The Big Lie - Big Oil Version

It is often said that if you repeat a lie often enough, people will begin to believe it. Obama and his flunkies in the media have mastered this technique. Case in point: the myth that energy companies are reaping billions of dollars in government subsidies.

Listen to any liberal or democrat. Read any paper. Watch any news broadcast or talking heads opinion show. The story is remarkably similar. Big Oil is raping the American taxpayer, enjoying record profits while receiving billions of dollars in taxpayer subsidies, all resulting from a massive lobbying campaign.

The only problem with this narrative is that none of it is true.

First, start with the definition of "subsidy." In economic terms it is "A payment from government to individuals or businesses without any expectations of production."

That definitely describes the solar, wind, electric car, and ethanol industries. But it's a far cry from oil and natural gas production. There, we are talking about the tax code, not government handouts. Here are the tax treatments targeted by democrats.

Domestic manufacturing tax deduction -- $1.7 B.  This is a tax deduction given to every manufacturer in the US.  Per CNN, it was "designed to keep factories in the United States."  If that deduction were eliminated for oil companies only, it would mean singling out oil companies from all other manufacturers.

Percentage depletion allowance -- $1 B.  Any industry can write down a portion of the cost of its capital equipment as part of the cost of doing business.  Right now, oil in the ground is treated as capital equipment.  Again, this "subsidy" amounts to how the cost of doing business is defined.  All companies get it, not just oil companies.

Foreign tax credit -- $850 million.  Companies get credit for taxes they pay to other countries.  All companies get this "subsidy," not just oil companies.  Should a company pay tax on tax?  Should only oil companies pay tax on tax?

Intangible drilling costs -- $780 million.  According to CNN, "[a]ll industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year."  Among these four tax "breaks," this smallest one was the only one that treated oil companies differently.

The above address taxes that are not collected from the oil companies. What about actual tax payments?

Exxon recently released its first quarter results for 2011.  The number grabbing the headlines was Exxon's profit: $10.65 billion in a single quarter.  The number not given quite as much exposure was the taxes it paid in that same quarter:  $8 billion, or 42% of income before taxes.

And what does Exxon do with all that money it has left after paying $8 B in taxes?  It put $7.8 billion into capital and exploration, as part of its plans "to invest between $33 billion and $37 billion per year over the next five years to develop new energy supplies."

In any other industry, that would be called "research and development."  Exxon is plowing 73% of its after-tax profits back into R&D.  Who would be better at spending $4 billion of energy companies' earnings in an attempt to provide our energy in the future: the energy companies or Obama's energy czar?

But there is at least one member of the Big Oil club that gets subsidies from the U.S. government. Any idea which one?

It's Petrobras, the state-owned Brazilian oil company.

The U.S. is going to lend billions of dollars to Brazil's state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil's Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil's planning minister confirmed that White House National Security Adviser James Jones met ... with Brazilian officials to talk about the loan.

A few more tidbits:

• The amount of earnings not collected in taxes is about $4.3 billion per year -- about 0.2% of this year's deficit and enough to fund about 10 hours of current US government spending.
• A full $3.55 billion of that amount (82%) is due to the way taxes are treated for all industries or manufacturers.  To change these tax laws only for oil companies would require singling them out among all industries for special mistreatment.
• The only tax in which the oil industry seems to get special treatment compared to other industrids is intangible drilling costs.  The amount of that subsidy?  That would be $0.78 billion per year -- enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreign-owned and state-owned oil company for drilling offshore Brazil.
• Oil companies already pay tax rates of 40-50% of income.

As for the notion that Big Oil gets special treatment because of its massive army of lobbyists, consider this.

... the Oil & Gas industry ranked only 19th in the amount of money contributed to politicians in the 2008 election cycle: $17.7 million.  Who was number one?  Lawyers, who contributed $126.9 million, or over seven times as much as the Oil & Gas industry.  The Education lobby gave $37.4 million, more than twice as much as Oil & Gas.

Of course, lawyers and teachers unions are obama allies, so the lapdog media would never report that fact.

One final point, again unreported - nay, buried - by obama's lackeys in the MSM:

According to the DOE's Energy Information Administration, every time you fill up your gas tank, more of your money goes to taxes than goes to refining costs and profits combined.

Facts are such inconvenient things when you're trying to spin a story...

This Message Brought To You Courtesy Of...

Due to time constraints, this post is shamelessly stolen borrowed linked to from Moonbattery:

In the race to achieve the status of America’s worst president, Barack Hussein Obama has left Jimmy Carter choking on his dust.

Obama has hit one more Carter benchmark – both saw gas prices double in their first term of office.

In fact, while just barely, Obama has seen an even higher gas price increase than Carter dealt with under his administration.

Under the Carter administration, gas prices increased by 103.77 percent. Gas prices since Obama took office have risen by 103.79 percent. No other presidents in recent years have struggled as much with soaring oil prices. Under the Reagan administration, gas prices actually dropped 66 percent.

