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Wed 27 Feb, 2008 04:39 pm
The Democrats are pushing a new tax on the high profits that oil companies are making by selling gas for $3 a gallon. The Democrats want to use this tax revenue to support research into alternative energy sources.
Republican are opposed to the tax, claiming that the oil companies can do the research themselves.
Far be it from me to ever support higher taxes, but aren't the Republicans completely out of it on this issue? A gallon of gas has on average has 113500 BTUs and consumers are willing to buy energy at $0.000026 per BTU for this form of energy. So as long as the oil companies can make huge profits by selling energy at $0.000026 per BTU what incentive will they have to research alternatives? And if they do research alternatives, what will keep them from selling the resulting energy at the current market price of $0.000026 per BTU? So just how do the Republicans think the oil companies are ever going to market alternative energy sources, much less lower consumer costs in the process?
The oil companies are doing research, just not the research Congress intends. They are researching how to get more oil out of played out fields, how to access oil deeper in the ocean or under artic ice, how to better detect potential oil deposits rather than digging lots of holes, how to refine lower grade crude, etc. Congress wants research into alternate fuels, so that is not going to happen. Still, I think the tax is unfair. When oil was stuck at low levels for twenty years, the oil companies tightened their belts and suffered. The best of them (Exxon), continued to invest in research and development, expanded their reserves and focused on effective and modern manufacturing. Now all of that is paying off and we want to hammer them. If you got lucky and invested in California real estate at the bottom then sold out last year, you have a real windfall and did very little to earn it other than being in the right place at the right time. Should Congress hammer you?
Maybe I'm missing what you're asking. But what makes you think the money from the new tax is going be turned back to the oil companies? A large solar manufacturer just started up production in my area and some of the money to furbish the plant is coming from the gov't in the form of grants. I believe the money brought in by this tax is supposed to go to companies that prove they are working on alternative energy solutions.
By the way, oil companies like British Petroleum have been a big player in the solar energy business for years. General Electric also has a hugh alternative energy department and manufactures geo thermal equipment . I assume they make money at it.
I don't know about you but cost per BTU is largely meaningless to me, mostly because I have nothing to compare, at least in those terms. What I do know is cost per Kilowatt-hour, mostly because that is what my electric utility charges me. So to put this gasoline cost on an equitable basis, let's convert BTU to something I can relate. So let's start with 113500 BTU/gal. Now I'm going to first check if this is reasonable---most hydrocarbons have a fuel value of about 20000 BTU/lb, so if I divide 113500 BTU by 20000 BTU/lb I should get the weight of gasoline per gallon and I get about 5.75 pounds, which is about right---so your number is believable. So now I have to do a conversion----
Off the top of my head this is how I'd do the conversion
113500 BTU*778 ftlb/BTU*1Hpsec/550ftlb*1Hr/3600sec*756Watt/Hp*1Kw/1000watt=33.7 Kwhr/gal
Ok 1 gallon of gas is equivalent to 33.7 kwHr, which is a term that my electric company uses in my monthly electric bill---so if gas is $3 a gallon then I'm paying about 9 cents a Kilowatt hour for gas.
Searching residential electric rates (I googled this) I see that electric rates vary from a low of 7 cents per KWhr in Kentucky/Nebraska to 26 cents a KwHr in Hawaii (boy are you getting ripped off) with an US average of 10.8 cents per KwHr.
Now comparing this to utilities (a protected monopoly) it either looks like the utilities and the gas companies are both ripping us off, or that the costs are pretty competitive between gas and electric.
It would be interesting to look at the energy costs of natural gas, coal, propane, and wood along with the capital amortization of wind, solar and biofuels to provide kwhr cost across the energy industry, however I'm going to take a jump here and predict that they too are pretty competitive at 8 to 12 cents per kwHr.
My conclusion? The gas companies aren't alone---every energy supplier has eyes on my wallet. And that as usual, a profit tax on energy would result in that tax being passed down to the consumer. As an alternate I would propose not an additional profit tax, I would recommend a consumer tax credit. That any action taken by the consumer (meaning you and me and my dog Motley) should be rewarded with a tax credit. That if we started using more efficient vehicles, putting in more insulation in our homes, buying more efficient appliances, installing wind and solar energy systems we should be given credit.
This action would 1) result in a lower energy usage by individual consumers (and a lower carbon footprint) and 2) create new industries and jobs related to installation of these energy saving/alternate energy systems.
BTW this was tried once---under Carter individual tax credits were given for such energy improvements and alternate energy systems. Unfortunately this energy tax credits were one of the first things that Reagan cancelled. It seems that he had friends and campaign contributors in the energy business.
