Energy Update, Facts, Taxes, and Truth

We were winning, and we still can.

Hey folks,

You know what is frustrating. 82 percent of you WANT Domestic Drilling. We have the Votes in Congress to pass the lift on the Ban. McCain is on board. Finally. Even Obama sees the writing on the wall. So does Big Oil and the Speculators. So what happens? The Gang of Ten. Five Democrats, five Republicans, come together to attempt to pass this Energy plan. But what they did, is NOT pass a plan where we will begin doing what we nearly ALL know will work. No. What they did was sell out the American people, screw their colleges in the House, and give cover to the Pelosi likes out there to PREVENT drilling from taking place any time soon.

I have a new friend over at API. The American Petroleum Institute. I send her an Email and asked what API thought of the Gang of Ten. Here is her response.

API has reviewed the Group of Ten proposal and commends the senators for being engaged in the debate over how best to address the energy needs of American consumers. As recent polls show, most Americans believe the US should open more of the Outer Continental Shelf to energy exploration and production, and the Group of Ten proposal is aimed at opening federal offshore waters along some East Coast states and the eastern portion of the Gulf of Mexico. Lifting the moratoria on production could boost US supplies of oil and natural gas; increase the nation’s energy security; add additional, well-paying American jobs, and bring billions of dollars into the Treasury instead of sending them abroad. We remain concerned, however, that a number of proposals within the broad energy plan would impede efforts to maximize US energy supplies. For example, increasing taxes on the oil and natural gas industry could actually reduce our nation’s energy security by discouraging new domestic oil and gas production and undermining the Group of Ten’s goal.

Thank you Jane. Let's talk about taxes for a Second. All some of the Democrat Leadership and even Obama seem to want to do it ADD more taxes to Big Oil. Well, another friend of mine found this. Business Week - Exxon: Profit Pirate or Tax Victim?

Exxon: Profit Pirate or Tax Victim?

The oil giant paid $9.3 billion, or 49% of its first-quarter gross income, in income taxes. Is that enough? Depends on who you talk to by Moira Herbst

How would YOU like to pay 49 percent of YOUR income to the Government?

With gas prices averaging $3.63 a gallon, consumers understandably aren't cheering Exxon Mobil's latest profit report. On May 1, Exxon Mobil announced first-quarter 2008 earnings of $10.9 billion—a figure that marks the second-largest U.S. quarterly profit ever, even if it slightly missed Wall Street's expectations.

Perhaps more surprising was this figure buried in the Exxon (XOM) report: $9.3 billion. That's how much Exxon paid in worldwide income taxes in the first quarter of 2008, representing a 49% tax rate on its gross income of $20.2 billion. While not generating as much heat as the income figure—which prompted Senator Hillary Clinton (D-N.Y.) to call once again for tax hikes on oil profits—it did prompt a vigorous discussion in the blogosphere.

Blogger and economist Mark Perry generated a lively discussion when he pointed to Exxon's "all-time high" income-tax figure, noting it was a small portion of the company's overall $29.3 billion total tax payments in the quarter. In Exxon's defense, a commenter IDed as "Buy It Cheap" wrote, "These are relatively small profit margins. One should note that the federal and state governments that tack on their percentage 'profited' the most from every gallon of gas sold all the way along the value chain, without a modicum of risk."

Paying Dearly to Drill

So should the conversation shift from Exxon, profit pirate, to Exxon, tax victim? It depends which side of the number you're on. "Our industry is one of the most heavily taxed in the world," says Gantt Walton, an Exxon spokesman. "While our worldwide profits have grown, our worldwide income taxes have grown even more." Walton says.

From 2003 to 2007, Exxon's earnings grew by 89%, while income taxes grew by 170%. Much of that growth was overseas. Oil-producing countries charge companies like Exxon dearly to dig for oil. Arrangements vary from country to country, but Russia and Libya charge companies up to 90% of the revenues they collect for extracting oil, according to Fadel Gheit, senior analyst for Oppenheimer (OPY). These arrangements—whether production share agreements or royalty contracts—are not disclosed by companies and governments.

In tax terms, the U.S. government is kinder to oil companies. According to Securities & Exchange Commission filings, Exxon paid an effective tax rate of 34% to the U.S. government in 2007, or $5.12 billion. While cheaper than rates from some foreign governments, it's still a higher rate than many U.S. companies pay. A BusinessWeek collaboration with Capital IQ in December, 2007, found that the average percentage of earnings spent on taxes by companies that make up the Standard & Poor's 500-stock index was 26%, well under the 35% official U.S. corporate income-tax rate. Companies achieved lower taxes in a variety of ways, from taking advantage of lower tax rates abroad to benefiting from industry-specific breaks.

