New Oil Company Taxes

[tabs]

Who in their right minds thinks the oil companies will su(k up any new taxes on them. They will simply shift them onto the consumer. It is not like the USA can get by without oil, the world is FORCED to buy the stuff to live in the modern age. Oil companies allready are multinational so closing up shop in the USA won't be any burden on them as they have plenty of buyers in the rest of the world.

So go ahead President Obama stick it to the oil companies with a new oil tax. After all it will be the US citizens that get stuck with the burden of paying for it. So instead of $120 a barrel how bout $150 or $175....that ought to show those oil companies.

And this is for the ignorant and naive among U Boyz...oil prices are set at the daily NYMEX auction and not by the oil comapnies nor OPEC nations.

[Hugh R]

Tabs, I'm delighted that you agree with me from our "Economic Summit" at lunch today.

[dd74]

I have to agree with you there, Theodore. Obama is on the wrong track when it comes to big oil. After all, big oil owns DC.

In a perfect world, he'd allow Signal Hill to expand to the waters off San Pedro.

[tabs]

Living in the modern age requires trade offs...you can not have the luxurys we enjoy today, which are brought about by economies of scale (lower unit cost making them affordable) and the R&D required to advance the technology without having environmental degradation. The idea is to limit that degredation as much as possible, which usually in the real world adds cost to the lifestyle.

[dd74]

In my opinion, uneducated as it is, I think these days the oil companies leave a rather small footprint when they drill. I could be wrong, but I'm not certain there is too much degradation with their current technology.

Look, I know it won't lower prices. $5+ per gallon fuel is here to stay, which is what it is in certain places in L.A. But that's the price - we have to live with it. There are many alternatives to avoiding paying that price. But the fact is, motorists are also very lazy. After all, there's also a human reason - not just necessarily a cost reason - why the manual transmission is disappearing from most of today's car line ups.

The reason I call for more drilling is to make sure we have a supply if the Middle East, Mexico, Canada or even China decides we can't have any of their oil.

[tabs]

The whole manufacturing process degrades the environment.

[kach22i]

Oil prices have got to be kept high one way or another to:

1. Save the environment.

2. Make new alternate energies competitive.

3. Tell the dictators we are weening off the oil teat.

This will allow the USA to stop protecting the world's oil supplies, which is going to save us a huge wad of cash. Yes oil prices are kept low because the good old USA protects the world's dictators at the taxpayer's expense..................things are going to change baby.

[Jim Richards]

Lets have more nucular energy.

[kach22i]

Originally Posted by Jim Richards

Lets have more nucular energy.

Someone told me that in Canada the latest reactor is being built with private money.

If they can do that here, then okay. If not, then no more freaking handouts and corporate welfare on the US taxpayers head.

[Jim Richards]

Corporate welfare blows.

[Rick Lee]

Originally Posted by Jim Richards

Corporate welfare blows.

There's no such thing. Corporations get the blame for the government passing subsidies to us through them. Take away what you call corporate welfare and those increased costs will get passed right on back to the consumer.

[Jim Richards]

Yes, in one case the gov decides where our money goes, in the other we decide. I thought you were a conservative?

[kach22i]

Originally Posted by Rick Lee

There's no such thing. Corporations get the blame for the government passing subsidies to us through them. Take away what you call corporate welfare and those increased costs will get passed right on back to the consumer.

The government just puts the cost into national debt and on to future generations.

Pay as you go sounds good to me, a form of personal responsibility.

[The Gaijin]

It cost money to make money:

June 5 (Bloomberg) -- Brazil's oil discoveries, including the Western Hemisphere's largest in three decades, may cost $100 billion more to develop than the industry's most costly field.

The Tupi deposit and nearby offshore prospects probably will cost $240 billion to exploit, said Peter Wells, director of U.K. research firm Neftex Petroleum Consultants Ltd. and a former Royal Dutch Shell Plc exploration manager. The total exceeds the $136 billion estimate for Kazakhstan's Kashagan field, led by Eni SpA, and would be enough to fund the U.S. space program for 14 years.

Brazil's state-controlled Petroleo Brasileiro SA will need to enlist international producers such as Exxon Mobil Corp. to raise financing for the platforms and pipelines required to reach crude trapped beneath six miles (10 kilometers) of water and rock, Wells said in a telephone interview. The prospects may hold $6 trillion of petroleum and make Brazil one of the world's 10 largest oil producers.

``This oil is going to be difficult to get out of the ground and it will cost a lot,'' said Wells, who also was a chief negotiator for BP Plc in Azerbaijan. Petroleo Brasileiro ``will need the capital expertise only found with the world's largest, most experienced oil companies.''

