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Obama to cut fossil fuel subsidies
New Zealand site; http://www.3news.co.nz/ ^ | 9/23/2009 | Assiciated Press

Posted on 09/23/2009 10:49:02 AM PDT by larry hagedon

This came over the AP, and was picked up by a New Zealand site. I have not yet located other sources.

Obama wants to end all Federal subsidies for petroleum. Most people do not realize that Petroleum has been massively subsidized for the past 50 years.

This will not affect state, county, city or township gasoline, heating oil and diesel fuel subsidies.


TOPICS: Business/Economy; Government
KEYWORDS: energy; fuel; petroleum; subsidy
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To: larry hagedon

This man is a threat to the Republic. It cannot be said more plainly.


21 posted on 09/23/2009 11:16:18 AM PDT by libh8er (If Karl Rove is 'turd blossom', Hussein is just turd.)
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To: aShepard

I’m not sure what you’re saying there. Lease costs should be depreciated completely over their lifetime just like any other capital investment. There’s nothing usual about that. The depletion allowance is a separate tax break, as far as I know.


22 posted on 09/23/2009 11:17:16 AM PDT by your local physicist (Gridlock is good...in Washington.)
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To: larry hagedon
The socialist strategy...

Tax and regulate a business until it is no longer a viable business model and reduce them to begging for subsidies or ‘targeted’ tax breaks.

Raises revenue and puts them under the governments heel, both coming and going.

23 posted on 09/23/2009 11:19:04 AM PDT by allmendream (Wealth is EARNED not distributed, so how could it be RE-distributed?)
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To: businessprofessor

It’s also a myth that oil companies make “windfall profits.” Their after-tax profit margins are well below the margins of many software, drug, and medical device companies. Oil companies get attacked by the left largely because they are located mainly in conservative states in the South and Southwest.


24 posted on 09/23/2009 11:24:11 AM PDT by your local physicist (Gridlock is good...in Washington.)
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To: larry hagedon

That makes a lot of sense. Subsidize petrolium and then tax the hell out of it. Giving out money with one hand and taking it back with the other.


25 posted on 09/23/2009 11:29:43 AM PDT by mbynack (Retired USAF SMSgt)
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To: your local physicist

.....................Lease costs should be depreciated completely over their lifetime just like any other capital investment........................

My understanding is that the successful lease purchase is capitalized, and the write off is not normal depreciation, but a depletion allowance, that is amortized in relation to the amount pumped to the total estimated reserves leased.

A series of dry wells enable tax deductible writeoff of the entire lease cost.


26 posted on 09/23/2009 11:32:04 AM PDT by aShepard
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To: aShepard

That sounds right, and it sounds like standard accounting for a capital asset such as a leased asset. They may use the term “depletion allowance” in oil accounting for this kind of amortization of a lease.

But I think there’s also a separate tax break called the “oil depletion allowance”. I pulled this definition from a financial website. This sounds more narrow of a definition than other stuff I’ve read on this subject:

OIL DEPLETION ALLOWANCE — An allowable (by congress) percentage of tax-free income that an investor in an oil and gas limited partnership can receive from the gross revenues generated by the sale of gas and oil from a producing property.


27 posted on 09/23/2009 11:43:12 AM PDT by your local physicist (Gridlock is good...in Washington.)
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To: aShepard

Actually you’re correct that it isn’t standard lease accounting. The basic concept is the same, but amortizing the lease based on the amount of oil produced each year is a special accounting method for the oil industry.


28 posted on 09/23/2009 11:45:09 AM PDT by your local physicist (Gridlock is good...in Washington.)
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To: oldskuulconserv
so he doesn’t support oil, coal, or natural gas. doesn’t support nuclear and won’t help solar or wind. what’s left?

Sweaters and shoe leather.

29 posted on 09/23/2009 11:49:24 AM PDT by P-Marlowe (LPFOKETT GAHCOEEP-w/o*)
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To: larry hagedon

In other words, he wants to increase taxes on heating our homes and getting to work. I guess since he’s from Hawaii he doesn’t understand that.


30 posted on 09/23/2009 12:02:48 PM PDT by mvpel (Michael Pelletier)
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To: larry hagedon

***Obama wants to end all Federal subsidies for petroleum***

Does this mean that Mexico and Brazil will not get US tax money for exploration?


31 posted on 09/23/2009 12:38:43 PM PDT by Ruy Dias de Bivar (That's reicest you dirty rat dog Reicest you! Reicest I say! I gonna cutchu boy!)
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To: larry hagedon

“This will not affect state, county, city or township gasoline, heating oil and diesel fuel subsidies.”

It will depend on the form of the “subsidy”.

If a state, county, city or township is giving a “subsidy” to fossil fuel enterprises, sure they can keep them set at their current rates, if they choose.

But that is a minority of the type of “fossil fuel subsidies” involving state, county, city and township governments.