Rap
raprap wrote:
BTW this was tried once---under Carter individual tax credits were given for such energy improvements and alternate energy systems. Unfortunately this energy tax credits were one of the first things that Reagan cancelled. It seems that he had friends and campaign contributors in the energy business.
Rap
Reagan also took down the solar hot water panels on the White House (Nancy didn't like how they looked when flying in via helicopter). Tax payers have been paying for the presidential hot showers ever since.
Also, when Reagan eliminated these tax credits, all the big USA car manufacturers cancelled their alternative energy research programs claiming the programs could not be justified without the incentive. Vehicles actually started to go down in MPGs after that and are only going back up now that the pressure is on.
engineer wrote:The oil companies are doing research, just not the research Congress intends. They are researching how to get more oil out of played out fields, how to access oil deeper in the ocean or under artic ice, how to better detect potential oil deposits rather than digging lots of holes, how to refine lower grade crude, etc.
Which will simply perpetuate the oil companies' stranglehold over the U.S. energy market.
Quote:Still, I think the tax is unfair. [/qutoe]
It may not be a new tax. Another of the news channels that I watch has pointed out that the Democrats simply want to end existing tax breaks for oil companies. I don't know when or how these tax breaks originated.
Quote:When oil was stuck at low levels for twenty years, the oil companies tightened their belts and suffered.
Not enough. Remember the Arab oil embargo, which U.S. oil companies were glad to profit from?
Green Witch wrote:Maybe I'm missing what you're asking. But what makes you think the money from the new tax is going be turned back to the oil companies?
I don't think any of it will be. My understanding is that the Democrats want to use the money to fund research that won't necessarily be done by the oil companies.
Quote:By the way, oil companies like British Petroleum have been a big player in the solar energy business for years. General Electric also has a hugh alternative energy department and manufactures geo thermal equipment . I assume they make money at it.
Then why is gas $3 a gallon? A simple fact that is overlooked is that we have alternative energy technologies that were researched as long ago as the 1970s. We can easily turn sewage into natural gas. This technology is proven and the Walt Disney Company has used it to treat wastewater that is generated at its Florida theme parks and hotels for over 30 years.
We can also turn municipal solid waste (paper and the like) into a solid fuel that resembles soft coal (called K-fuel).
We can treat some waste materials with high pressure and either oxygen or ozone (I don't remember which at the moment) and produce a liquid fuel that is the equivalent of butanol.
And back in the 1980s government researchers at a research center in Colorado found a way to convert leaf and lawn waste into gasoline.
The United States should be making major investments into public transportation. This is an obvious win for us as individuals... and as a society.
I agree about also investing in alternative fuels and other conservation technologies.
But public transportation is already known to work.
One of the problems is that SEC doesnt permit reporting the really BIG reserves of Tar sand and "Oil shales" out there in US and CAnada. The US alone has enough "oil shale" to keep us going flat out for over 120 years. (Only problem is that this would mena a learger dependency on deisel since oil shales are actually wax (keragen) shales that have to be esterified and turned into a diesel fule (complex ester). CAnadas tar sand s will soon, I believe, be reported as a petroleum reserve and that will add another 170 Billion Barrles. PS the US oil shales would produce about 2.4 TRILLION barrels of diesel.
Oil companies dont want to see stuff like this on the market so they can keep their prices at record returns.
Ive worked for major oils and was paid in overrides, I still bite the hand that fed me. These guys would sell their kids.
Ive invested in a number of small energy saving goodies at the farm and , SInce I have a large S facing expanse of barn roof , Ive been looking at solar voltaic for 24 volt system use in the house for lots of things. Im having a solar guy come in mid MArch and Pa offers a nice tax incentive and I hear that, (with a new president who isnt a meat puppet of big oil) the tax incentives would quickly be restored and probably made retroactive a few years. (Least my congressman sez so and hes a GOP)
raprap wrote:I don't know about you but cost per BTU is largely meaningless to me, mostly because I have nothing to compare, at least in those terms.
How dense can you be? BTU is what you would use to compare the energy content of different energy sources. The heat content of all energy sources is measured in BTUs, but the heat content varies from source to source. Gasoline is measured by liquid volume i.e., by the gallon while natural gas is measured by volume under standard temperature and pressure conditions. BTU content is the common denominator. To equate the cost of any alternative fuel with the cost of a gallon of gas you'd have to compute the price of both based on their respective BTU contents.
http://www.exothink.com/Pages/btu.html
Burning a pound of coal will generate 3.66 BTUs of electricity. So if coal costs $1 per pound you'd spend $0.27 cents for enough coal to make 1 BTU of electricity. A gallon of #1 fuel oil has enough energy for 39.8 BTUs of electricity. So if a gallon of #1 fuel oil costs $1, you'd spend $0.025 for enough fuel oil to make 1 BTU of electricity. Comparing a pound of coal with a gallon of fuel oil won't have any meaning if you don't consider their respective BTU contents.
