GOP blocks President Obama's bid to eliminate Big Oil Subsidies.

[Ausm]

Senate Republicans with yet another Filibuster to continue giving Billions of taxpayer subsidies to Big oil when they are reaping record profits EVERY quarter.

What's Conservative about this??? Great stuff for President Obama to run on tho.

http://www.cbsnews.com/8301-505266_162-57406930/gop-blocks-obamas-bid-to-end-oil-subsidies/

 

[cybrsage]

Good, higher oil prices in the US are not something we truely want. Anyone who thinks the oil companies will not pass their increased costs to the consumer is living in a fantasy land.

 

[Mursilis]

Good, higher oil prices in the US are not something we truely want. Anyone who thinks the oil companies will not pass their increased costs to the consumer is living in a fantasy land.

Seems like the oil companies are already passing on the costs to consumers, in the form of the public subsidies. Why should ridiculously profitable private companies be getting subsidies again?

 

[drebo]

Seems like the oil companies are already passing on the costs to consumers, in the form of the public subsidies. Why should ridiculously profitable private companies be getting subsidies again?

Because even if the oil subsidies end, our taxes will not go down.

However, if the oil subsidies do end, our oil prices will absolutely go up.

Thus, ending the oil subsidies is a losing proposition.

 

[Matt1970]

This is the answer to high gas prices? No wonder people think he has no clue.

 

[xBiffx]

Because even if the oil subsidies end, our taxes will not go down.

However, if the oil subsidies do end, our oil prices will absolutely go up.

Thus, ending the oil subsidies is a losing proposition.

Exactly. The only way it works out better for any of us if we get a check for our portion of the government's new revenue in tax from the oil companies. Even then, its not really better, its pretty much the same difference from our point of view. The one getting screwed then is the government because they saw no net increase in revenue.

 

[Gonad the Barbarian]

Unless these subsidies are directly increasing supply (and considering the record profits before them, they're not), removing them WILL NOT raise prices. Price is a function of supply and demand, NOT production costs. Good grief.

 

[xBiffx]

Unless these subsidies are directly increasing supply (and considering the record profits before them, they're not), removing them WILL NOT raise prices. Price is a function of supply and demand, NOT production costs. Good grief.

So you are saying that if the costs to pull a barrel of oil from the ground and refine it goes up 10 fold, the price of gas will stay the same? Why would the oil company lower their margin?

 

[Mursilis]

Because even if the oil subsidies end, our taxes will not go down.

But the deficit will, no?

However, if the oil subsidies do end, our oil prices will absolutely go up.

How so? I don't think the demand for oil is completely inelastic.

 

[Gonad the Barbarian]

So you are saying that if the costs to pull a barrel of oil from the ground and refine it goes up 10 fold, the price of gas will stay the same? Why would the oil company lower their margin?

Because if the choice is between lowering your margin and completely eliminating your margin on that barrel of oil which are you going to choose? Market sets price.

 

[xBiffx]

Because if the choice is between lowering your margin and eliminating your margin on that barrel of oil completely which are you going to choose? Market sets price.

OK we can go with your assumption. The oil company just holds oil, thereby reducing the supply, ergo increasing the price while protecting their margin. This would equate to subsidies increasing supply would it not? Sure the oil company had a hand it making that happen, indirectly. In the subsidy discussion, the market does not factor in.

 

[FoBoT]

sounds like a win-win-win for Mr. O
if it had passed, oil prices would go up -> win
it didn't pass, Mr. O can blame the R's -> win

more class warfare, we all win

 

[Moonbeam]

The best answer is to declare oil a national security item and nationalize the oil companies. It won't be quite so efficient but there won't be any Crotch brothers and the profits will go to the treasury.

 

[dawheat]

OK we can go with your assumption. The oil company just holds oil, thereby reducing the supply, ergo increasing the price while protecting their margin. This would equate to subsidies increasing supply would it not? Sure the oil company had a hand it making that happen, indirectly. In the subsidy discussion, the market does not factor in.

Would this occur? I'd imagine the market would balance itself out - if they hold back oil to increase prices, demand decreases resulting in lowered prices. In fact I'd imagine that as reserves increase substantially, the effect is magnified. Unless countries like SA also cut back on the amount they pump, it would result in an artificial glut - since they sell to a global market, they have no incentive to cut back on pumping.

This would seem to directly impact the profitability of these companies as the sale price is set by the market, but their "costs" would increase.

