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A Formula for Failure

TexasBred

Well-known member
A Formula for Failure
April 5, 2009

By Alan Caruba


Oil producing nations such as Saudi Arabia and the Gulf states, along with Venezuela, will grow rich while Americans will be faced with high costs for gasoline, motor and heating oil, and everything else that depends on oil such as asphalt or even Vaseline.

Meanwhile, oil producers in America, large and small, will take a financial beating. If you don't like living in a modern, advanced and industrialized society, you will favor this. If you think Americans consume too much, drive too much, and deserve to be punished for it, you will favor this.

Recently, Barry Russell, the president of the Independent Petroleum Association of America, released a statement in which he said, "President Obama delivered a devastating blow to the American oil and natural gas industry by proposing an astonishing $30 billion tax increase (as part of his FY 2010 budget) on American energy producers, most of whom are small businesses."

"Ninety percent of the oil and natural gas wells developed in the United States are done by small, independent businesses-not so called ‘Big Oil'-so tax increases hurt these companies most." It also, of course, hurts any prospect for the discovery and production of new sources of oil and natural gas in America.

In a world where more oil and natural gas is required by developing nations such as India and China, the Obama administration proposes:

(1) A repeal of expensing of intangible drilling costs; a repeal of percentage depletion that allows for the depreciation of existing small, barely economic wells;

(2) A repeal of marginal well tax credit, a safety net for wells that produce small amounts of oil and gas that, collectively, supply almost 20% of the nation's oil and 12% of its gas;

(3) A repeal of the enhanced oil recovery credit that allows industry to get more energy from wells that are depleted instead of drilling new wells;

(4) Increases the costs of geological and geophysical amortization costs involving the high cost of doing seismic and other high-tech surveys;

(5) An excise tax on Gulf of Mexico production;

(6) And a repeal of the manufacturing tax deduction, a provision given to every other American manufacturer and which allows independent oil and natural gas producers to put more money into new energy projects.

It is a plan to destroy the American oil and natural gas industry, and with it the nation's economy.

Right now, however, the Obama administration has installed an "energy team" that is completely opposed to the development of any energy resources in America, from offshore and ANWR oil to coal mining or the construction of coal-fired plants to generate electricity. Coal currently produces 50% of the nation's electricity.

Steven Chu, the Secretary of Energy, is on record saying, "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe." It is $8 a gallon there.

Ken Salazar, the Secretary of the Interior, the agency that administers energy leasing on federal lands and most offshore areas, has a long record of opposition to such leasing of oil, natural gas, and coal exploration and extraction. He has already nullified recently awarded leases for natural gas drilling in federal land in Utah. Salazar is responsible for legislation blocking the development of shale oil.

Obama's science advisor, John Holdren, out-does Al Gore with predictions of global warming calamities. Back in the 1970s he was worrying whether mankind would survive the "threat of making the planet too cold."

Meanwhile, Wall Street is watching investment drop like a stone as Timothy Geithner, the Secretary of the Treasury, testifies that U.S. oil and natural gas producing companies should not receive federal subsidies in the form of tax breaks because their businesses contribute to global warming!

This attack on energy companies and access to energy resources in America is a formula for failure.
 

Sandhusker

Well-known member
If he can't bring down the costs of green energy, he'll just raise the costs of existing energy. He couldn't give a rat's patoot what it will do to the economy, he's got this green world fantasy that he's trying to fulfill. Reality has no place in his world.
 

don

Well-known member
the cost of oil is going to go up anyway and all other forms of energy will follow. doesn't have a lot to do with who's president. if you accept rising costs are inevitable why wouldn't you look for alternatives that might be more sustainable?
 

TexasBred

Well-known member
don said:
the cost of oil is going to go up anyway and all other forms of energy will follow. doesn't have a lot to do with who's president. if you accept rising costs are inevitable why wouldn't you look for alternatives that might be more sustainable?

I do believe these are being "looked into" as you put it...in the meantime??????????????? There will always be a need for petroleum products. Why not produce as much of them as possible while also savings when possible?? And.....Why not let the market economy determine the value of oil or a thousand foot of natural gas without "outside influences" inflating the price. We've already seen what inflating the houseing market can do.
 

Sandhusker

Well-known member
don said:
the cost of oil is going to go up anyway and all other forms of energy will follow. doesn't have a lot to do with who's president. if you accept rising costs are inevitable why wouldn't you look for alternatives that might be more sustainable?

I think we should look to alternatives - and get serious about it. However, the alternatives are not there yet - we can't make that jump. We are an energy economy, you saw what high energy prices did to us last summer - it crippled us. How can Obama not see that nor realize what he's doing?
 

leanin' H

Well-known member
Sandhusker said:
don said:
the cost of oil is going to go up anyway and all other forms of energy will follow. doesn't have a lot to do with who's president. if you accept rising costs are inevitable why wouldn't you look for alternatives that might be more sustainable?

I think we should look to alternatives - and get serious about it. However, the alternatives are not there yet - we can't make that jump. We are an energy economy, you saw what high energy prices did to us last summer - it crippled us. How can Obama not see that nor realize what he's doing?

Because he is beholding to the radicals who got him elected, i.e. Moveon.org & radical enviromentalists who have ALREADY HALTED MOST DOMESTIC DRILLING THANKS TO OBAMA'S EXECUTIVE ORDERS! :roll: High fuel prices equals less driving equals warm fuzzys for tree huggers and granola sniffers! The fact that it kills rural Americans and drives up prices across the board is just the price ya have to pay to save the planet from global whining! He knows exactly what he's doing and it probably makes him giggle!
 

