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View Full Version : The Liars Point Their Dirty Fingers Again



Master Oil Racing Team
05-13-2011, 07:29 AM
It's a familiar scene. The Democrats and many Republicans summon top oil executives to televised PR events to score political points and threaten the oil industry. The televised part is for their reelection campaign to make their constituents think they are going to do something about high gasoline prices. The unseen part is the bribery and extortion part where lobbyists will go behind the scenes and hand out "Protection Money" to both parties to help limit the damage. This time however, the oil executives are not just rolling over. They have spoken up more forcefully than in a long time. When the politicians started talking about ending the subsidies to oil company's.....billions of dollars worth, I was scratching my head wondering "what subsidies?" This is the truth behind the lies of those self serving [I]"bast#*%os"[I]

Oil companies do not receive what is generally termed "Subsidiaries". Farmers get actual cash payments (taxpayer extracted money) to hold land out of production. I know a landowner who did not farm that was called up by his friend at the Agricultural Extension Office in Alice and told to come down and pick up his $9,000.00. That was in 1991. I don't know how much he has gotten since then. The milk industry has had subsides going on for decades in which the government buys excess production to keep prices up for the dairy farmers, then gives out milk, cheese, and other dairy products free to the so called poor. Your tax dollars go directly to automobile manufacturers for R&D on electric car and battery research. There are also many government employees working directly for private companies in R&D both in the auto and other green industries. Ranchers get cash to set aside land for environmental projects.

Universities and liberal professors get tax dollars to promote, teach and implement liberal, socialist and communist agendas. Unions are one of the few groups to profit from the downturn, getting billions of taxpayer money on the auto bailout while the bondholders were illegally shunted aside. The favored business and organizations get plenty of cash. Take GE for example whose CEO is head of Obama's economic board. Not only did GE have 15 billion in profits last year, but they paid zero taxes. A lot of that money was direct taxpayer cash for their investments in green energy. That includes taxpayers paying for "green air conditioners" sent all over the third world countries. It also includeds bailout cash when GE, because of its White House influence, was allowed to file some paperwork which in turn made GE Credit Corporation be deemed a "bank" and thus entitled to money. Those are real subsidies, and I am opposed to any corporation getting that. In fact, I think the idea of the Commerce Department is long outdated. That goes back to the founding of our country before America was even setteld. There were no airplanes, no interstate, no railroads, no automobiles, no radio or TV or sattlelites, E mail, internet, etc. The Commerce Department was one of the first established in order to promote trade between the states and abroad. We no longer need that and haven't for a long time. The Commerce Department is now used as a tool to restrict every kind of activity the liberals don't like and to provide taxpayer funded marketing around the world. Let the international companies pay their own way.

So what the politicians are calling subsidies to the oil companies are actually tax breaks. There is a difference. Lots of other companies across the spectrum from manufacturing to mining to service get tax breaks of one sort or another. That's what the lobbyists spend their protection money on. It is not direct or indirect cash payments that come from the 50 percent of Americans who DO pay taxes. The United States is near if not at the top of the list of the highest tax rates on corporations of all the industrialzed country's. The tax breaks are to encourage an activity that is necessary for our vital interests, or helps keep our economy humming along.

One of the so-called subsidies that has been in the news lately involves the Baaken Shale and other horizontal drilling projects that also involve fracing. If you believed the news media, including Fox News, you would think this was a new method. It's not. The first frac job I was on was in 1972, but our company, Alice Specialty, had frac tanks going back to 1965. What has changed over time is the lenght of the extended reach on horizontal drilling and the multistage frac treatments which have evolved and continue over the years. The so called subsidies to drill such wells is actually tax breaks or credits to make it economical to drill and develope such fields. One of our customers recently drilled a well not considered deep, but with all involved, it cost 8 million dollars. Horizontal drilling and fracing all came out of South Texas which has some of the world's most inhospitable drilling conditions downhole. The horizontal drilling and fracing techniques were first developed in drilling through "tight" sands. These are traps in which oil and or gas are located, but so tight they would not release the hydrocarbons in commercial quantities. Some of the sands are also only a few feet thick. By drilling horizontally through the sands, much more was exposed for production purposes, and then by pumping "frac sand" through perforations in the casing under extremely high rates and pressures, the tight formations are fractured and a porous drainfield of sand is left to keep the formations propped open so that the oil or gas can flow into the pipe for transport to the surface. The term "proppant" is also used for frac sand, although more for the heavier density manufactured sand rather than the naturally occurring round sand that comes from Ottawa and surrounding areas.