It will increase the tax-payers cost for “subsidies” for state, county, city or township governments when they have to pay higher prices for the fossil fuel products that have been subsidized to them and/or that they are subsidizing for their constituents, for fossil fuel products whose new prices will reflect the loss of their federal “subsidies”.


32 posted on 09/23/2009 1:25:36 PM PDT by Wuli
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To: P-Marlowe
Jimmy Carter says:



Just wear a sweater.
33 posted on 09/23/2009 1:37:07 PM PDT by khnyny (At least in the US we give our idiots an education, a suit and a speech writer)
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To: larry hagedon
"Eliminating those would provide "a significant down payment" toward the US goal of cutting fossil fuel emissions in half by 2050, Froman said......"The Organisation for Economic Cooperation and Development said in a report last week that removing fossil fuel subsidies could reduce greenhouse gas emissions by more than 10 percent in 2050."

Who, with a rational mind, calls a "reduction of greenhouse gas emissions" at the rate of 00.25 percent a year (a mere ten percent over a total of forty years) a "significant down payment"?

No one. So, in spite of the rhetorical language that Obama used, the factual information amounts to a minuscule so-called "down payment".

And is it worth it??

"In the US alone, the federal government gave US$72 billion in subsidies to the fossil fuel industry between 2002 and 2008, according to a study by the Environmental Law Institute."

Yes true. Is it significant? $72 billion over six years amounts to $12 billion a year - TO THE ENTIRE FOSSIL FUEL INDUSTRY.

Yet Exxon-Mobile alone payed $116.2 billion in taxes in 2008 alone - all by itself.

As usual, Obama is pandering to the ignorant and offering a smokescreen of snake oil that will never deliver a significant reduction in "green gas emissions" or greater energy security.

34 posted on 09/23/2009 1:46:48 PM PDT by Wuli
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To: Wuli
It will increase the tax-payers cost for “subsidies” for state, county, city or township governments when they have to pay higher prices for the fossil fuel products that have been subsidized to them and/or that they are subsidizing for their constituents, for fossil fuel products whose new prices will reflect the loss of their federal “subsidies”.

It will also affect state pension plans, such as CalPERS and others which have multi-billion dollar investments in companies like Exxon-Mobil, Conoco-Phillips, etc. This will lead to higher state and local taxes to offset the loss of pension fund equity.

35 posted on 09/23/2009 3:03:47 PM PDT by mvpel (Michael Pelletier)
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To: rightwingextremist1776
All subsidies should end...Obozo is right with this one....

How about GM or the banks or ACORN or milk price supports or farm subsidies or ..... substitute your favorite here.

Who gets to decide which businesses are subsidized and which are not? I would agree with you if all subsidies were repealed but who decides? This is one of those areas that government is better staying out of just like it would have been better to stay out of GM.

This is nothing more than pandering to his lunatic "big oil is evil" constituency and the greens.

36 posted on 09/23/2009 3:16:23 PM PDT by johniegrad
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To: mvpel

“It will also affect state pension plans, such as CalPERS and others which have multi-billion dollar investments in companies like Exxon-Mobil, Conoco-Phillips, etc. This will lead to higher state and local taxes to offset the loss of pension fund equity.”

Also true.

There is a post-response from a few weeks ago that I still need to respond to. It was posted from someone in France who was complaining about all the profits that go to the “shareholders” - in the form of dividends and equity value - when instead lower-prices should be going to the consumer - the person from France was explaining. I wanted to ask them where their pension/retirement plan money was invested, and if shareholders were not compensated and prices simply lowered, from where would the company build new capital to keep improving its business? I think that poster called it “shareholder greed”.

If all a company gets back from its prices is simply today’s costs, its continuing-to-age-capital (plant and equipment) eventually kill the business, when they die, for lack of profit to invest in tomorrow. Rewarding investors and being able to borrow - having profits (retained earnings above expenses), means you are running a business and not a dead-end operation.


37 posted on 09/23/2009 4:21:23 PM PDT by Wuli
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To: Uncle Miltie

I have no idea, Miltie.


38 posted on 09/23/2009 4:22:16 PM PDT by larry hagedon (born and raised and retired in Iowa.)
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To: Wuli

My point Muli, is that the fossil fuel industry is subsidized even greater than alternative energies.

That is my point, no more no less.

I have no answers for you beyond what the article said.


39 posted on 09/23/2009 4:25:36 PM PDT by larry hagedon (born and raised and retired in Iowa.)
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To: Wuli
Wuli posted; "It will increase the tax-payers cost for “subsidies” for state, county, city or township governments when they have to pay higher prices for the fossil fuel products that have been subsidized to them and/or that they are subsidizing for their constituents, for fossil fuel products whose new prices will reflect the loss of their federal “subsidies”." good point Wuli larry
40 posted on 09/23/2009 4:28:20 PM PDT by larry hagedon (born and raised and retired in Iowa.)
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