Green Witch wrote:raprap wrote:
BTW this was tried once---under Carter individual tax credits were given for such energy improvements and alternate energy systems. Unfortunately this energy tax credits were one of the first things that Reagan cancelled. It seems that he had friends and campaign contributors in the energy business.
Rap
Reagan also took down the solar hot water panels on the White House (Nancy didn't like how they looked when flying in via helicopter).
Reagan didn't cancel these energy tax credits. They were created with an expiration date and by the time they expired oil was dirt cheap again so Congress didn't renew them.
As for the White House solar water heater: It reached its natural lifespan (such was 1970s technology) and was not replaced because oil prices were cheap once again.
Quote:Tax payers have been paying for the presidential hot showers ever since.
And we weren't before?
Quote:Vehicles actually started to go down in MPGs after that and are only going back up now that the pressure is on.
Actually this is a recent phenomenon. Overall fuel efficiency of U.S. autos has gone down only since the mid-1990s or so due to the rise in SUVs and large pickup trucks on the road.
flaja wrote:raprap wrote:I don't know about you but cost per BTU is largely meaningless to me, mostly because I have nothing to compare, at least in those terms.
How dense can you be? BTU is what you would use to compare the energy content of different energy sources. The heat content of all energy sources is measured in BTUs, but the heat content varies from source to source. Gasoline is measured by liquid volume i.e., by the gallon while natural gas is measured by volume under standard temperature and pressure conditions. BTU content is the common denominator. To equate the cost of any alternative fuel with the cost of a gallon of gas you'd have to compute the price of both based on their respective BTU contents.
http://www.exothink.com/Pages/btu.html
Burning a pound of coal will generate 3.66 BTUs of electricity. So if coal costs $1 per pound you'd spend $0.27 cents for enough coal to make 1 BTU of electricity. A gallon of #1 fuel oil has enough energy for 39.8 BTUs of electricity. So if a gallon of #1 fuel oil costs $1, you'd spend $0.025 for enough fuel oil to make 1 BTU of electricity. Comparing a pound of coal with a gallon of fuel oil won't have any meaning if you don't consider their respective BTU contents.
KWhr and BTUs are both units of energy--work throught the conversion factors.
1 BTU*778 ftlb/BTU*1 hps/550 ftlb*756watt/hp*1hr3600ws*1kw/1000w
so 1 BTU=2.93E-4 Kwhr
Now I dont know where you got the conversion that 1 pound of coal will generate 3.66 BTU's of electricity, but with coal at 12,500 BTU/lb* it is equivalent to 3.7 Kilowatt hours of energy.
*from your referenced table
If you dont believe my simple conversion computations, please feel free to consult
Online Conversions. You'll see "under energy terms" that 1 Btu = 0.000 293 071 083 kilowatt hour.
Rap
flaja wrote:Reagan didn't cancel these energy tax credits. They were created with an expiration date and by the time they expired oil was dirt cheap again so Congress didn't renew them.
As for the White House solar water heater: It reached its natural lifespan (such was 1970s technology) and was not replaced because oil prices were cheap once again.
Oh Contraire' flava I quote
Thomas Freidman from August 1981
Quote:President Reagan's decisions to slash the budget for the development of solar energy, to decontrol oil prices and to force solar resources to compete on a free-market basis with other fuels have combined to revolutionize the infant solar energy industry in this country.
While industrialists are divided over whether that revolution represents a grand opportunity or an unmitigated disaster, they all agree that the solar business will never be the same.
Mr. Reagan's supporters argue that his reduction of Government funding for solar development will put an end to the creeping ''solar socialism'' of the Carter era. Through its largesse, they say, the previous Administration attracted a great number of people who were enamored with the solar idea, but produced equipment that only the Department of Energy could afford to buy.
As for the fate of Carter Era
Carter Era White House solar water heaters.
Quote:Steven Strong was with President Carter when he dedicated the first solar energy application at the White House in June1979. The system, which provided domestic hot water for the West Wing, worked fine until President Reagan removed it shortly after he took office. The Carter-era solar collectors wound up in government surplus and were subsequently acquired by Unity College in Maine, where they still heat the water for the school's cafeteria.
Rap
ebrown_p wrote:The United States should be making major investments into public transportation. This is an obvious win for us as individuals... and as a society.
I agree about also investing in alternative fuels and other conservation technologies.
But public transportation is already known to work.
