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Should we temporarily subsidize oil shale production in response to OPEC

Should we temporarily subsidize domestic oil shale production in response to OPEC?

  • Total voters
    29
no!!!



Wow...23 votes, 23 'no's'.

I am impressed and surprised.
 
radcen said:
Yes and no. They are in the money making business, hence my inclusion regarding long-term thinking. Besides, many corporations diversify. Nothing says they are limited to oil only.
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Well, again, the are investing $100's of millions every year in alternative energy. Exxon Mobile has been investing in electric vehicle research for quite some time.
 
Yes if its necessary of course we should, assuming its a temporary program and the costs aren't outrageous. It would be a mistake to allow years of project development, infrastructure construction, well exploration, etc to go to waste and for companies to make a mass exodus from the market. When this glut ends and prices rise we'd be in a similar position of having to wait years to reach our present levels of production and export potential (especially if the impetus for building the terminals somehow dried up). This is clearly an example where a bit of planning and targeted support makes perfect sense. Ideology shouldn't trump pragmatism.
 
DA60 said:
no!!!



Wow...23 votes, 23 'no's'.

I am impressed and surprised.
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You should not be, the conservatives and libertarians don't like subsidizes to start with.
The liberal, while they usually like subsidizes, don't like anything that benefits big oil.
 
iacardsfan said:
Why don't we let the market do as the market does.
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First of all oil is NOT a free market commodity. An oil cartel made up mostly of dictators control costs for the most part but creating artificial shortages and surpluses.

Secondly, before its even pumped out of the ground, high dollar investors, the oil futures market, buys up almost all of the word's supply and then jacks up the price that you and I eventually have no choice but to pay.

Thirdly, oil has a monopoly on personal transportation and as such a stranglehold on the US and world economy. Free markets don't allow monopolies.

Fourthly, US dependance on oil as its exclusive transportation energy source has and continues to fund acts of terrorism against the very people paying through the nose for it, me and you.

Fifthly, the military costs to defend "our vital interests" in the region (no-fly zones, Desert Storm, etc.) is exponentially more expensive than subsidizing electric cars.

Sixthly, the military costs to fighting wars in response to terrorism in the region is exponentially more expensive than subsidizing electric cars.

IMHO, this is not a government intrusion into the free market. This is a national security emergency and offers a strategic option in defunding our enemies.
 
longview said:
You should not be, the conservatives and libertarians don't like subsidizes to start with.
The liberal, while they usually like subsidizes, don't like anything that benefits big oil.
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I agree, but I am surprised there are not more economic nationalists on here that see it as a competition between our nation and OPEC.
 
Declan said:
No, we should release oil out of the strategic reserves to maintain lower prices to really stick it to OPEC.
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On January 23, 2007, President Bush suggested in his State of the Union speech that Congress should approve expansion of the current reserve capacity to twice its current level.[11]

In April 2008, Speaker Pelosi called on President Bush to suspend purchases of oil for the Strategic Petroleum Reserve (SPR) temporarily.

On May 12, 2008, Rep. Peter Welch (D, Vermont) and 63 co-sponsors introduced the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act bill (H.R.6022), to suspend the acquisition of petroleum for the Strategic Petroleum Reserve.[12]

On May 16, 2008, the U.S. Department of Energy said it would halt all deliveries to the Strategic Petroleum Reserve sometime in July. This announcement came days after Congress voted to direct the Bush administration to do the same. The U.S. Department of Energy did not state when the shipments would resume.[13]

On May 19, 2008, President Bush signed the Act passed by the Congress, which he previously opposed.[14]

On January 2, 2009, the U.S. Energy Department said that it would begin buying approximately 12,000,000 barrels (1,900,000 m3) of crude oil to fill the Strategic Petroleum Reserve, replenishing supplies that were sold after hurricanes Katrina and Rita in 2005. The purchase will be funded by the roughly $600 million received in 2005 from the emergency sales.

On October 20, 2014, a report by the U.S. Government Accountability Office (GA0) recommended reducing the size of the Reserve. According to the report, the amount of oil held in reserve exceeds the amount required to be kept on hand since the need for foreign imports of crude oil have decreased in recent years. The report said the U.S. Department of Energy agreed with the GAO’s recommendation
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Strategic Petroleum Reserve (United States) - Wikipedia, the free encyclopedia
 
longview said:
You should not be, the conservatives and libertarians don't like subsidizes to start with.
The liberal, while they usually like subsidizes, don't like anything that benefits big oil.
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Good points.

Btw, there are now 2 'yes's'...I was afraid it could not last.
 
