PeakOil is You
Peak Oil Call and Bet
Re: Peak Oil Call and Bet
by Cog » Mon 12 Nov 2018, 16:59:08
Until we know the total oil production for 2018 it makes little sense to make the bet yet. Maybe after Christmas. I will send you a bong or something. Since the bet is on 2018 oil production versus 2019 oil production.
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Cog - Fusion
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Re: Peak Oil Call and Bet
by kublikhan » Mon 12 Nov 2018, 17:14:39
$this->bbcode_second_pass_quote('marmico', 'T')he oil and gas industry has a tax preference through intangible drilling costs and percentage depletion. The CBO estimates that those preferences amount to ~$23 billion over the next 10 years relative to the widget or any other manufacturer.
Renewable energy companies also have a $23 billion tax advantage over widget manufacturers. Not from a depletion allowance like the fossil fuel industry. But from temporary tax credits like renewable tax credits. IE, the extra money fossil fuel companies get from the depletion allowance is the same amount as renewable companies get from the temporary tax credits. Fossil fuel companies produce far greater amounts of energy however so their per MWh subsidies are far lower than renewable energy companies.$this->bbcode_second_pass_quote('', 'A')nother argument against this option is that it would alter permanent tax preferences for extractive industries but would not make any changes to temporary tax preferences for the renewable-energy sector. This report, however, does not include options to eliminate or curtail temporary tax preferences. Under current law, temporary tax preferences for the renewable-energy sector are scheduled to expire over the next several years; consequently, eliminating those preferences would not have a significant effect on deficits over the decade. Nonetheless, some temporary tax preferences are frequently extended and so resemble permanent tax preferences. For example, the tax credit for renewable-energy production is classified as temporary but has been in effect since 1992. In 2015, JCT estimated that if policymakers extended that credit so that it remained in place from 2015 to 2024, federal revenues would be reduced by $23 billion over that period. Limiting temporary tax preferences for renewable-energy sources would further reduce the distortions in the way resources are allocated between the energy sector and other industries, as well as within the energy sector. However, producing energy from renewable sources may yield wider benefits to society that a producer does not take into account, such as limiting pollution or reducing dependence on foreign governments as domestic reserves are depleted; in that case, preferential tax treatment could improve the allocation of resources.
The oil barrel is half-full.
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Re: Peak Oil Call and Bet
by ROCKMAN » Mon 12 Nov 2018, 17:21:37
aspera - Here's another problem you seem to have: believing those net cash flow charts while having no background that allows common sense to tell you that the shale plays could now have been drilled had the economics been that bad. How could any industry been losing money like that and still kept going? But perhaps you'll reply with the same unrealistic explanations so many others have offered.
As far as the EROEI of the "total global system" the same answer applies. Except now you're dealing with investment decisions made inn countless other aspects of global energy supply. And while govt and "society" policies can have some impact on that decision process all those decisions are based upon economics and not EROEI. Can you name one energy investment decision where they stated the INVESTORS rejected a project due to a low EROEI...even just one project? Or can you name one govt policy that was enacted because the GOVT decided the EROEI was to low? Or one project where "society" refused to allow a project due to a low EROEI?
As far as the EROEI of the "total global system" the same answer applies. Except now you're dealing with investment decisions made inn countless other aspects of global energy supply. And while govt and "society" policies can have some impact on that decision process all those decisions are based upon economics and not EROEI. Can you name one energy investment decision where they stated the INVESTORS rejected a project due to a low EROEI...even just one project? Or can you name one govt policy that was enacted because the GOVT decided the EROEI was to low? Or one project where "society" refused to allow a project due to a low EROEI?