Our company was on the pioneer well that first started the horizontal drilling boom in 1988. We were also on many multistage fracs, but these were all done in oil or gas bearing sands, not shale. There have been so many developments since those days, that Oil and Gas exploration companies thought that maybe the time had come where oil and gas could be extracted from shales profitably. That's where the tax incentives came from, and now there are areas in the Dakota's, Pennsylvania and Virginia that are booming because of all the oilfield related activities. The rewards way outnumber the tax breaks, which are miniscule compared to what other companies get. And unlike ethanol production, the oil companies don't have to have monthy cash payments to keep the oil and gas in production. Us taxpayers have to pay out every month the shortfall it takes in producing ethanol so it can be added to gasoline without jacking up prices to cover the true cost.

The one thing that is confusing to just about everybody though is the oil depletion allowance. I'm not even sure of how this is handled now because I haven't looked into it for a long time, but basically the incentive is also a tax break based on the situation that as soon as the first barrel of oil is produced, the company is selling itself out of business. If they never drilled another well, then when the last barrel was produced and sold, the company would have nothing else to sell. This is unlike other businesses in America with such an enormous capital investments, and a huge risk/reward component.

When a company like General Motors, or GE or Coca Cola, or Walmart, Barnes & Noble and others decide to go in business they put together a plan, designs and then build their factories, warehouses, shipping facilities, retail outlets etc. It may take years or months depending on numerous factors and the type of business. When all this is in place, done and the business is going, there is an ongoing process of goods and or services coming in and going out the doors. As long as the business thrives and makes the right marketing decisions, they can go on indefinitely. In doing business, the capital investments are allowed to be written off over a period of years. The smaller investments such as computers, vehicles, light equipment are generally depreciated, or written off over a short term of five to eight years. The land, buildings and large manufacturing equipment are depreciated over thirty years. These are all standard business practices allowed and taken by almost all business in America. It is a basic tax principal in which the large capital expenditures are allowed to reduce taxes owed over a long period of time. With oil exploration and production companies though, that is not the case. Now bear in mind, I am not talking about refineries, gas stations, office buildings or anything like that. This refers strictly to the oil and gas producing properties where the business of the exploration and production companies orginate and is the single largest source of expenditure by far.

Few companies that drill for oil and gas have refineries or gas stations. That is left up to the few large ones. The vast majority are in it just to find oil and gas, then get it to the surface and sell it. They do NOT own the land. They do NOT own the minerals. Nearly every one has to hire out all the services they need and buy what they need for exploration and production from other companies. It is an extremely rare occurrence that an E&P company owns a drilling or workover rig or any other capital item that they would write off. If they go out of business, they have some production facilities on the surface they could sell, and a little pipe in the ground that could be blasted and pulled, but they are also liable for plugging and abandoning the well, and at that time, it is rare to have enough equipment at the surface to pay anywhere near the cost of that, so they have to maintain bonds and money set aside for P&A operations. Since the oil companies have to pay royalties to the landowner, and build roads and waterwells which they deed to the landowner, they have nothing to hold on their books for depreciation except some field vehicles and incidental personal property. It is a huge investment to find, lease land and drill for oil without even knowing whether you will find any. It would be like Ron pouring steel in his prop molds not knowing whether or not there would be a rough cast prop inside when he opened it. Not only that, but maybe it might be 60 or 70 percent he opened with not only no prop, but no metal to be salvaged for scrap or remelted.

That is where the oil depletion allowance comes in. It gives a tax break to a certain percentage of the production to offset drilling costs in order to encourage future drilling, just as the depreciation costs of building a factory to be amortized over thirty years will encourage the plant to be built.