There's a world wide recession/slump/call it what you will. demand is down everywhere, and OPEC haven't cut production to maintain prices. It's not about you. (or US shale)
 
SouthernDemocrat said:
Once again to play the Devils advocate, the problem with that is that it's not a free market. You have private companies here competing with state owned oil companies in OPEC.
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The US already subsidizes the oil sector more than any other sector, they will survive.
 
Declan said:
No, we should release oil out of the strategic reserves to maintain lower prices to really stick it to OPEC.
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We should do the opposite, build up the strategic reserves when the price is low.
 
No. That is as stupid as paying farmers not to grow crops just to keep the crop price up. ;)
 
Winchester said:
We should do the opposite, build up the strategic reserves when the price is low.
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That makes sense only if we did not have to borrow money to do so and would later sell it for a profit. The government should not get into what it lacks experience to do correctly. Look at all of the vacant property that GSA buys and then hoards, spending millions to maintain it and then simply gives it away at a loss. It is not good idea to have the government play the commodity (or real estate) markets, especially with their track record.
 
SouthernDemocrat said:
I agree, but I am surprised there are not more economic nationalists on here that see it as a competition between our nation and OPEC.
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I prefer the term pragmatist but I agree. I also think it is in everyones interest, except certain producer states and companies, and certainly in the consumers interest, to see production and supply stay as high as possible with the price as low as possible.
 
Winchester said:
We should do the opposite, build up the strategic reserves when the price is low.
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Since prices will go lower, we should sell now and buy later--like stocks
 
Declan said:
No, we should release oil out of the strategic reserves to maintain lower prices to really stick it to OPEC.
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No no no, the SPR is for emergencies only!

Plus the SPR contains enough oil for forty days at current us demand level, it's a drop in the bucket. Subsidizing shale is the better option, because it will put further downward pressure on price to keep production at current levels. Save the reserve for emergencies
 
EMNofSeattle said:
No no no, the SPR is for emergencies only!

Plus the SPR contains enough oil for forty days at current us demand level, it's a drop in the bucket. Subsidizing shale is the better option, because it will put further downward pressure on price to keep production at current levels. Save the reserve for emergencies
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Why should we subsidize it and not just buy it up. We can do it like we do milk--buy it for one price and then force people to pay more than they otherwise would for it. Works for me. The higher everything costs, the more taxes we collect.
 
Declan said:
Why should we subsidize it and not just buy it up. We can do it like we do milk--buy it for one price and then force people to pay more than they otherwise would for it. Works for me. The higher everything costs, the more taxes we collect.
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Because the government doesn't have storage capacity for the volume we'd need to purchase. While the gas tax does need to be raised, it hasn't, and it's a flat rate, not a percentage like sales tax, gas can go up to 5 a gallon and the tax is still only 18 cents, so higher price does not mean higher revenue, good lucking getting congress to approve a high GT
 
EMNofSeattle said:
Because the government doesn't have storage capacity for the volume we'd need to purchase. While the gas tax does need to be raised, it hasn't, and it's a flat rate, not a percentage like sales tax, gas can go up to 5 a gallon and the tax is still only 18 cents, so higher price does not mean higher revenue, good lucking getting congress to approve a high GT
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Higher fuel costs mean higher delivery costs means higher sales tax. I like for them states to get some crumbs too.
 
SouthernDemocrat said:
OPEC is currently using their market power to engage in a price war with the United States in the hopes that it will put our tight oil suppliers out of business. If oil prices drop to a point that oil shale production is no longer profitable (below 60 dollars a barrel), do you think the United States should temporarily subsidize producers in order to keep that production and all of the infrastructure supporting it online for when oil prices inevitably rise again?

Oil prices keep plummeting as OPEC starts a price war with the US - Vox
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Wars (ones which kill, not price wars) are expensive and destructive. The United States having a strong, home based supply of oil reduces its dependence on countries both fragile and undemocratic. We have seen recently how Europe has not reacted with necessary vigour towards Russia over the Ukraine because of its reliance on Russia as an energy supplier. The world has been held to ransom at least twice by OPEC.

Perhaps better than a subsidy would be a mothballing allowance. This would allow the US to benefit from low prices while maintaining the onshore production potential to ensure they stay low and so to stabilise the market at a level where most shale oil production survives. Such a subsidy would have the added advantage of maintaining pressure on shale production costs.
 
Declan said:
Higher fuel costs mean higher delivery costs means higher sales tax. I like for them states to get some crumbs too.
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Delivery costs Our business expenses which can be written off of taxes
 
EMNofSeattle said:
Delivery costs Our business expenses which can be written off of taxes
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Companies build them into the price they charge Food Lion which builds them into the price they charge consumers which pay more sales tax. We might collect an extra quarter, and that is a quarter more to spend on something worthwhile.
 
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