Couple public transportation with urban planning based on New Urbanism so the amount of travel time and distance would be reduced for daily commutes. I would rather have 2 small grocery stores within a 10 minute walk of my house than a Wal-Mart within a 5 mile drive.
And I am in favor of taking half the lanes in the interstate highway system and turning them into high speed rail tracks. We could do this with a 3 way partnership: the federal government, state and local governments and private citizens who would buy stock in the company to pay for any needed infrastructure and transportation equipment. Then integrate interstate rail traffic with local commuter rail and bus traffic.
farmerman wrote:One of the problems is that SEC doesnt permit reporting the really BIG reserves of Tar sand and "Oil shales" out there in US and CAnada. The US alone has enough "oil shale" to keep us going flat out for over 120 years.
But at what cost to the environment? And if the oil companies own or can acquire access to these energy reserves (through sweetheart deals with the government, no doubt), how will these reserve lower the cost of gas or any other energy source? Giving a monopoly another product to sell doesn't solve anything.
Quote:(Only problem is that this would mena a learger dependency on deisel since oil shales are actually wax (keragen) shales that have to be esterified and turned into a diesel fule (complex ester). CAnadas tar sand s will soon, I believe, be reported as a petroleum reserve and that will add another 170 Billion Barrles. PS the US oil shales would produce about 2.4 TRILLION barrels of diesel.
Why not simply grow more oil-rich crops like soybeans to have diesel fuel now?
Quote:Why not simply grow more oil-rich crops like soybeans to have diesel fuel now?
Diesel fule can be more easily extracted from existing deposits with fatty acid than interfering with the food supply(and youll still have material like bunker oil or coke left over). As weare noticing now, the ethanol fiasco has already affected food costs and supply line shipping and for what? it takes more BTUs to create an ethanol gasahol. It also takes a lot more energy to esterify plant material than to crack and hydroxylate it from oil shale or coal.
Cost to the environment must be addressed in ALL energy schemes, including monoculture agriculture and the total supply lines for making ethanol. We do "life cycle costing" in all such projects, life cycle costing tries to consider the actual expenditure in gathering, separating, shipping preparation etc of fuel from plants even before we inject energy into the prep . and we always seem to discount these costs and the costs of special handling and environmental effects of the alcohol gasoline mixtures (Alcohol is completely soluble in water and co solves the components of gasoline and makes them more soluble and , hence , an even greater environmental challenge than was MTBE.
remember this flaja--"NO SCHEME IS FREE"
farmerman wrote:Diesel fule can be more easily extracted from existing deposits with fatty acid than interfering with the food supply(and youll still have material like bunker oil or coke left over).
Do we not have farmland that is not now in production? I know that my mother's family in NC has farmland- some of which has been in land banks over the years.
Furthermore, vegetable oils can be produced close to existing population centers so transportation won't as much of an issue as it would be for petroleum sources, and the material left over after oil is pressed out of some crops can be used as animal feed so any disruption to our food supply won't be all that great.
Quote:As weare noticing now, the ethanol fiasco has already affected food costs and supply line shipping and for what? it takes more BTUs to create an ethanol gasahol. It also takes a lot more energy to esterify plant material than to crack and hydroxylate it from oil shale or coal.
Vegetable oil can go directly from the press to the fuel tank with just slight modifications to the engine. It doesn't require any additional processing the way corn and petroleum rocks do to be used as a fuel.
Quote:Cost to the environment must be addressed in ALL energy schemes, including monoculture agriculture and the total supply lines for making ethanol.
Soybeans can take nitrogen out of the air and thus don't require as much fertilizer as other crops do and they can be an integral part of any crop rotation plan. Growing soy to make diesel fuel is actually good for the environment.
flaja wrote:ebrown_p wrote:The United States should be making major investments into public transportation. This is an obvious win for us as individuals... and as a society.
I agree about also investing in alternative fuels and other conservation technologies.
But public transportation is already known to work.
Couple public transportation with urban planning based on New Urbanism so the amount of travel time and distance would be reduced for daily commutes. I would rather have 2 small grocery stores within a 10 minute walk of my house than a Wal-Mart within a 5 mile drive.
And I am in favor of taking half the lanes in the interstate highway system and turning them into high speed rail tracks. We could do this with a 3 way partnership: the federal government, state and local governments and private citizens who would buy stock in the company to pay for any needed infrastructure and transportation equipment. Then integrate interstate rail traffic with local commuter rail and bus traffic.
That's an excellent idea. The first corridor to set up would be I-95. I think a high speed train line from Miami to Boston would access a significant portion of the population. Unfortunately, right now the governments (both state and federal) don't have the dollars to pursue something like that. This leads back to the "what is the right tax rate" argument. In order for the government to make the kind of infrastructure investments required, the tax rate must be higher.
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