In can be confusing and hard to explain, but that's how come the liars in congress can get away with it. Most of the news media is to stupid to understand. They never seem to find the right people to talk with and continue to go back to the same people everytime for their "facts". Kind of long, but I wanted to let you guys know that it isn't the oil companies responsible for the high gas prices, it's the District of Corruption in Washington. Obama dithering in the middle east has fueled the speculators, but keep in mind our Treasury Secretary and the Fed have led to a very weak dollar which causes the price to go up. And congress won't let us drill in Anwar while production on the North Slope is falling off. Obama defies the law and will not let deepwater drilling in the Gulf resume while he gives 2 billion loan to Petrobras for deepwater drilling, plus gives them a permit to put a million barrel floating oil platform in the gulf. No....it's not the oil companies to blame......it's those liars who keep spending all our money. Be assured that if they got every dime from the oil companies who testified yesterday, they would not pay down the debt, they would go on another spending spree.

ferv888ipba
05-13-2011, 03:08 PM
Wayne,
This administration is giving a whole new meaning to a SH*(&*(^T sandwich when it comes to FRACKING business. When you have 6% of your administration having had previous business experience, this is what you get. Look at the loony tune characters like Van Jones that they have put on. They claimed that they did not know about Jones and his communistic leanings when he came under scruitiny. HMMM, Goes against the YOUTUBE video of Valire Jarrett, saying that the administration had identified him as an up and coming star and wanted him in the administration. LIARS. Go to YOUTUBE and tag in the CNBC interview of the Caterpillar CEO from this week. Really eyeopening. He said THE ONE has improved his openess to listening, but still gets an "F" for a grade.

Look up the BOEING story if you want to know where this is headed. The NLRB ruling on Boeing is going to be a dangerous move if left to stand. Companies like Boeing will just move their production offshore rather than move to another state. Look at the regs that are put on these companies and then think through why they move business off shore. The Govt is forcing alot of this.

Thanks for your efforts Wayne,
Ray

Tim Chance
05-13-2011, 04:01 PM
Wayne: Well stated!!!

Original Looper 1
05-13-2011, 08:06 PM
Hey Wayne & company,

All of the criminals in Washington, DC keep talking about free trade and global economics. Well guess what? China, for all practical purposes, can produce and educate anything the United States can for 10 cents on the dollar. What in the hell could we ever teach our young people in colleges to overcome such a insurmountable disadvantage? Even if they were all doctors, we could never dig out of this economic abyss. The Illuminati through their insatiable greed created the Economic monster China, now they are frantically behind the scenes making all sorts of secret economic deals with currencies & drawing right privileges with the Federal Reserve. They are even at the point of trying to contain China with oil by force of our military. Can you say PNAC?

As a country, the United States is now consuming 50% more production than we make from other countries with primarily borrowed money. No wonder the dollar is in the hole, and if you do the math, it is only going to get worse. Can all of you imagine if we as a country took back it's currency from the private global banksters and we then as a group of citizens, independently and collectively, produced 50% more than we consumed as a country? We'd be the richest and the most independent nation the world has ever known and our dollar would be the king of currencies.

To show everyone what happens when you have an economy based on too parasitical elements, ie everybody is either on welfare or works for the government, look at Detroit as an example. Watch the reality show "Parking Wars." The only major economy and movement of money is when the government employees ticket the welfare recipients for illegal parking. It's comical. If we don't change our ways soon as a nation, I am afraid we will become a nation of "Parking Wars," ticket writers and red light cameras.

Regards,

Paul

Powerabout
05-14-2011, 12:50 AM
Its buying over a billion dollars of foreign oil every day from your enemys that is creating and preventing the fixing of your fiscal problems and hence also creating a base price for oil.

Now just imagine where you would be if Saddam had gotten his 'oil priced in Euros' project going
Now you know another reason the USD is low as its the currency of oil trades

Master Oil Racing Team
05-14-2011, 06:51 AM
That's right. And many people seem to forget that China is communist. And now Russia is reemerging and has connected Europe via pipeline to it's own oil and gas supplies. Ronald Reagan helped stop that scheme once before. Now the Bear has Europe in it's grasp. It was Reagan that broke the back of the Soviet Union by selling so many dollars that it became very weak and at the same time had our "friends" in the middle east add excess production to bring the price of oil down to ten dollars a barrel. That double whammy of low prices coupled with a devalued dollar wiped out the Russian bank. Eighty percent of their western currency came from oil sales at that time. I imagine they took that lesson to heart.

