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Valley Firms Push California Oil Tax
isabotage3 writes, "Still smarting from California's recent enactment of emissions caps, the oil industry is confronting another assault in the Golden State — this one bankrolled in part by Silicon Valley tycoons pushing to fund conservation and alternative-energy initiatives with a tax on oil output. Slightly more than half the money raised by the Prop 87 tax would be earmarked to help cut gasoline and diesel use. Another 27 percent would be put toward alternative-energy research at California universities. The remainder would be used to help start-ups, retrain energy workers in new fields, and for administration." Oil companies claim the backers of Prop 87, some of them venture capitalists, would profit from state money flowing into the alternative-energy projects they are funding.
It's cool to be green. Being 'enviromentally friendly' is currently some of the best marketing you can have. Take for instance, Richard Bransons latest pledge.
I'm not opposed to this sort of corporate behaviour myself.
Oil companies claim the backers of Prop 87, some of them venture capitalists, would profit from state money flowing into the alternative-energy projects they are funding.
Shocking! Because I'm sure that the oil industry never profits from any legislation that they push, right? Why is it surprising (or wrong) that people are pushing bills that help them?
I live in Silicon Valley. I often hear anti-prop 87 ads on the radio and TV. One day as I was driving to work I decided to listen to the ad carefully. At the end, as required by law, they state their sponsors. They (quickly) list a number of individuals, the last 2 or 3 of which are actually oil companies. It is for this reason that I decided to look into the issue. This tax will be levied on the oil companies. They will be forbidden by the law to pass the cost on to consumers, so this will NOT raise gas prices. So, to recap: 1) oil companies have to pay their fair share to improve the environment; 2) the tax cannot be passed on to cunsumers; 3) This will benefit researchers and universities Do not be fooled by the anti-prop 87 propoganda.
Ads? What ads?
Yeah, except california is a big state. They wouldn't stop selling gas there if it meant the gas was being used to burn babies alive, they'd still sell because it's such a big market.
This is just an attempt at the 'blame game' to punish oil companies and help California seem more 'progressive'. While they're at it why don't they tax Coca Cola so that we can find soda-alternative drinks! Or maybe tax Silicon Valley itself a little higher to fund research into alternative computing?
There are no trails. There are no trees out here.
Oil companies claim the backers of Prop 87, some of them venture capitalists, would profit from state money flowing into the alternative-energy projects they are funding.
Ah, business patent violation I'm sure. No wonder the oil companies are mad.
Finkployd
It reminds of that manuscript recently dug up from the 14th century.
If there's one thing we don't need, it's the King and his "men of science" dictating their values to the marketplace. It's businesses like mine that are leading this nation to prosperity. If I have to refrain from tossing my pissbucket out the front steps, and deliver it all the way to the cesspool, it will cost me money, and I may have to lay off some peasants as a result. Besides, it hasn't been proven that these so-called bacteria even exist, and if they do, maybe they don't cause the black death. Maybe they will make our teeth straight and white forever. I say we should wait and see.
Sometimes government-mandated values work for the greater good.
So, you think it is ethical to tax people (take money by force) to hand it over to private entities, for political purposes, while not actually having to provide anything useful, while knowing that the results of the research will not be free (as in beer)?
Or is it just that you think Oil Companies are evil and anyone opposing them is good? Last time I checked, the Government made more on Oil Taxes than the Oil Companies made in profits.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
A far more productive activity with respect to reducing fuel usage that would not involve California creating yet another destructive tax would be to allow high density development in places like Silicon Valley. It is the height of stupidity that the same political class that wants everyone off the roads and/or to take public transportation adamantly refuses to allow the high density construction that would make it feasible. Far more fuel use reduction could be obtained by simply letting developers turn the vast suburban sprawl of places like Silicon Valley into an urban environment, but apparently this offends their sense of aesthetics.
If they were serious, they would start with the absurdly contradictory positions of city planners rather than inventing a new tax that will invariably get pissed away with no obvious benefit.
> the free market will select a better winner than the government can.
Just like it did with HDTV standards and the US cell phone market, eh?
While I agree that the law in question is bad, blind faith in the free market, while fashionable, is misplaced.
there is no need to sign your posts. this isn't usenet. your username is right there above your post. stop it.
There was no "less" on the end of his statement.
Bush has been spending freely like there's no tomorrow. No war, corporate perk or handout to the rich that can't be put on the credit card for others to pay later. While cutting taxes for the top 1%.
--- Jump!! Fire!! Bullet time!! - Lego version of the Matrix
Tax a business, their costs increase, they pass that charge onto their customers. If you are going to tax it, tax it at the pump so everyone knows about it. Provide tax relief for people who will be impacted, and get on with it.
Know why gas went to $3/gal in the US?? Because PEOPLE WERE WILLING TO PAY IT. They griped, they whined, they complained, but everyone still went down to the gas station once or twice a week and filled up. Don't believe me?? Why do people pay 5 cents more a gallon for gas when they could go across the street and get it for less?? Or 20 cents when they could drive 5 miles and get it for less?? Because they can. Oh, they'll whine about the cost, and then they'll eat Kraft Macaroni and Cheese one night a week instead of spending $25 for pizza for the family to make up for it.
