H.R. 1380, which would provide maximum tax breaks of $64,000 for transportation companies using natural-gas-powered trucks and $100,000 for owners of natural gas fueling stations, offering tax breaks expected to cost as much as $5 billion
Steve said:over the last few years it has been evident Pickens is wanting a place at the public trough
why should tax breaks be given to a billionaire?
or an industry he represents?
while the Koch brothers motives may be greed, they are at least right.
Pickens doesn't need more tax money, any more then GE to make a profit on his ventures.. but it sure would sweeten his pot... (or profits)
H.R. 1380, which would provide maximum tax breaks of $64,000 for transportation companies using natural-gas-powered trucks and $100,000 for owners of natural gas fueling stations, offering tax breaks expected to cost as much as $5 billion
I don't know about the details of this particular plan, but we do need a little govt. help to get wind energy from the less populated to more populated places. That requires govt. help just as power companies have utility right of ways and oil companies can and do get pipeline right of ways though people's property even when they don't want it to go through there.
Tex said:I don't know about the details of this particular plan, but we do need a little govt. help to get wind energy from the less populated to more populated places. That requires govt. help just as power companies have utility right of ways and oil companies can and do get pipeline right of ways though people's property even when they don't want it to go through there.
Tex
Larrry said:Tex said:I don't know about the details of this particular plan, but we do need a little govt. help to get wind energy from the less populated to more populated places. That requires govt. help just as power companies have utility right of ways and oil companies can and do get pipeline right of ways though people's property even when they don't want it to go through there.
Tex
Do you imply a subsidy like an ethanol subsidy?
Tex said:I posted figures where ethanol was lower than gas prices.
Average Price Spread 11.7%
Average E85 Price $3.25
Average Gas Price $3.69
August ethanol futures closed at $2.942 per gallon, after moderate to steady gains through much of the week, based on tight supplies of ethanol and the expectation that overall driving demand is holding stronger than expected through the end of July.
Coastal locations are seeing the tightest supply, although it seems that the market is easing as the premium narrows between gasoline and ethanol prices.
Steve said:Tex said:I posted figures where ethanol was lower than gas prices.
Average Price Spread 11.7%
Average E85 Price $3.25
Average Gas Price $3.69
August ethanol futures closed at $2.942 per gallon, after moderate to steady gains through much of the week, based on tight supplies of ethanol and the expectation that overall driving demand is holding stronger than expected through the end of July.
Coastal locations are seeing the tightest supply, although it seems that the market is easing as the premium narrows between gasoline and ethanol prices.
looking at the recent history (since 2007) a person could make that argument.. but without looking at the overall history it is often a foolish argument..
While I agree that any subsidy on any product should be reduced over time, often cutting it out completely sends the industry into a tail spin.
Tex said:Steve said:Tex said:I posted figures where ethanol was lower than gas prices.
looking at the recent history (since 2007) a person could make that argument.. but without looking at the overall history it is often a foolish argument..
While I agree that any subsidy on any product should be reduced over time, often cutting it out completely sends the industry into a tail spin.
You are forgetting that the break even price of ethanol, which should be the wholesale price, is influenced by the gas price. As gas goes up, so does ethanol, independent of its production factors.
I am saying don't give a subsidy to ethanol if the production costs are lower than that of the price of gas.
You must also remember that the price of corn is influenced by the price of oil and gas because we do have a capacity to change corn to ethanol and substitute it for gas.
I didn't get into all of this because one drives another (price of gas drives price of corn) so it gets too confusing for most. Most didn't even get that ethanol subsidies over the price of gas is just giving away taxpayer money as corporate welfare.
Tex
I didn't get into all of this because one drives another (price of gas drives price of corn) so it gets too confusing for most. Most didn't even get that ethanol subsidies over the price of gas is just giving away taxpayer money as corporate welfare.
Steve said:Tex said:Steve said:looking at the recent history (since 2007) a person could make that argument.. but without looking at the overall history it is often a foolish argument..
While I agree that any subsidy on any product should be reduced over time, often cutting it out completely sends the industry into a tail spin.
You are forgetting that the break even price of ethanol, which should be the wholesale price, is influenced by the gas price. As gas goes up, so does ethanol, independent of its production factors.
I am saying don't give a subsidy to ethanol if the production costs are lower than that of the price of gas.
You must also remember that the price of corn is influenced by the price of oil and gas because we do have a capacity to change corn to ethanol and substitute it for gas.
I didn't get into all of this because one drives another (price of gas drives price of corn) so it gets too confusing for most. Most didn't even get that ethanol subsidies over the price of gas is just giving away taxpayer money as corporate welfare.
Tex
BTW,.. Rack prices are pretty much wholesale before, or the last price point before it hits the pump, (with the exception of FOB)
and I realize all that you say influences the cost of ethanol,
but if the average price spread is 11.7% and the claimed subsidy is over $ .38 cents at today's higher prices, cutting the subsidy would automatically make ethanol unprofitable. so at what price point was it ever profitable?
what is not counted in this by most is the forced demand by many states that must comply with EPA regs to reduce air pollution.
so no matter what the price goes to they would still be buying.. as there is little other choice..
Steve said:I didn't get into all of this because one drives another (price of gas drives price of corn) so it gets too confusing for most. Most didn't even get that ethanol subsidies over the price of gas is just giving away taxpayer money as corporate welfare.