Unfortunately we have a president that has a different view that most Americans and he is doing his best to "fundamentally" change our way of life. Growing up I always took it for granted that the U.S. was the mightiest nation ever created and the dollar was the world's currency. Having done research since Obama started dismantling capitalist institutions I learned that for the longest time, up to the end of World War II that the British Sterling was the world's currency. The way it's looking with China drilling just off our shores and buying up what oil reserves there are that Russia is not claiming, and owning 97 percent of the world's resesrves of rare earth, the Yen may become the world's currency.

Mark75H
05-14-2011, 07:01 AM
Some other currency will have to take over when the dollar can not back up over due bonds.

Separately ... if "Quantitative Easement" works ... why are we paying taxes at all? Why not just print more money and pay off all the government's debt without bothering us?

shenders
05-14-2011, 12:33 PM
Politicians are the only people in the world who create problems and
then campaign against them.

Have you ever wondered, if both the Democrats and the Republicans are
against deficits, WHY do we have deficits?

Have you ever wondered, if all the politicians are against inflation
and high taxes, WHY do we have inflation and high taxes?

You and I don't propose a federal budget. The President does.
You and I don't have the Constitutional authority to vote on
appropriations. The House of Representatives does.

You and I don't write the tax code, Congress does.

You and I don't set fiscal policy, Congress does.

You and I don't control monetary policy, the Federal Reserve Bank does.

One hundred senators, 435 congressmen, one President, and nine Supreme
Court justices equates to 545 human beings out of the 300 million are
directly, legally, morally, and individually responsible for the
domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that
problem was created by the Congress. In 1913, Congress delegated its
Constitutional duty to provide a sound currency to a federally
chartered, but private, central bank.

I excluded all the special interests and lobbyists for a sound reason.
They have no legal authority. They have no ability to coerce a senator,
a congressman, or a President to do one cotton-picking thing. I don't
care if they offer a politician $1 million dollars in cash. The
politician has the power to accept or reject it. No matter what the
lobbyist promises, it is the legislator's responsibility to determine
how he votes.

Those 545 human beings spend much of their energy convincing you that
what they did is not their fault. They cooperate in this common con
regardless of party.

What separates a politician from a normal human being is an excessive
amount of gall. No normal human being would have the gall of a Speaker,
who stood up and criticized the President for creating deficits. The
President can only propose a budget. He cannot force the Congress to
accept it.

The Constitution, which is the supreme law of the land, gives sole
responsibility to the House of Representatives for originating and
approving appropriations and taxes. Who is the speaker of the House?
John Boehner. He is the leader of the majority party. He and fellow
House members, not the President, can approve any budget they want. If
the President vetoes it, they can pass it over his veto if they agree
to.
It seems inconceivable to me that a nation of 300 million cannot
replace 545 people who stand convicted -- by present facts -- of
incompetence and irresponsibility. I can't think of a single domestic
problem that is not traceable directly to those 545 people. When you
fully grasp the plain truth that 545 people exercise the power of the
federal government, then it must follow that what exists is what they
want to exist.

If the tax code is unfair, it's because they want it unfair.

If the budget is in the red, it's because they want it in the red.

If the Army & Marines are in Iraq and Afghanistan it's because they
want them in Iraq and Afghanistan ....

If they do not receive social security but are on an elite retirement
plan not available to the people, it's because they want it that way.

There are no insoluble government problems.

Do not let these 545 people shift the blame to bureaucrats, whom they
hire and whose jobs they can abolish; to lobbyists, whose gifts and
advice they can reject; to regulators, to whom they give the power to
regulate and from whom they can take this power. Above all, do not let
them con you into the belief that there exists disembodied mystical
forces like "the economy," "inflation," or "politics" that prevent them
from doing what they take an oath to do.

Mark40H
05-14-2011, 04:12 PM
Very well said. I think we need to get rid of all the *** holes and start over.If I run my personal affairs the way they run congress I would be in jail. All they think about is getting re-elected.

Powerabout
05-14-2011, 04:42 PM
Some other currency will have to take over when the dollar can not back up over due bonds.


except that would be the end of the US as we know it
Where are you going to get the billion+ dollars a day to buy oil?