President Obama Calls for End To Oil and Gas Subsidies

[Lloyd]

I personally never did understand how some people could claim to want small government, smaller debt and free markets yet defend subsidies to certain industries in the amount of billions of dollars a year.
Imagine what $4 billion in EV chargers along the highway system could do (400,000 $10,000 DC fast chargers but that doesn't include installation) or $4 billion a year in grid upgrades. I think 100 years of supporting the oil industry through various means is probably enough. Time to move on.

Think how fast private enterprise could get them up an running if it were profitable for them to do so. If there were a charge station on every street and parking spot, would you be willing to pay say $3 per hour to charge at them? Take the job away from the government, and it will get done better and faster. We're stuck on free charging. Maybe it shouldn't be.

 

[Larry Chanin]

“I’m asking Congress: Eliminate this oil industry giveaway right away. I want them to vote on this in the next few weeks. Let’s put every single member of Congress on record: You can — you can stand with the oil companies, or you can stand up for the American people,” the president said at a speech in Nashua, N.H.

Not only is this the right thing to do for the country, it's a very shrewd political move when there is really nothing meaningful the president can do in the short-term to reduce gasoline prices.

Larry

 

[dpeilow]

Think how fast private enterprise could get them up an running if it were profitable for them to do so. If there were a charge station on every street and parking spot, would you be willing to pay say $3 per hour to charge at them? Take the job away from the government, and it will get done better and faster. We're stuck on free charging. Maybe it shouldn't be.

We have private companies deploying charging in the UK. The network is in the "chocolate teapot" category of uselessness.

The only regional network that is doing a good job and seems to get it is ChargeYourCar in the North East, which is being driven by local government.

 

[doug]

Off topic stuff got moved to Off Topic. North Korea

Please stay on topic.

 

[neroden]

I think subsidies can make sense at times if they are directed at pushing or accelerating something that benefits society, not just one company or a particular industry. Problem is once a subsidy is in place, it doesn't seem to go away easily. Look at the oil industry.

Exactly, same with government agencies, and other funding and regulations.

Problem is this is the same with everything, not just government. This is known technically as the "conservative bias" (using conservative in the traditional meaning, *not* the political one) in society -- once something is there, it tends to stay there, even if it's monumentally stupid. Corporations do it, non-profits do it, individuals do it. It applies to things as dumb as high heels. An egregious example in business is the habit of checking credit ratings (which are practically meaningless anyway, and easily manipulated) for anything and everything, including things for which even an accurate credit rating would be positively irrelevant.

The only solution to this is to create a culture where "we've always done it this way" is not an acceptable justification for something. Dunno how though!

 

[Robert.Boston]

Even when subsidies or other programs have "sunset provisions," which are intended avoid this conservative bias, it's hard to kill anything once it's begun.

Exhibit A: the Bush-era "temporary" tax cuts.
Exhibit B: the production tax credit for wind power.

(There, now I've given grist for the left and the right to excoriate me!)

 

[dsm363]

Maybe all subsidies should only last 8 years at most and can only be renewed once for an additional 8 years with at least 2/3rd's of Congress. How you'd get Congress to adhere to that, short of a constitutional amendment though, would be tough.

 

[vfx]

Even when subsidies or other programs have "sunset provisions," which are intended avoid this conservative bias, it's hard to kill anything once it's begun.

Exhibit A: the Bush-era "temporary" tax cuts.
Exhibit B: the production tax credit for wind power.

(There, now I've given grist for the left and the right to excoriate me!)

Problem is that since technology like wind cannot make it without a ten year subsidy they need a long term promise of government backing. A two year sunset on subsidy renders it useless. Turbine makers need to spend vast capitol for a few years to develop the technology and manufacturing before even having a derivable product. With a two year subsidy they won't invest since there is no guarantee that in two years incentives will be renewed.

 

[Robert.Boston]

Agreed, vfx: the Investment Tax Credit was a better structure, because it rewarded building the plant rather than operating it.

 

[Larry Chanin]

Maybe all subsidies should only last 8 years at most and can only be renewed once for an additional 8 years with at least 2/3rd's of Congress. How you'd get Congress to adhere to that, short of a constitutional amendment though, would be tough.

The US can't afford to substitute our current dependency on foreign oil for a future dependency on foreign batteries or photovoltaics, etc. It seems that so far foreign governments such as China are more aggresively subsidizing these sustainable technologies. As a result it wouldn't be prudent to have some sort of pre-set schedule to phase out subsidies if we are serious about attempting to maintain a level playing field during the adoption of theses important new technologies.

Larry

 

[rolosrevenge]

Agreed, vfx: the Investment Tax Credit was a better structure, because it rewarded building the plant rather than operating it.