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Re: Peak Oil Call and Bet
by rockdoc123 » Mon 12 Nov 2018, 18:51:31
$this->bbcode_second_pass_quote('', 'R')enewable energy companies also have a $23 billion tax advantage over widget manufacturers. Not from a depletion allowance like the fossil fuel industry. But from temporary tax credits like renewable tax credits. IE, the extra money fossil fuel companies get from the depletion allowance is the same amount as renewable companies get from the temporary tax credits. Fossil fuel companies produce far greater amounts of energy however so their per MWh subsidies are far lower than renewable energy companies.
this is true, which is why it is hard to compare these industries exactly one to one. But for every positive tax treatment the oil industry gets there are similar tax treatments in other industries. The percentage depletion is an example, it was put in place so that all of the stripper wells in the US (which currently make up 20% of US production but back ten years ago were closer to 50%) would not be shut in. That depletion allowance applies to almost all natural resources (albeit at different rates). That sort of incentive isn't much different to my mind from the solar investment tax credit. And the ability to write down non-tangible drilling costs is hardly any different than being able to write down expenses elsewhere other than the speed at which it can take place. But many industries receive substantial R&D tax credits which are also treated as being a large write off in the first year of expenditure. When you start to dig down into all of this the treatment is not egregious. Could tax law for oil and gas be updated? Of course, it could as some of the provisions are 100 years old but caution needs to be applied as there would have been a complete disaster to the oil and gas industry if none of these tax treatments were in place in 2015. And the bigger question to ask is how much actual tax do the oil and gas companies pay in comparison to other industries? IN 2011, as an example EOM, CVX and COP paid combined ~$55 billion in taxes compared to the two largest automakers Ford and GM who paid a combined ~$850 MM even though profits amongst the two groups were not all that much different (CVX $27 billion, COP $17 billion and GM $27 billion).
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Re: Peak Oil Call and Bet
by kublikhan » Mon 12 Nov 2018, 20:25:38
I'll take you up on the bet pstarr. What are the terms?
The oil barrel is half-full.
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kublikhan - Master Prognosticator
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Re: Peak Oil Call and Bet
by aspera » Mon 12 Nov 2018, 20:48:34
$this->bbcode_second_pass_quote('', 'R')ockman wrote: aspera - Here's another problem you seem to have: believing those net cash flow charts while having no background that allows common sense to tell you that the shale plays could now have been drilled had the economics been that bad. How could any industry been losing money like that and still kept going? But perhaps you'll reply with the same unrealistic explanations so many others have offered.
Rockman: I'll presume that you meant to write, "...the shale plays could NOT have been drilled had the economics been that bad." Correct me if I'm wrong, but wouldn't the near-zero lending rates post-2008 recession (leading to massive release of funds into the industry) allow things to appear to balance when in fact they didn't balance? And the graphs show the actual situation?
I had understood that was the very reason why Likvern was doing his work to begin with, and why the dates in those graphs were chosen. His work seems to uncover the common sense since I know that cheap money can cause an industry to pursue behavior that, without such money, would not make sense (common, financial, or otherwise). In fact, isn't this state-of-affairs the very thing we're all waiting on: waiting to see if the post-2008 cheap money warped the playing field? Time will tell, Eh?
$this->bbcode_second_pass_quote('', 'A')s far as the EROEI of the "total global system" the same answer applies. Except now you're dealing with investment decisions made inn countless other aspects of global energy supply. And while govt and "society" policies can have some impact on that decision process all those decisions are based upon economics and not EROEI. Can you name one energy investment decision where they stated the INVESTORS rejected a project due to a low EROEI...even just one project? Or can you name one govt policy that was enacted because the GOVT decided the EROEI was to low? Or one project where "society" refused to allow a project due to a low EROEI?
Rockman: This is getting tiresome, no? Briefly: I and others agree with you. EROEI has not been used by energy companies, or investors (or planner, or Wall Street, or name your own player). We concede that point (although, perhaps I'm phrasing that wrong, since we never made that claim to begin with. In fact, it would be a red herring for you to suggest otherwise. And make one wonder why such vitriol is shown toward what seems an otherwise straightforward metric.)
You might say that we're looking forward, not backyard. That we're looking for metrics that might help as biophysical limits are faced in the coming decades. And that we think EROEI is one metric to consider. It's relatively new. It's seems to emerge from a first principles approach. And although, as you have painstakingly taught us, it is not widely used by your industry, that isn't evidence that it couldn't prove useful.
Oceans rise, empires fall. - Apocalypse Lullaby, Wailin' Jennys.
Plant a garden. Soon.
Plant a garden. Soon.
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