Now I want you to read this next part carefully. This is NOT want they want you to think.

Industry-Specific Tax Breaks

However, Exxon's critics point out that its stated tax rate doesn't reflect a number of deductions and tax breaks that are afforded the oil and gas industry in the U.S. Erich Pica, a spokesman for the environmental group Friends of the Earth, says the U.S. federal tax code contains more than $17 billion in breaks to benefit the oil and gas industry for fiscal years 2007-11.

That $17 billion is made up mainly of tax breaks newly offered or extended in the Energy Policy Act of 2005, including a "percentage depletion allowance" that allows oil companies to deduct 15% of their sales revenue, to reflect the declining value of their investment, and 70% of their drilling costs.

Additionally, oil and gas companies pay reduced royalty fees on products they recover from federally owned waters, which Pica says could cost taxpayers $65 billion over five years.

OK. What they want you to do here is take $9.3 billion, which they PAID, subtract $17billion in breaks, then think about YOU paying $65 billion. It's mind games. Big oil is getting off Scott free and making gazillions in profits while YOU are footing the bill. Sorry, just flat out wrong. They PAID 49 percent in TAX. Take away the breaks, they would have paid that much more. I know I know, some in this country would LOVE Big Oil to pay 90 percent of their profits to the Government. They would LOVE to steal Big Oil's profits. Some, like Senator Maxine Waters.

"And guess what this liberal would be all about? This liberal would be all about socialize -- uh, uh, would be about basically taking over and the government running all of your companies."

Politicians and Environmental Groups Take Aim

With energy prices spiking and inflation rising across the U.S. economy, the notion that energy companies pay too much in taxes isn't likely to win over the public or to play well on the campaign trail. Indeed, on May 1, Clinton took the opportunity to promote her plan to have oil companies foot consumers' bill for the federal gas tax this summer. "There is something seriously wrong with our economy when Exxon's record $11 billion in quarterly profits are seen as a disappointment by Wall Street," said Clinton. "This is truly Dick Cheney's wonderland."

We all already know she is a Socialist.

Environmental groups are also mobilizing to target the oil and gas industry. "We don't think oil companies are paying enough taxes," says Josh Dorner, a spokesman for the Sierra Club. "There are literally billions of dollars in subsidies and giveaways and misguided regulatory schemes. Politicians have chosen Big Oil before clean energy and their constituents."

No they haven't {Sigh} These people are completely clueless. Seriously. Let me ask the Government this. OK, Big Oil paid you 9.3 Billion in taxes. They MAKE about 8 cents a gallon. YOU make about 18 to 20 cents per gallon, more in other taxes on energy. What have you done with all the PROFITS YOU have make from doing NOTHING?

The debate over whether Big Oil pays too much or too little is taking place alongside a battle for government resources between conventional and renewable energies. When Congress passed the 2007 energy bill in December, it kept tax credits for oil and gas companies while allowing those for wind and solar power to expire this year. Democrats, including House Speaker Nancy Pelosi (Calif.), are now pushing for the Renewable Energy & Energy Conservation Tax Act (HR 5351), which would repeal $18 billion in tax subsidies for large oil and gas companies.

Here, there's little surprise: Exxon opposes the legislation, while environmental groups are backing it.

Thank you Kathy.

And people wonder why I call them Envionuts and the LWL. DRILL HERE DRILL NOW. Problem solved. You want to know how many people are really starting to wake up? Right here is Sunny Florida, where MOST would consider themselves Democrats or Liberals, 67 percent of registered voters are FOR it. This is what is really bothering the Liberals. By the way, Florida is still off limits with this new Gang of Ten Energy Plan.

Why am I continuing to fight this fight? Because the more FACTS and TRUTH people learn about this, the more people WANT to DRILL HERE. The more people learn about the lies and misleading information that the Left continues to put out, and the fact they are backing on Americans short attention span and will get comfortable with the lower gas prices at the moment, the more people are getting on the right side of this issue. Again, I have no problem with seeking alternative Energy. But we are decades from any kind of VIABLE plan. Regardless of what Father Gore or T. Boone Pickens says. Lets solve the problem NOW, then work of AE while we are enjoying FREEDOM and lower gas prices. We CAN do both.
Peter

Sources:
Business Week - Exxon: Profit Pirate or Tax Victim?
Energy Tomorrow - Poll
API- Website