I am sure most on here understand the economics of ethanol ,
but for simplicity sake.. think about a few definitions..
what is a subsidy?
and what is a tax?
is a tax credit really a subsidy?
what is a Tariff?
the simple fact is.. the ethanol subsidy most complain about really is a tariff on foreign oil..
if foreign oil, (gas) is taxed at 54 cents..
and foreign ethanol is taxed at 54 cents
and our bio fuel is given a tax credit of 54 cents.. (just not taxed at all)
isn't the tax credit that you claim is a subsidy just a slick way of leaving a tariff on foreign oil/fuels?
to go one step further..
the fuel surcharge on gas is a tax on Big oil, a tax on foreign oil and any other imported pump fuel..
by not taxing ethanol at the same rate the tax
isn't the tax credit that you claim is a subsidy just a slick way of leaving a tariff on foreign oil/fuels? and a windfall profit tax on big oil?
in the simplest terms..
Ethanol... tax free
big oil... surcharge (like a windfall profit tax)
imported Foreign oil/fuel tariff..
but then that would take a finer understanding of law and economics*..
*not my fault Politicians can't understand it enough to adjust the tax rates to actually hurt foreign oil?
Oil Prices Impact Ethanol and Corn Prices
July 25, 2011
By: Ed Clark, Top Producer Business and Issues Editor
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At crude oil prices of $100 per barrel, E10 ethanol can support a $7.75/bu. corn prices based on the energy value of corn, says Iowa State University economist Bruce Babcock. At $120 barrel crude, the corn price E10 ethanol can support based on the grain's energy value rises to $9.75.
However, if crude oil drops to $60/barrel, corn's energy value for E10 ethanol drops to $3.75, Babcock said at a "Recognizing Risks in Global Agriculture" meeting last week in Kansas City. The meeting was sponsored by the Federal Reserve Bank of Kansas City.
"Congress is trying to decide the future of biofuels," Babcock says. This includes both whether to continue the ethanol mandate as well as tax credits. "Elimination of the tax credit would drop production (of ethanol) a little bit, the price of corn a little bit," he says.
In studying the elimination of the ethanol tax credit across an average of 500 crude oil prices and corn yields, Babcock's study concludes that U.S. ethanol production would decrease 4.7% and corn prices decrease 9.4%. Doing the same on the elimination of the ethanol mandate, U.S. ethanol production decreases to 10.9 billion gallons and corn prices decrease to $5.30/bu., Babcock says.
"If market demand is high enough, the mandate has no impact on production, price, or consumption of fuels. But if demand is not high enough, then there is a gap between production costs and the market value of biofuels," he states.
"Will we see crude oil prices of $60/barrel, $100, $160, the answer is yes," says Robert McNally, president of the Rapidan Group LLC, adding that there will be much oil price volatility in the years ahead.
"Corn ethanol's political power in Washington has peaked," he says. That has not yet been factored into projections, he adds. "Ethanol fortunes have fallen fast and hard in Washington. The change was completely unexpected." The speed this occurred has been startling, he continues. As a result, corn growers could see changes in the Renewable Fuels Standard (RFS).
China manipulating its currency instead of having a floating market makes all of the terms you just used irrelevant due to their monetary pegging.
Tex said:Steve said:I didn't get into all of this because one drives another (price of gas drives price of corn) so it gets too confusing for most. Most didn't even get that ethanol subsidies over the price of gas is just giving away taxpayer money as corporate welfare.
I am sure most on here understand the economics of ethanol ,
but for simplicity sake.. think about a few definitions..
what is a subsidy?
and what is a tax?
is a tax credit really a subsidy?
what is a Tariff?
the simple fact is.. the ethanol subsidy most complain about really is a tariff on foreign oil..
if foreign oil, (gas) is taxed at 54 cents..
and foreign ethanol is taxed at 54 cents
and our bio fuel is given a tax credit of 54 cents.. (just not taxed at all)
isn't the tax credit that you claim is a subsidy just a slick way of leaving a tariff on foreign oil/fuels?
to go one step further..
the fuel surcharge on gas is a tax on Big oil, a tax on foreign oil and any other imported pump fuel..
by not taxing ethanol at the same rate the tax
isn't the tax credit that you claim is a subsidy just a slick way of leaving a tariff on foreign oil/fuels? and a windfall profit tax on big oil?
in the simplest terms..
Ethanol... tax free
big oil... surcharge (like a windfall profit tax)
imported Foreign oil/fuel tariff..
but then that would take a finer understanding of law and economics*..
*not my fault Politicians can't understand it enough to adjust the tax rates to actually hurt foreign oil?
China manipulating its currency instead of having a floating market makes all of the terms you just used irrelevant due to their monetary pegging.
Tariffs are great for the home industry and are justified when there is "dumping". Dumping is a term given when an industry in a country makes and sells its goods there and then dumps the rest on world markets at whatever price it will bring while keeping a home in country price. It is predatory pricing.
http://en.wikipedia.org/wiki/Dumping_%28pricing_policy%29
Most people don't have a clue as to how OPEC used predatory pricing to keep out competitors. Sovereign states have a responsibility to protect their own economies through this kind of action. We have just failed miserably at it. Our trade deficits are a sign of that. It also allowed politicians to leverage up the U.S. borrowing to pay for government instead of taxing and then spending. It has put us deeply in debt to China AND allowed them to buy industries and demand from us.
Tex
Tex said:Is oil price pushing corn price?