I suppose an argument could be made that it reduces the likelihood of future investment, but considering the record profits they make (and would continue to make massive profits), it sounds unlikely. Instead of making an obscene amount of profit on future sites, I make a slightly less obscene amount of profit.

Not sure I see a good argument to maintain these subsidies.

 

[Jaskalas]

The best answer is to declare oil a national security item and nationalize the oil companies. It won't be quite so efficient but there won't be any Crotch brothers and the profits will go to the treasury.

One wonders what not 'quite so efficient' truly looks like.

 

[Siddhartha]

Senate Republicans with yet another Filibuster to continue giving Billions of taxpayer subsidies to Big oil when they are reaping record profits EVERY quarter.

What's Conservative about this??? Great stuff for President Obama to run on tho.

http://www.cbsnews.com/8301-505266_162-57406930/gop-blocks-obamas-bid-to-end-oil-subsidies/

Are the Republicans still talking about raising Federal income taxes on the poor and working classes?

 

[Gonad the Barbarian]

OK we can go with your assumption. The oil company just holds oil, thereby reducing the supply, ergo increasing the price while protecting their margin. This would equate to subsidies increasing supply would it not? Sure the oil company had a hand it making that happen, indirectly. In the subsidy discussion, the market does not factor in.

If the oil company can just hold oil to drive the price up there is nothing about the subsidy that's keeping them from doing it already.

 

[thraashman]

Unless these subsidies are directly increasing supply (and considering the record profits before them, they're not), removing them WILL NOT raise prices. Price is a function of supply and demand, NOT production costs. Good grief.

Actually in most industries prices are the product of supply and demand, but not in oil. The price is mostly so high because of speculators. Which is also why if subsidies end it's not really likely the price will go up, because it's still mostly on pointless speculation.

 

[Gonad the Barbarian]

Actually in most industries prices are the product of supply and demand, but not in oil. The price is mostly so high because of speculators. Which is also why if subsidies end it's not really likely the price will go up, because it's still mostly on pointless speculation.

It's still supply and demand. Speculators create artificial demand. All that oil they bid on they never actually take possession of. By current estimates they are adding about 50 cents to every gallon of gas.

 

[jackschmittusa]

I have a moral objection to giving tax money to these corporations. I demand an exemption from having my tax dollars going to them.

 

[Jaskalas]

It's still supply and demand. Speculators create artificial demand. All that oil they bid on they never actually take possession of. By current estimates they are adding about 50 cents to every gallon of gas.

If anything, that practice is something to target and potentially end.

 

[GarfieldtheCat]

Good, higher oil prices in the US are not something we truely want. Anyone who thinks the oil companies will not pass their increased costs to the consumer is living in a fantasy land.

I realize your aversion to having to read actual facts, but oil companies average about $11 billion dollars a month. That is almost $135billion/year.

So eliminating a ~$4billion tax subsidy is pretty trivial. It's not quite 3%.

The biggest problem with gas prices is speculation, which is driving the price up, way more then eliminating a subsidy, but carry on with your faux outrage.

 

[Dman8777]

Stop the subsidies (gas price goes up) and make speculation illegal (gas price goes down) = solution

 

[Ninjahedge]

So you are saying that if the costs to pull a barrel of oil from the ground and refine it goes up 10 fold, the price of gas will stay the same? Why would the oil company lower their margin?

There are many things flawed with this argument, and the posts leading to it.

1. If the subsidies are ended, the money will not disappear. It will either be re-appropriated in another program that needs funding OR IT WILL GO TO HELP BALANCING THE BUDGET.

2. Our gas prices are being determined almost independently of the cost of production and supply. Oil was up at $140 a barrel, and gas went to $4 a gallon, but now with oil at $103.29 a barrel (http://www.quoteoil.com/) it is still at $4 a gallon? Nuh-uh.

3. Price of acquiring and refinement is smaller than sale price. You cannot apply the same multipliers to cost and sale price.

Example: If it cost $0.50 a gallon to get to the pumps and you sold it for $1, if production price went up and usage did not decline, 10X production cost would require you to charge $5.50 a gallon to get the same profit, not $10.

So instead of getting behind one party or another on issues like this, maybe we should back ANY POLITICIAN OR MOVEMENT that seeks to end these ill-suited subsidies (tobacco anyone?) and other programs that really do little for the public good.

 

[Ninjahedge]

It's still supply and demand. Speculators create artificial demand. All that oil they bid on they never actually take possession of. By current estimates they are adding about 50 cents to every gallon of gas.

Artificial being the key word here.

Virtual would be another word for it.