Oil companies spend more on taxes than on oil supply development

American Thinker ^ | June 13, 2008 | Christopher Alleva

[neverdem]

If didn't know better, I would think the Democrats are really trying to lose this election. First they offered up the cap and trade global warming bill in the Senate that was quickly withdrawn when they realized what a debacle they were creating for themselves. Then this week they planned to use a windfall profits tax to vilify the oil companies and distract the public from their negligence and malfeasance for failing to enact laws and make policies to encourage the production and distribution of the life-blood of the nation- oil.

Congress has repeatedly failed to produce legislation to that would lead to more meaningful energy supplies, preferring instead to pass bills that payoff favored special interests and rent seekers. This effort has been largely lead by the Democrats with RINOs aiding and abetting the cause.

There is considerable debate among energy producers about how to meet growing worldwide demand. According the Energy Information agency, there is a daily supply deficit approaching one-million barrels a day. Coincidently, this approximates the amount of oil that is projected to be lifted out of ANWR in Alaska that the Democrats with assistance from a few Republicans have been blocking for almost 3 decades.  In the debate over the windfall tax Democrat Senator Chuck Schumer mindlessly argued that bringing the new Alaska production online would not materially reduce the price of gas.  

Historically, daily world supply and demand track very closely. The graph below shows daily average production and consumption since 2003. This shows alternating supply deficits and surpluses through the third quarter of 2006 that turns to a persistent deficit thereafter. Clearly small incremental changes in supply and demand cause huge price fluxuations. In an interview several years ago, then Exxon CEO Lee Raymond, indicated that they don't even attempt price forecasts when they make multi-decade future investment plans.  

Over the last several the major oil companies have been driven away from investing money in future exploration and production. The so-called Supermajors, Exxon, BP, Shell, Chevron. Conoco, and Total have paid more in taxes than they have invested in the oil business. For the three year period, 2005 to 2007 these companies have paid $292 billion in taxes and invested $265 billion in capital projects. Stunningly, Exxon has spent nearly twice as much buying back it's own stock ($78 billion) as it has on capital projects ($44 billion).
 

Exxon Mobil has been a favorite whipping boy in Washington, even Standard Oil scion Democrat Senator Jay Rockefeller couldn't resist getting in on the fun. While. dilletantes like Rockefeller and many of his Senate brethren, can afford to play around like with this, the country cannot afford this luxury. Exxon Mobil's three year record of capital spending, stock buybacks and tax payments are indicative of serious secular and structural changes in the provision of energy.  Exxon Mobil is buying back stock because they can't find enough energy investments to deploy their excess cashflow. Domestic drilling is severely constrained and international opportunities are scarce. If the business was so great they would use more money to invest in exploration.

 

The voters are rapidly awakening to this policy and legislative failure. Beware, Democrats.

Posted at 11:01 AM | Email | Permalink

[Alamo-Girl]

Thanks for the ping!

[Quix]

Well put.

I strongly agree.

Have you checked out post #161

on this thread?

http://www.freerepublic.com/focus/news/2030862/posts?page=223#223

About a 9.9 quake predicted for off the coast of China. The only ‘time-stamp’ in the dream/vision was that it was within the time possible for cancelation of the Olympics.

Interesting times. God alone is our Refuge.

Other folks are saying San Diego is vulnerable in the next several weeks for a heavy duty quake.

[neverdem]

Thanks for the links.

[hosepipe]

private reply..

[Quix]

Thanks.

Will check it out.

[Quix]

email or FREEPMAIL?

No FREEPMAIL yet.

[Born Conservative]

[GOPJ]

Thanks for the ping.

[xkaydet65]

And this has been done since 1979 with GOP presidents in the White House for 20 of those 28 years and a GOP Congress for 12 of those years. Does anyone think these facts will be allowed to go by unnoticed in this election.

Our Texas oilmen and pols allowed themselves to be conned into believing that the Saudis really were well educated, single malt drinking, Sayville Row suit wearing colleagues instead of deeply religious and ideological Muslims, still believing in an Islamic restoration.

Of course neither candidate is one we can count on to redirect this catastrophe, certainly not the haloed one.We need someone who can see our enemies clearly, recognize our vulnerabilities and strive to eliminate them, is beholden to no special interest save his oath of office.Any suggestions?

[steelyourfaith]

 

Beam me to Planet Gore !

[SunkenCiv]

Thanks neverdem for this one, and AdmSmith for *this* one:

“Splash and Dash” Biofuel Scam Costs Americans Millions, Lawmakers Say
Fox News | June 13, 2008 | William LaJeunesse
Posted on 06/15/2008 2:31:29 AM PDT by AdmSmith
http://www.freerepublic.com/focus/news/2031350/posts

[thackney]

Exxon Mobil is buying back stock because they can't find enough energy investments to deploy their excess cashflow.

The nature of the boom/bust cycle of the oil industry has always caused many of them to sell stock when prices were low to survive and buy it back when prices are up.

It sounds like my investment strategy of buy high and sell low, but it is the nature of the business of this industry to survive the cycles. Oil companies tend to have a longer viewpoint than many others. They have to do so to survive.

[SunkenCiv]

EU protests U.S. aid for fuel producers
International Herald Tribune | June 13, 2008 | By James Kanter
Posted on 06/14/2008 7:09:58 PM PDT by DeaconBenjamin
http://www.freerepublic.com/focus/f-news/2031274/posts

The Bum Rap on Biofuels
American Thinker | 5-13-08 | Herbert Meyer
Posted on 05/14/2008 3:59:06 AM PDT by Renfield
http://www.freerepublic.com/focus/f-news/2015711/posts

Campaign to vilify ethanol revealed
ethanol producer Magazine | May 16, 2008 | By Kris Bevill
Posted on 05/17/2008 9:22:13 AM PDT by Kevin J waldroup
http://www.freerepublic.com/focus/f-news/2017389/posts

Senator assails solar industry-(Tax for Solar)
sign on sandiego | 6/14/08 | na
Posted on 06/15/2008 6:24:28 AM PDT by Flavius
http://www.freerepublic.com/focus/f-news/2031389/posts

Renewable Petroleum: Microbes Eat Waste and Excrete Crude Oil
DBKP | June 15, 2008 | Mondoreb
Posted on 06/15/2008 6:34:27 PM PDT by mondoreb
http://www.freerepublic.com/focus/news/2031618/posts