot of money anyway. No reason to help them out. Actually I don't agree with the sops even at prices below $35/barrel but that is a different argument. 602883[/snapback] According to the article a legislative exception was made for deep water drilling in the Carribean? Therefore, there is no price trigger. Otherwise the $35/barrel applies. But, apparently a lot of oil is coming on line from deep water exploration started during this time. Link to comment Share on other sites More sharing options...
stuckincincy Posted February 14, 2006 Share Posted February 14, 2006 Lucky Al Gore, what with his considerable holdings in Oxy Petroleum. Link to comment Share on other sites More sharing options...
TPS Posted February 14, 2006 Share Posted February 14, 2006 And because the end product is not taxed at all. 602879[/snapback] Let's see we tax it at the level of consumption because it creates negative externalities (smog, global warming, etc.), but we subsidize its production. Doesn't seem to make a lot of sense, unless of course Haliburton benefits somehow... Link to comment Share on other sites More sharing options...
Pine Barrens Mafia Posted February 14, 2006 Share Posted February 14, 2006 Let's see we tax it at the level of consumption because it creates negative externalities (smog, global warming, etc.), but we subsidize its production. Doesn't seem to make a lot of sense, unless of course Haliburton benefits somehow... 603070[/snapback] Link to comment Share on other sites More sharing options...
Alaska Darin Posted February 15, 2006 Share Posted February 15, 2006 So Republicans give away a ridiculous amount of money to energy companies and Democrats give away ridiculous amounts of cash to corporate farmers like Ted Turner. Business as usual for you big government apologists. Link to comment Share on other sites More sharing options...
YellowLinesandArmadillos Posted February 15, 2006 Author Share Posted February 15, 2006 So Republicans give away a ridiculous amount of money to energy companies and Democrats give away ridiculous amounts of cash to corporate farmers like Ted Turner. Business as usual for you big government apologists. 603503[/snapback] Now you got it, DC politics in a nutshell, except there always a few on the other side getting bribes...uh, contributions to make it bipartisan. Link to comment Share on other sites More sharing options...
bills_fan Posted February 15, 2006 Share Posted February 15, 2006 My understanding of this is that it started way back during the Reagan years. The prices of oil and gas were low and the companies did not have the extra profits to exploration and building of new fields and rigs. The incentive was to promote reducing our dependency on foreign oil by finding new domestic sources. The companies were allowed an offset (royalties) as long as the profits were used for exploration and building new facilities. Some of those facilities are just now coming on line. Sadly, refineries were not included in the bill. Link to comment Share on other sites More sharing options...
Alaska Darin Posted February 15, 2006 Share Posted February 15, 2006 Now you got it, DC politics in a nutshell, except there always a few on the other side getting bribes...uh, contributions to make it bipartisan. 603516[/snapback] I've always had it. YOU'RE one of the big government apologists. Link to comment Share on other sites More sharing options...
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