My heart goes out for the minority that can't afford it, but businesses are in business to make money, not provide charity work. The funniest thing I heard was someone whining about Exxon's record profits. I didn't hear anyone offering to give them money several years ago when their profits were in the crapper.
My daughter, bless her heart, wanted a new car. She went out and bought a Yaris and now gets 40MPG. Toyota can't keep them on the lot. I bought a motorcycle a year ago and get 50MPG, so there are already means to reduce consumption.
As for those 'cheaper alternatives', where are they. Ethonal?? I've read mixed reviews, some claiming it's the answer to everything, some claiming that the resulting agribusiness pollution might be worse than what comes out of our tailpipes now. Hybrid cars?? First, they cost more. Maybe their effective MPG makes up for some of it, but the anlysis I've seen says they are still more expensive in the long run once you start swapping out batteries. Biodiesel?? There is only so much french fry oil in the country.
My fellow citizens of the USA have it easy -- just look at the price of gas around the world. This is one of the cheapest places to by it.
And we still whine....
I rarely read replies, it's my opinion and if you thought about your opinion a little more, I'm OK with that.
We're the world's 6th largest economy. If we tank, they tank. Demand plummets because California's out of the equation. Oil prices fall, and their stock falls.
Plus, we get to pursue alternative energy a lot faster. California will be bruised but we'll come out of it even better off than Brazil.
Then the rest of the world will follow our example, and the oil companies will get bent over like a cocktail waitress wandering into the NFL post game locker room.
--- Grow a pair, liberals... stop letting the Republicans bully you!
I prefer the "u" in honour as it seems to be missing these days.
Because the Myth of American Capitalism was useful in making a stark contrasts with the evil Communist Russians during the Cold War, and has since been useful for dismissing everything from environmental regulation to deciding which businesses are to receive subsidies (by calling subsidies for the other businesses "socialist"). They aren't really conservatives, they're just using words with their base that get them elected. It is customary to ignore all of the intervention in the economy except the ones that you don't want. In the end they funnel their pork to their states, and despite electing them based upon their capitalist rhetoric, their constituents are pleased to receive the handouts and vote the same in the future.
More importantly, private business can do it a hell of a lot better than the government could hope to, and the free market will select a better winner than the government can.
You have proof? Or is this just a statement of fact where no proof exists?
There is no such thing as a free market. It's like Santa Claus, or the tooth fairy, or WMDs in Iraq. There are always people who control the landscape of the market, whether it is the big boys (AT&T, Microsoft, oil cartels, etc) or the government (often the proxy for the big boys). Whether market dominance is long term or transient, the affect on the market is detrimental and permanent, and never in favor of the individual citizen.
I'm not defending the government, because it is usually filled with people who are unfit to govern. I'm just saying, putting your trust in the free market is like walking into a seedy Mexican bar where known organ harvesters hang out saying, "Yessiree, I just got the results of my medical exam, and I have perfect kidneys, and a beautiful purple-grey healthy liver. Yep. I have great body parts."
As far as stuff like alternative energy sources go, there's no money to be made until those sources have been found, developed, and made economical vis-a-vis petroleum. And believe it or not, many modern advances have come because of government investment in research. I'd go so far to suggest that government research has resulted in more economic health than private research.
Consider the internet as a prime example.
What was the "free market" doing? The participants were fighting amongst themselves, and not advancing anything at all like the internet. We had IPX/SPX, NetBEUI/NetBIOS, yadda-yadda-yadda. It took substantial (though not massive) government funding to provide us with a simple, resilient, adaptable protocol suite, and the infrastructure to make it useful. If we were stuck with the "free market," we'd all be using MSN dialup right now, except the oldtimers, who'd be using AOL (who would've purchased everyone else).
The free market has shown itself to be a fiction. When you pull the curtain back, you won't find a kindly, slightly-bewildered gentleman. You'll find the hideous faces of the corporate monsters who will offer you no alternative but their alternative. When they are mighty, they will eat the smaller competition who might possibly challenge them someday. They will purchase protection from the government where they can, as if it is the government's duty to protect them from their customers.
I don't believe the government should meddle in everything. But I don't think we should leave something as important as our future in the hands of corporations, either.
Microsoft is to software what Budweiser is to beer.
In the long run this might actually be a good thing for California. If it encourages oil to be consumed from the Middle East or Venezuela first, then it just means that oil is still in the ground to be pumped out and sold later, when the price will probably be higher. Given the rate at which oil prices have risen and will probably rise in the future (well ahead of the rest of the market), keeping the oil in the ground for later probably isn't a bad investment. However, it's not one that most companies would make, because they're too focused on short-term profitability.
By making it economically unfeasible to use the oil now, Californians might be unwittingly doing themselves a favor: they'll suffer now, but once the oil elsewhere is gone and they're all that's left (of easily extractable reserves), it's fat city.
