Offshore Drilling Ban to be Lifted by Bush

[Scrooge McSam]

Kevy, do you think the Iraq oil revenue sharing plan proposed by the administration and supported by the oil industry is fair and equitable?

[Kevy Baby]

Originally Posted by Scrooge McSam

Kevy, do you think the Iraq oil revenue sharing plan proposed by the administration and supported by the oil industry is fair and equitable?

I can guess from the way the question is asked that you believe that it is not fair and equitable (if I assume incorrectly, please accept my apology).

So, since you do believe this, please explain why.

[Scrooge McSam]

No apology necessary.

I struggle with it. The oil companies retaining 70% does seem high to me. The Iraqi government certainly seems to think so as well, but of course they would, wouldn't they?. Of people I've talked to, most are surprised to hear the actual breakdown. I know I was.

And you?

[Kevy Baby]

Originally Posted by Scrooge McSam

I struggle with it. The oil companies retaining 70% does seem high to me. The Iraqi government certainly seems to think so as well, but of course they would, wouldn't they?. Of people I've talked to, most are surprised to hear the actual breakdown. I know I was.

Where are you getting the 70% retention? Any foreign investment in Iraqi oil would be based on flat fee based contracts: they would get NO revenue from the sale of oil.

Besides, it would be a very risky investment for an oil company given the instability of the Iraqi government. Analysts are not even sure that US oil companies would even want to venture into this.

[Scrooge McSam]

Originally Posted by Kevy Baby

Where are you getting the 70% retention? Any foreign investment in Iraqi oil would be based on flat fee based contracts: they would get NO revenue from the sale of oil.

Besides, it would be a very risky investment for an oil company given the instability of the Iraqi government. Analysts are not even sure that US oil companies would even want to venture into this.

Old link (knew I should have bookmarked that article), but this is close to what I read.

Oil companies would immediately take 70% of profits to pay for their infrastructure improvements, then revert to around 20% after those costs are paid.

[Morrigoon]

Not to derail with a reference several pages back, but Alex there is a flaw in your grand plan for your next vehicle. Speaking in terms of damage to the environment, there is an issue with your "plug-in electric" vehicle plan. The energy from your electrical system comes from somewhere, and that somewhere often takes its own toll on the environment.

Now, obviously, if we switched to nuclear, it would be a different kind of damage than the use of coal. Sure, we have hydro and wind power, but if I recall from a thread about a year or so ago, only a portion of our power comes from wind and water.

***

I don't understand why there isn't more talk of biodiesel. And by biodiesel, I don't mean ethanol. Biodiesel can use oil from more sources than merely corn, which is already inefficient to produce. Besides which, we already use quite a bit of oil in this country (Fast Food Nation, anyone?), which could be recycled into fuel thus not only reducing the amount of oil production needed, but also providing some cost recovery for the food service industry and less oily substances entering our water systems by way of drains.

What's more, certain types of biodiesel do not even require special equipment on the vehicles (instead the oil is treated to prepare it for use) - so vehicles on the road today (even that beat-up '63 Beetle in your local high school parking lot) could be running on biodiesel. Today's diesel vehicles are also highly efficient (making CA's issues with the sale of new diesel passenger cars somewhat silly).

And if we can't produce enough palm/peanut/corn/etc. oil? We can patronize any of a number of 3rd world countries, whose mainly agricultural economies would benefit, thus raising the quality of life for people around the world. But because so very many countries could produce what we need, we need not be slaves to their resources.

One possible issue with this sunny outlook would be the potential for food shortages in countries who switch over too much production from food to fuel, but with nearly every nation around the world able to produce it, the pricing would be kept fairly low, minimizing the possible impact on food.

***

As far as the impact of speculation on oil prices - I agree that that is where the problem is. Only there's a hitch: we can't stop oil futures from being traded in the major markets because of the practical applications of futures trading. Many companies anticipate their needs and guarantee access to them by purchasing futures in their necessary raw materials (be it cotton or oil, or whatever). Others use futures to hedge their bets and average out the cost per unit needed by stocking up (in a theoretical sense) on what they may need in the coming months, so if there's a sudden drastic increase in price, it doesn't completely destroy their ability to make a profit on their core business.

Airlines, for example, try to stock up on oil futures when prices dip, to soften the blow when prices rise, bringing down their average fuel cost per flight mile.

When the fear is of constant increasing prices, it becomes a self-fulfilling prophesy as they continue to buy any fuel below the price they fear it's going to rise to (until, due to demand, it does indeed rise to that price). Then on top of the "legitimate" buyers of futures, there are speculators, who hope to sell their shares to those same companies when their stores of fuel become limited.

(legit put in quotes because, of course, speculation is, in fact, legit in most respects)

[Alex]

[Directed at Morrigoon]

Yes, electric is not a panacea, but it is a mode of delivery I am willing to work with. I am perfectly aware that electricity is not without cost. However, there is also that fact that the negatives are easier to ameliorate when they are produced at a single site (such as from a electric plant) than when we have to clean up the mess of 500 million individual fuel fires.

So a car that fulfills 80% of my driving needs on electric but still has the capacity to use more traditional fuels for the other 20% is a compromise I am willing to make. If more of that electricy can be drawn from nuclear, solar, and wind, then wonderful. I personally am not a fan of hydro in the American Southwest.

But I make no claim to sainthood. It was just in response to the idea that unless you are personally doing everything possible then just shut up. I'm not, but I'd venture to say that I have done more than most.

I'm willing to consider biodiesel if it is moderately convenient to my driving practices (currently it would not be). However, biodiesel is also not a panacea as fulfilling our energy needs would put pressures on food prices (if not directly through use of food for fuel then indirectly through increased competition for arable land) and is still essentially creating a few billion individual fires that while better than other fires still isn't all that ideal. But I'm not opposed to it if there is a sufficient distribution network for my needs.

[Alex]

Come on, don't make me do your work for you.

The reason that corporations should be treated differently in charitable giving is that they are simply a channel by which wealth flows to individuals. Whether that is executives, employees, downstream suppliers, or stockholders.

Beyond certain minimums it is not reasonable to expect a corporation to place altruism and charity above its primary reason for existing. It falls to the individual recipients of that wealth to act humanely and engage in charity and service to their fellow man. Especially since, inherently, any charity performed by a corporation is just passed on to as increased cost to consumers or decreased wealth to individuals.

[David E]

Here are some photos of the environmental destruction that has devastated the wildlife where there are existing oil installations in Alaska. (Oil wells and oil pipeline). As you can see, it has been “spoiled”. “Forever”.

And a photo of the proposed drilling site in summer where you can see the bounty of delicate endangered flora and fauna that flourish in the fragile ecosystem that must be preserved at all costs.

Lastly, a diagram showing the size of the exploration area relative to the entire ANWR area.

[Strangler Lewis]

Originally Posted by Alex

Come on, don't make me do your work for you.

The reason that corporations should be treated differently in charitable giving is that they are simply a channel by which wealth flows to individuals. Whether that is executives, employees, downstream suppliers, or stockholders.

Beyond certain minimums it is not reasonable to expect a corporation to place altruism and charity above its primary reason for existing. It falls to the individual recipients of that wealth to act humanely and engage in charity and service to their fellow man. Especially since, inherently, any charity performed by a corporation is just passed on to as increased cost to consumers or decreased wealth to individuals.

In, oh, the early 20th century, stockholders could sue to enjoin corporate charity as ultra vires and a waste of corporate assets and courts would side with them. Ultimately, courts came around to the view that corporate charity had a public relations component and so was a reasonable corporate expense.