Tupi, the biggest discovery in the Americas since 1976, will start pumping in April 2009, Chief Executive Officer Jose Sergio Gabrielli said in an interview last month. Gabrielli declined to estimate development costs for Tupi and adjacent fields, and a spokesman said yesterday that the company wouldn't comment on Wells's projection.

Tupi and Friends

The $240 billion estimate assumes there are four to seven similar prospects nearby and includes costs to drill wells, lay pipelines and build production platforms over a period of about 20 years, Wells said.

Tupi alone could cost $100 billion, said Wells, part of a Neftex team doing a six-year study to map all of the world's petroleum basins.

Cambridge Energy Research Associates, the Cambridge, Massachusetts-based consulting firm headed by Daniel Yergin, said the Tupi-area fields will cost $200 billion to $240 billion. Costs are rising as producers compete for labor and equipment with oil prices above $120 a barrel. Deepwater drilling rigs are renting for more than $600,000 a day in some cases.

The Brazil fields may hold as much as 50 billion barrels of crude, Wells said. That's more than the reserves of Libya.

Petrobras preferred shares rose 0.8 percent to 45.62 reais in Sao Paulo trading. The stock has gained 30 percent since Nov. 8, when the company announced the size of the Tupi find. Exxon Mobil Corp.'s shares were little changed in the same period.

Petrobras's market cap of about $269 billion makes it the world's seventh-largest company by market value, according to data compiled by Bloomberg.

Rigs Ordered

Petrobras, as Rio de Janeiro-based Petroleo Brasileiro is known, already has leased about 80 percent of the world's deepest-drilling offshore rigs and plans to hire 14,000 engineers, geologists and drillers within the next three years, Gabrielli said.

The company announced plans last month to place orders with shipbuilders for 40 new drilling rigs and production platforms that will cost about $30 billion.

``Petrobras will probably face stiff challenges in this endeavor, as there are significant hurdles to overcome in terms of acquiring basic materials, people and rig equipment,'' said Stephen Ellis, an analyst at Morningstar Inc. in Chicago.

Petrobras will revise its $22.5 billion-a-year capital budget because it was drafted before engineers realized the size of Tupi's recoverable reserves, which may be equivalent to 8 billion barrels of oil, Gabrielli said. At $240 billion, the price tag would be more than the annual economic output of Thailand, Ireland and Malaysia.

20% Gas

The Brazilian discoveries contain about twice as much natural gas in each barrel of crude as reservoirs in the Gulf of Mexico and West Africa, increasing the complexity and expense of the projects, Wells said.

Tupi is about 80 percent crude and 20 percent gas, said Wells, a University of Exeter-trained geologist. For each barrel of oil, there's 700 to 1,000 cubic feet of gas.

``Gas is an important cost consideration because they have to decide whether to reinject it back into the reservoir or construct a rather large pipeline to take it to another destination where it can be used,'' said Candida Scott, a senior director at Cambridge Energy Research Associates.

The high wax content of Tupi's crude and the presence of carbon dioxide, which can damage pipes, also may raise costs, Wells said.

BG Group

Reading, U.K.-based BG Group Plc, which owns 25 percent stakes in Tupi and an offshore field known as Parati, and 30 percent of Carioca, hasn't provided cost projections. Carioca, which neighbors Tupi, may hold 33 billion barrels of crude, a Brazilian oil regulator said in April.

``It's really simply too early to make an estimate of costs,'' BG spokeswoman Jo Thethi said.

Irving, Texas-based Exxon Mobil plans to begin drilling its first exploratory well off Brazil's coast in the third quarter.

``It's a very large area, very difficult to image and it's going to cost a lot of money to develop,'' Chief Executive Officer Rex Tillerson told reporters after the company's May 28 shareholders meeting in Dallas.

[sammyg2]

Originally Posted by tabs

The whole manufacturing process degrades the environment.

not really. At least not in Kalifornia.
The refineries here and the cleanest in the world and have less environmental impact than an average grocery store or warehouse.
It doesn't come easy, the money spent every year at the average refinery in So Cal is probably in the hundreds of millions. Where i work we have an army of people (actually a small army, only around 80) who constantly inspect every possible leak point for emissions or leaks. Every day, over and over.
We use state of the art technology on all seals and fittings ($$$$), we even have a million dollar LDAR video camera that can see invisible vapors that are so small they cannot be detected by sight, smell, or with conventional instruments. It is constantly in use looking for leaks we otherwise would never detect.
Here, refineries are very, very clean. More fumes are emitted by pumping the gas into cars than in the process of making the gas by a long shot.

As a comparison, i recently visited a refinery in Anacortes Washington. They only have 6 double or tandem mechanical pump seals in the entire refinery. We have close to a thousand and the average cost is about $5000 for a smaller one, up to a max of about $55,000 for a big more complex one. All to keep emissions down to near nothing. It adds to the cost of gasoline here but at least the air is cleaner.