TexasBred

Well-known member
Sandhusker said:
don said:
the cost of oil is going to go up anyway and all other forms of energy will follow. doesn't have a lot to do with who's president. if you accept rising costs are inevitable why wouldn't you look for alternatives that might be more sustainable?

I think we should look to alternatives - and get serious about it. However, the alternatives are not there yet - we can't make that jump. We are an energy economy, you saw what high energy prices did to us last summer - it crippled us. How can Obama not see that nor realize what he's doing?

He saw it....agreed with...his only comment was he didn't expect it to go up quite as quickly as it did. I guess he wanted it to creep up slowly to 4 bucks so noone would really notice...Get ready for 4 buck gas soon.
 

backhoeboogie

Well-known member
Obama netted immediate results. Pads had been built and rigs were in transent to the new pad location when they were called to stop and detoured to the yard. Employees are laid off.

There is no trickle affects associated with this action. Dominoes are falling.
 

TexasBred

Well-known member
backhoeboogie said:
Obama netted immediate results. Pads had been built and rigs were in transent to the new pad location when they were called to stop and detoured to the yard. Employees are laid off.

There is no trickle affects associated with this action. Dominoes are falling.

Rigs can also be leased for half what they were bringing 6 months ago, yet there are still no takers.
 

backhoeboogie

Well-known member
TexasBred said:
backhoeboogie said:
Obama netted immediate results. Pads had been built and rigs were in transent to the new pad location when they were called to stop and detoured to the yard. Employees are laid off.

There is no trickle affects associated with this action. Dominoes are falling.

Rigs can also be leased for half what they were bringing 6 months ago, yet there are still no takers.

That is "change" for you. People who are willing to work are now right there rubbing elbows with those who are not willing to work.
 

hypocritexposer

Well-known member
If you had said 5 years ago, that rigs would be idle with oil at $50, you'd be called crazy.

Big oil profits about 4% on a gallon of gas, how much does the government take?

I understand costs of extracting going up, but it is the additional taxes, and reduced profit potential that is causing oil companies to sit idle.
 

TexasBred

Well-known member
hypocritexposer said:
If you had said 5 years ago, that rigs would be idle with oil at $50, you'd be called crazy.

Big oil profits about 4% on a gallon of gas, how much does the government take?

I understand costs of extracting going up, but it is the additional taxes, and reduced profit potential that is causing oil companies to sit idle.

True..no need to just spin your wheels to the tune of hundreds of billions and end up with nothing to show for all your work. Natural gas is down to just over $4 as well...may be less next month. Better to let it stay in the ground.
 

hypocritexposer

Well-known member
When the economy takes off again, it's going to hurt like heck!

Any predictions on the $/bbl in say 5 years? I bet it will make $140 look cheap.

Anybody know how they are going to build these alternative energies, without domestic supplys of oil?
 

TexasBred

Well-known member
hypocritexposer said:
When the economy takes off again, it's going to hurt like heck!

Any predictions on the $/bbl in say 5 years? I bet it will make $140 look cheap.

Anybody know how they are going to build these alternative energies, without domestic supplys of oil?

$140 may be a bargain since it will mostly be imported....I'm wondering how they're going to move aircraft carriers with 'sailboat fuel'.
 

hypocritexposer

Well-known member
Texasbred, carriers are all nuclear now, aren't they?

They'll run 20 years without re-fuelling.

Kind of makes you wonder why we wouldn't look at nuclear energy?

If coal power was doing so much damage to the enviornment, you'd think that the Democrats would look at something as safe and reliable as what the Navy uses, and parks in their backyards daily.
 

TexasBred

Well-known member
hypocritexposer said:
Texasbred, carriers are all nuclear now, aren't they?

They'll run 20 years without re-fuelling.

Kind of makes you wonder why we wouldn't look at nuclear energy?

If coal power was doing so much damage to the enviornment, you'd think that the Democrats would look at something as safe and reliable as what the Navy uses, and parks in their backyards daily.

Yeah I think all the new class of carrier is nuclear. BUT, their history of safety and dependability has been exceptional. I live within 40 miles of a nuclear plant. Have heard talk about them expanding it. If they do it will be great for the local community, school, and everyone else. Also have a twin coal burner 50 miles east of me. When one unit is operating and the other is shut down you cannot tell from looking at the stacks which one is running adn which is shut down.
 

backhoeboogie

Well-known member
hypocritexposer said:
I think it takes about 10 years to build a nuclear plant. Think of the jobs and "true" stimulus, building a few would create.

But it has been a dying industry for almost 30 years. Most of us old Nuke Engineers are gray headed. Most of the old true gray beards have passed on. That makes us the gray beards. They haven't even started building the units yet and we are being called up and offered 5 times what we are worth.

TB those new units are going to turn the last of my black hair gray.
 

TexasBred

Well-known member
backhoeboogie said:
hypocritexposer said:
I think it takes about 10 years to build a nuclear plant. Think of the jobs and "true" stimulus, building a few would create.

But it has been a dying industry for almost 30 years. Most of us old Nuke Engineers are gray headed. Most of the old true gray beards have passed on. That makes us the gray beards. They haven't even started building the units yet and we are being called up and offered 5 times what we are worth.

TB those new units are going to turn the last of my black hair gray.

Hang in their Boogie....grey hair is "IN". :wink:
 

backhoeboogie

Well-known member
Well there's not a lot going on since "looking in to it" got elected.

Biden wants to go all wind. That would have been fine this week. He should put some wind units there in DC. Seems like Pelosi and company are full of hot air.

I am with you on leaving the natural gas in the ground. "Pay me later" looks a lot better than pay me now.

Carrizo went belly up. Lots of others are hurting. Obama is going to squash out all of these little guys. Won't be nothing out there but the big boys real soon. It all goes totally against what the libs have been crying about.
 
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