Biden to Float Windfall Tax on Energy Producers

kmgilroy89 · Oct 31, 2022

https://www.usnews.com/news/busines...den-to-float-windfall-tax-on-energy-producers

I know this is just noise to blame others for inflation and would never pass, but it’s still an idiotic idea. The market dropped on the news and has since rebounded after realizing it is noise. Price gouging is a problem in pharmaceuticals. However, American oil companies are not price gouging us as the price of oil is set on the global market place. The government might as well takeover oil production if they were to do this.

Cuddles · Oct 31, 2022

kmgilroy89 said:
https://www.usnews.com/news/busines...den-to-float-windfall-tax-on-energy-producers

I know this is just noise to blame others for inflation and would never pass, but it’s still an idiotic idea. The market dropped on the news and has since rebounded after realizing it is noise. Price gouging is a problem in pharmaceuticals. However, American oil companies are not price gouging us as the price of oil is set on the global market place. The government might as well takeover oil production if they were to do this.

oh, ok, I guess oil companies are not multinationals.

kmgilroy89 · Oct 31, 2022

Cuddles said:
oh, ok, I guess oil companies are not multinationals.

As shown in the pandemic the main driver of oil prices is OPEC production levels. The price is driven by supply and demand. So the solution is to tax the suppliers? This is just stupid economics and why every Democrat should vote for me in the 2024 primaries.

Tsing Tao · Oct 31, 2022

kmgilroy89 said:
As shown in the pandemic the main driver of oil prices is OPEC production levels. The price is driven by supply and demand. So the solution is to tax the suppliers? This is just stupid economics and why every Democrat should vote for me in the 2024 primaries.

Cuddles is a Biden apologist, and not likely to look at this with an open mind.

Taxing the "windfall" only leads to future capacity constraints as CAPEX spending occurs in windfall years. But Biden is an idiot and likely doesn't understand this, or more likely, does understand it yet hopes the public won't.

Cuddles · Oct 31, 2022

kmgilroy89 said:
As shown in the pandemic the main driver of oil prices is OPEC production levels. The price is driven by supply and demand. So the solution is to tax the suppliers? This is just stupid economics and why every Democrat should vote for me in the 2024 primaries.

If your argument is price is driven by supply and demand, why is price above pre-COVID levels since we've basically matched demand? Why are revenues above pre-COVID levels? You're also ignoring the crack gap in your pricing argument.

Tsing Tao · Oct 31, 2022

Cuddles said:
If your argument is price is driven by supply and demand, why is price above pre-COVID levels since we've basically matched demand? Why are revenues above pre-COVID levels? You're also ignoring the crack gap in your pricing argument.

LOL...the "crack gap". Talking points memorized without any idea how shit actually works. The crack spread has always been around. The issue with diesel (the really abnormal spread right now) has nothing to do with energy companies having "excess prices".

kmgilroy89 · Oct 31, 2022

Cuddles said:
If your argument is price is driven by supply and demand, why is price above pre-COVID levels since we've basically matched demand? Why are revenues above pre-COVID levels? You're also ignoring the crack gap in your pricing argument.

Do you remember when oil went negative, because there was so much on the market that they couldn’t find anybody to store it? Demand plummeted in 2020 when businesses shutdown and nobody was going anywhere. The price is set by the financial markets. The break even price to get oil was like $55-$60/barrel back then. Not sure what it is today. However, the oil companies have to keep the oil coming even when it’s temporarily at $20/barrel, because it’s too expensive to shutdown/restart. What we want to do is encourage as much drilling in free market countries (such as the U.S. and Canada) as possible to counter the OPEC cartel, because the reality is that world relies on oil and no green fantasy is changing that reality in the near future. A windfall tax does the opposite of that objective.

kmgilroy89 · Oct 31, 2022

Tsing Tao said:
Cuddles is a Biden apologist, and not likely to look at this with an open mind.

Taxing the "windfall" only leads to future capacity constraints as CAPEX spending occurs in windfall years. But Biden is an idiot and likely doesn't understand this, or more likely, does understand it yet hopes the public won't.

After 5 decades in Washington politics he’s gotta know this. However, we got an election coming up, inflation is the top issue on the minds of voters, and he needs to find somebody to blame. Is he going to go after the main culprit of long-term inflation (the Fed by printing way too much money) after reappointing the chair to another 4 year term? No.

UsualName · Oct 31, 2022

I don’t know about a windfall tax but yes energy prices should be investigated at this point. There is an actual squeeze on the consumer and the market is not working as it would be expected to.

Cuddles · Oct 31, 2022

kmgilroy89 said:
Do you remember when oil went negative, because there was so much on the market that they couldn’t find anybody to store it? Demand plummeted in 2020 when businesses shutdown and nobody was going anywhere. The price is set by the financial markets. The break even price to get oil was like $55-$60/barrel back then. Not sure what it is today. However, the oil companies have to keep the oil coming even when it’s temporarily at $20/barrel, because it’s too expensive to shutdown/restart. What we want to do is encourage as much drilling in free market countries (such as the U.S. and Canada) as possible to counter the OPEC cartel, because the reality is that world relies on oil and no green fantasy is changing that reality in the near future. A windfall tax does the opposite of that objective.

good lord man:

Cuddles said:
lol ok. I guess high demand on low supply doesn't cause price surge in this fantasy land of yours.

Cuddles said:
nope, crude is just a supply/demand issue. The colonial pipeline hack was a supply chain problem.

Cuddles said:
Simply put, the power of hindsight is a bitch. At the time Biden came in, world affairs were fairly OK, so cancelling drilling leases that Trump had expanded on national parks/public lands (as in we own them) made sense. The only difference domestic production would have made is if we had ramped up production and the Russians had invaded, people would be bitching about why 1.50$ (as if) gas is now 2.90$ instead of the current price point and big oil would be yelling how dems are kneecapping subsidies and tax cut legislation to "ramp up" domestic production.

Keep in mind most of the GOP/big oil talking points are merely political as Biden didn't really impact domestic oil production levels beyond capping some projected growth that Trump had started. I am not sure the Trump operations would be pumping at this point in time quite yet either.

People also ignore the "crack spread" due to refineries set up for Russian sour grade crude. These cannot handle sweet w/o retrofitting (am not quite sure what our current domestic grade is), so everyone and their sister is after whatever refined supply is available. Simply put, gas prices are an easy political target because people feel it but don't understand it.

As for relying on dictators, Venezuela is definitely the better of most evils but agree that putting money in the coffers of tyrants is what has us in this mess in the first place. Not like big oil ever gave a flying fuck (Tillerson, aka Trump's Sec. of state and exCEO of exxon) was butt buddies w/Putin and even got an award from the Kremlin.

As to the rest, fine, open up N.America production. One barrel increase for every barrel barred from Saudi/Qatari/antidemocratic shithole import