The difference is that Obama has been causing gas prices to rise on purpose, as part of the insane, antihuman green ideology that animates his hard left base. This is why the Keystone XL pipeline was nixed, why drilling is not allowed off most of our coasts, why the BP spill was seized upon as a pretext to strangle the Gulf oil industry, why drilling on government-owned land is down, et cetera.

Thanks, guys.

Shocking News

Would the government mislead us?

Would a large corporation mislead us?

Would a hybrid government/corporate organization mislead us?

** Snort **

I speak, of course, of that unholy alliance between obama and General Motors, and its bastard offspring - the Chevy Volt. (H/T Doug Ross for the link.)

About eight months ago some owners of Chevy Volts complained that charging cords were overheating, sometimes to the point of melting. At the time, GM blamed owners, saying the wall outlets were the culprits. We now finally have GM addressing the safety concerns and agreeing to replace charging cords for all 9,500 Volts that have been sold since production began. But in what is becoming a new public relations precedent, the move is not being called a "recall."

The non-recall recall is instead referred to as a customer satisfaction action which is designed to "offer a more consistent charging experience."

"More consistent charging experience" - as in your garage doesn't burn down.

The political strategy is becoming more and more evident at GM as Chevy Volt sales continue to struggle and the 2012 presidential election nears. Excuses have been made for low sales of the Volt, starting with supply constraints and more recently involving a Republican conspiracy to hurt sales. GM refuses to admit the real reason that the Volt doesn't sell well is that the car is too expensive for most consumers and the savings from gas usage do not justify the high cost.

That's what happens when the government takes an ownership position in a private-sector business. If you think this is bad, just wait and see what happens if obamacare is ever implemented.

This is the second recall customer satisfaction action for the Volt.

The first non-recall was for reinforcements to the battery pack after test vehicles at NHTSA ignited days after crash tests. In both cases, GM was adamant that there is absolutely nothing wrong with the Volt; it is either the fault of owners with faulty wiring or right-wing media sources.

In a scary combination of corporate and government bullying, "GM has stepped up ad spending for the Volt on those TV networks that are accused of criticizing the car. The spending seems to be quieting the criticism."

As always, politics is trumping reason, logic, and facts.

The main subject for debate regarding the Chevy Volt and cars like it, is the taxpayer costs versus benefits, not how popular the car is or isn't. Let's summarize once again what the proposed goal of President Obama to have a million electric vehicles on the road within a few years does and what it costs. If Obama gets his way, each car gets a $10,000 tax credit. This goes to the wealthy buyers of the cars or to the dealers if the cars are sold to the government. Disregarding state credits, infrastructure costs and other subsidies for the industry we have a cost to taxpayers of $10 billion. Given the assumption that there will be about 250 million passenger vehicles on the US roads that account for less than 50% of the nation's oil consumption, we get a reduction in oil dependence of less than 0.2 percent. That's $10,000,000,000 for a 0.2 percent reduction in oil usage.

And that's ignoring the fact that electric cars are ridiculously impractical for anything but short trips (short being defined as a round trip of 50 miles or less), for two reasons. One, there are very few charging stations in this country, meaning that electric car drivers must charge them at home. Two, it takes a long time to fully charge an electric car.

The good news for Volt-heads is that Electric Highways are spreading like wildfire molasses.

First big piece of ‘Electric Highway’ gets juice

Electric car owners riding along Oregon’s Interstate 5 don’t have to worry about running out of juice on the open road.

The first major stretch of what’s been dubbed an “Electric Highway” on the West Coast from Canada to Mexico went operational Friday with the opening of a series of fast-charging stations along 160 miles of the interstate.

They are spaced about every 25 miles, so a Nissan Leaf with a range of about 70 miles can miss one station and still make it to the next. Electric car drivers will be able to recharge in about 20 minutes. The charge is free for now.

“I would say range-anxiety with these fast chargers will be nearly a non-issue for me,” said Justin Denley, who owns a Nissan Leaf. Inspired by the stations, his family is planning a trip from Medford to Portland, a distance of about 280 miles.

Last summer, he took the family on a 120-mile trip to the coast and had to include an overnight stop at an RV park to charge up.

Now, thanks to the benefits of the Electric Highway, Denley "expects the trip to Portland to take perhaps three hours longer than in a gas car."

Adding three hours to a 280 mile trip means a trip that would ordinarily take between 4 - 5 hours will now take around eight: almost a 50% increase.

The tradeoff, of course, is time for money. The trip will take longer but cost less - at least on an energy-per-mile basis. But when you factor the sticker price differential (a Nissan leaf sticker price is around $38K while a conventional Nissan Versa goes for around $11K), well, $27K buys a lot of gas, even at $4.00 per gallon.

Something to think about: Interstate 5 stretches 1,350 miles from British Columbia to Baja, Calif.

So it seems pretty clear that the electric car won't be replacing gasoline-powered ones at any time in the near future.

That is, assuming the government let's the free market do its job...