Fight Between Billionaires Shows Campaign Influence

[Tex]

http://www.politico.com/news/stories/0711/59618.html#comments

Tex[/quote]

 

[Steve]

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

 

[Tex]

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.

There already are vehicles that run off of compressed natural gas. We just need a little boost in infrastructure investment.

The goal is to get off of so much foreign oil for our energy needs.

Saudi Arabia just got knocked off the top of the list of having the most oil reserves and Venezuela was put on top. We get a lot of oil from Venezuela but being dependent on these kind of foreign sources for our energy is strategically not wise. We need to develop our alternatives here even if it takes a little more investment in the short run for a longer run pay out. Being over the barrel of some of these countries taxes our country too much.

Tex

 

[Steve]

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.

wind has been proposed here.. and up on Cape Cod.. and it was mostly private $$$ , investors..

locally it is a group of wealthy commercial fisherman that first proposed the idea..

and guess what help they got from the government.. plenty of fed money.. and a complete stop from the states liberal governments..

it is now proceeding in New Jersey , but doesn't stand a chance at Cape Cod..

I say slow down the fed money.. and quite blowing it until you at least have a place to put it..

 

[lightninboy]

T. Boone Pickens is full of bull, aint he?

They're all members of the billionaires' club, and it ain't a good thing.

 

[Larrry]

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]

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?

Larry I wrote about the ethanol subsidy here recently on ranchers. The ethanol subsidy was good to get the industry started but there were some really big power plays by the grain people who captured much of that value.

We don't need an ethanol subsidy when the price of ethanol is the same or lower than the price of gas (delivered). We do need it below that price to get that industry to take pressure off of our foreign fuel and to foster a new industry.

I posted figures where ethanol was lower than gas prices. Continuing to pay them when that happens is like continuing to pay unemployment after someone has a job. It shows the incompetence of what all of our government programs has become. The intelligence in the program is drowned by the self interests of the those who got hooked on the program. The same could be said about some of our farm subsidies on corn and their loan rate programs.

It is insanity like this that makes one think that our politicians are more interested in their self interests and campaign donations coming in than they are about running the country competently.

Tex

 

[Steve]

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]

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.

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

 

[Steve]

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

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]

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?

 

[Tex]

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..

No, don't get the price spread mixed up with profitability. Here is a good article on ethanol profitability:

http://westernfarmpress.com/rice/profitability-corn-ethanol-supply-chain

As you might guess, the increase of ethanol could and does increase the price of corn. It is this reason that you can not look at the price differential as a sign of profitability of ethanol. You have to take the costs of making ethanol which includes the corn plus the short term costs (current operating costs plus depreciation) of operating the plant for the profitability of ethanol. Since ethanol price is based on (or should be) the energy content in comparison to gas, the price one gets for ethanol should be based on this energy cost. If the price of gasoline goes up to 4.5 dollars a gallon then the price of ethanol should go up a consummate amount.

The ethanol subsidy should be there just to finance "infant industry" technology and start ups.

Tex

 

[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.

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]

Is oil price pushing corn price?

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).

 

[Steve]

China manipulating its currency instead of having a floating market makes all of the terms you just used irrelevant due to their monetary pegging.

what does china have to do with Domestic ethanol tax credits?

 

[Steve]

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

by that answer, which has little to do with the topic I can see that you are truly clueless on the this issue.. or you just want to change the subject for the sake of having an argument.. neither of which is productive or worth wasting time at.. so

have a nice day..

 

[Steve]

Is oil price pushing corn price?

yes.. but it is a little more complex then that...



is taxing imported foreign oil at a higher rate then domestic ethanol production a good fiscal policy?

would actually go closer to the root of the argument for or against the tax credit..