The only exception to this would be if there was some plan to take the money that would be gained from pumping and selling that oil now, and doing something with it that would be more profitable than just leaving it in the ground until the price goes up. Given the way that both industry and government squander cash, I suspect this is unlikely. Whatever they're going to make by selling it now will probably just be blown on stuff that has little or no lasting impact.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
Incorrect. The prop doesn't tax the oil companies per se. It taxes oil pumped out of the ground in California. The law does say they can't pass the cost on to their customers, the refineries. Let's assume that the producers follow this, rather than justifying price hikes by being just a little bit creative. Costs for in-state pumping will go up, but the cost to run a well is constant, thus low-yielding wells will be shut down sooner. And companies doing exploration are going to look elsewhere rather than explore in Cali. Thus in-state production will go down-- estimates I've read go from 10-20% reduction in in-state production over 5-10 years. Consumers will still drive, demand will remain fairly constant, which means more oil will be shipped in from Alaska and overseas. Shipped in oil is more expensive. Refineries will have to pay the higher price for out-of-state sourced crude, and they most certainly can and will pass those higher costs on to their consumers. Net result-- if 87 passes, Cali gas prices will go up. Economics of commodities is a byatch.
The other thing I anticipate happening is that the oil companies are going to redouble their efforts to get permission to drill in Federal controlled waters. That means anything more then 3 miles off the coast. There is absolutely nothing Californians can do about it if Congress lets them do this, it's Federal "land" (at least treated as land) covered by federal law. And guess what, oil pumped out of Federal lands isn't subject to prop 87's severance tax. Problem solved!
1984 was supposed to be a warning, not an instruction manual.
That's a great idea! I'll find 30 or so of my friends, give us a year and 30 Million dollars and I'll give you a commission report that says "Spend less"
I support the troops. I pay f'ing taxes.
how come whenever anyone proposes stuff like net neutrality or alternative fuels the conservatives say "the free market will take care of it"?
I'm a conservative in the strict Constitutionalist sense of the word. I think limited regulation is good but too much regulation or no regulation is harmful.
I see net neutrality as a solution in search of a problem. Some ISPs are out there threatening to charge the Googles of the world extra fees for carrying their data, throttling VOIP so it can't compete with their service as well, etc so people here at Slashdot are in a tizzy that something needs to be done to regulate it. That's the wrong attitude because it instantly assumes that the customers are completely powerless and can exert no force on the markets themselves. The minute popular sites like google get throttled, customers will be all over their ISPs complaining about how things don't work right and that if it doesn't get fixed, they're leaving for a competitor who won't engage in such practices. If every provider in the area engages in such things, someone will step in and change that if the customers rattle their cages loud enough. They could build a co-op, threaten to terminate utilities monopoly rights to the roadsides unless they comply, etc.
Legislation is the last step to try, not the first. Government is rarely the solution to problems because it is the largest tool you have and it WILL affect things in unforseen ways. Net neutrality gets implemented and suddenly, ISPs can't setup a low latency path to popular game servers to improve their customer's gameplay, they can't cache large popular files with a proxy, etc. Depending on the language of the bill, they might not even be able to peer with a larger network with faster pipes than a smaller network. There are tons of unforseen consequences in such broad legislation and you take a huge risk that you're going to make things worse... and good luck on fixing it after one bill has already been passed, it might take decades.
All that said, just up the thread here, people asked why conservatives think we have a free market economy. We don't think we have a free market economy. LOTS of us regular joe fiscal conservatives believe that the amount of regulation and taxation is EXTREMELY out of control though. Personally, I want to see the federal government reduced to what it's legally allowed to do under the Constitution (ie, handle interstate commerce and foreign relations (including military) and that's about it) and a lot of conservatives would agree, even many who are trying to get into office for the first time. However, once you're actually in office, your idealism all fades away as you realize you have no hope of changing anything because if you refuse to take pork for your district to set an example, the money will just get spent somewhere else and your opponent will accuse you of not bringing home the bacon. Try to reduce the federal entitlement programs (which are ALL ENTIRELY Unconstitutional IMO) and you get demogogued about wanting to starve children and old people, throw people out into the streets, etc. The longer you stay a part of that system, you will eventually lose faith that you can push your ideals into action.
In fact, that is one of the reasons why it was a HORRIBLE idea to make Senators popularly elected instead of chosen by state governments. It's the United STATES of America and the Senators were there to push for the interest of the states instead of being beholden to the immediate interests of the people. The Senate was once the chamber of esteem and statesmenship but today, it's more raucous than the house because usually a Senator has to pander to a significantly larger group of people and often, will only play up to the major population centers while ignoring the rest of the state. Here in NY, most of the state is actually fairly conservative - you'd think we were a midwest state but New York City dominates the state's politics on every level and instead of having a balance
Don't leave your mind so open that your brain falls out. Don't close it so much that you cut off the blood.
Tax a business, their costs increase, they pass that charge onto their customers.
The authors of this bill know that, and have included language in it that attempts to prohibit passing on the costs to the customers. Whether it will work or not, I have no idea, but your objection misses an important feature of the bill.
Edith Keeler Must Die