No, because this led to people building wind turbines without generators because it was much cheaper, and nowhere in the tax law did it say the turbines actually had to produce anything.

 

[JRP3]

Santorum I relate to.

Really? Obviously I don't actually know you but you've always seemed like a rational individual, where Santorum comes off as a religious fanatic with no understanding of the intent of the founding fathers. It's hard to imagine a more dangerous individual as the leader of this country. Luckily I don't think he has a chance, even though it would be an easier win for Obama, the small chance that Santorum could actually be president is just too terrifying.

 

[Lloyd]

Really? Obviously I don't actually know you but you've always seemed like a rational individual, where Santorum comes off as a religious fanatic with no understanding of the intent of the founding fathers. It's hard to imagine a more dangerous individual as the leader of this country. Luckily I don't think he has a chance, even though it would be an easier win for Obama, the small chance that Santorum could actually be president is just too terrifying.

I guess it's all relative. I can't relate to Romney, his life is very different and has a skewed perspective of business only from the macro scale. Gingrich has been in government so long he is a little out of touch IMO. Although Paul is a physician by trade he is fiscally conservative dispite consequences, and I can't relate to that. So...... I'm left with..... Santorum. Remember I was asked of the choices is had, and they all have faults. Nobody's perfect!

 

[Beavis]

To get back on topic.....Republicans have responded to Obama's call to end oil & gas subsidies. Two bills, one the the House and one in the Senate, have been introduced that would end 14 credits and Grants in Lieu of Credits that relate to the energy industry, including clean energy and renewables. The credit for your Tesla is included in the list of credits to be repealed even though it is currently scheduled to lapse after this year. The House bill is sponsored by Pompeo of Kansas and DeMint is sponsoring the Senate bill.

Neither bill is expected to get to the President, of course. We won't get any tax legislation before the election. The importance of the bills is that they give everyone an idea of which way the wind is blowing on the right.

 

[JRP3]

I can't relate to Romney either, and I'm not of the mindset that any businessman is necessarily a good choice to run a government, but of the candidates he seems the least irrational, and least dangerous for the country. I also can't relate to Obama and think there are many things he could have done better, but as a leader actually trying to push the country away from our dependence on oil and fossil fuels, and promoting alternatives, I still think he's a better choice than any of the GOP field. I'm afraid that under a Republican presidency EV's could be sidelined once again.

 

[AnOutsider]

I can't relate to Romney either, and I'm not of the mindset that any businessman is necessarily a good choice to run a government, but of the candidates he seems the least irrational, and least dangerous for the country. I also can't relate to Obama and think there are many things he could have done better, but as a leader actually trying to push the country away from our dependence on oil and fossil fuels, and promoting alternatives, I still think he's a better choice than any of the GOP field. I'm afraid that under a Republican presidency EV's could be sidelined once again.

If EVs weren't a factor (it's a bigger issue to most on this board than others), how would that change your perception?

 

[JRP3]

I look at EV's as part of our entire energy policy, which I think is critical to our future, so it's hard to separate it. Even without EV's I don't like the direction the Republicans want to go in regards to energy, which seems like a return to business as usual, and an unsustainable fantasy. Newt's big thing now is $2.50 per gallon gasoline, which is as unreal as the pretend gas pump he put on his campaign bus. I'm also quite troubled by the continued GOP embrace of religious fanatics. Religion is a personal issue and has no place in running a country, as our founding fathers understood quite well.

 

[NigelM]

From cbsnews,com: Santorum: Obama's worldview upside-down

Asked to clarify his statements on CBS News’ “Face the Nation” Sunday, Santorum said that he was referring not to the president’s faith but to environmentalism.

“Well, I was talking about the radical environmentalists,” he told Schieffer. “That’s what I was talking about: Energy, this idea that man is here to serve the Earth, as opposed to husband its resources and be good stewards of the Earth. And I think that is a phony ideal. I don’t believe that that’s what we’re here to do – that man is here to use the resources and use them wisely, to care for the Earth, to be a steward of the Earth, but we’re not here to serve the Earth.

“The Earth is not the objective,” Santorum said. “Man is the objective. I think a lot of radical environmentalists have it upside-down.”

Which is why: Mitt Romney Trouncing Rick Santorum Among Catholics

 

[eledille]

It's crazy that we subsidize profitable companies to provide a limited resource

Oil companies in the Norwegian part of the North Sea pay 78% tax (investments in exploration and production is deductible). Despite this they keep drilling and recently discovered a new field containing between 1.7 and 3.3 billion barrels of recoverable oil in the Avaldsnes/Aldous prospects.

Why these guys would need subsidies is beyond me...

 

[vfx]

To get back on topic.....Republicans have responded to Obama's call to end oil & gas subsidies. Two bills, one the the House and one in the Senate, have been introduced....

Do you have Bill numbers?