Fear of Clowns

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- H. L. Mencken
gozz@gozz.com

Tuesday, February 14, 2006

Energy solution: make oil companies more profitable 

What a stupid idea,

NEW YORK (Reuters) - The government may waive up to $7 billion in royalty payments from companies pumping oil and natural gas on federal territory in the next five years, the New York Times reported on Tuesday, citing administration officials and budget documents.

The royalty relief would amount to one of the biggest giveaways of oil and gas in U.S. history, even though the administration assumes oil prices will remain above $50 a barrel throughout that period, the Times report said.

This would be analogous to lowering taxes for the richest Americans to deal with skyrocketing salaries of CEOs. Oh, wait, we actually tried that ...

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Comments:

Of course, those poor, abused oil companies need more ways to save. Exxon's record profits in the last quarter are just a sympton of how undernurished the oil companies really are. I think this is just a way of rewarding them for all the help they have given the poor in this country to heat their homes - oh wait that was help from that commie Chavez.
Your ignorance of economics is astounding!
Beth -

Aren't you a free-marketer?

How does giving financial incentives to companies which already can't meet demand help anyone?
So that they can meet demand.
Do you believe that the reserves should be used to keep supplies available and costs to consumers down?
How would making energy companies even more profitable help them meet demand?

And no, I don't think the strategic reserves should be tapped for the purpose of controlling prices. Do you?
I do not want to make oil companies make more profits, I want them to have so much oil that they have to sell it for less to the consumers!

And I do agree, we should not touch reserves.

Did I say I agree with you??
The things are that:

- Oil companies are awash in profits
- The supply is limited by infrastructure - what can be pumped out of the ground as well as refined

Now, if government artificially raises their profit margins by not charging royalties for oil and gas pumped from our public lands, how does that help anyone but the oil company's shareholders?
Question - are these public lands untapped?
The $7 billion dollars are royalties on oil and gas they're already pumping out. Royalty payments to us, the lessors.
I got the impression that the purpose was an incentive for exploration.

 

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