Galt's Gulch
11

Oil price drop

Posted by j_IR1776wg 8 years, 3 months ago to Politics
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The headline on this article is "Drop in oil prices rocks producer states, triggers historic tax hike plan in Alaska"

How I wish that it had read "Drop in oil prices rocks producer states, triggers historic government slash in spending plan in Alaska"
SOURCE URL: http://www.foxnews.com/politics/2016/01/01/drop-in-oil-prices-rocks-producer-states-triggers-historic-tax-hike-plan-in-alaska.html?intcmp=hpbt3

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  • Posted by $ MikeMarotta 8 years, 3 months ago
    Yesterday, NPR had a Saudi oil guy saying that we will never again see oil at $100 a barrel. But back in 1995, a guru of Corporate Change Guru Tom Peters bullied America because we were never going to see oil at $35 a barrel again. Well, OK, $37.50 now... and given the inflated dollar compared to 1995, we are talking like $17.50 a barrel in those terms.

    We will see $100 a barrel, sooner than you think...
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    • Posted by $ blarman 8 years, 3 months ago
      Agreed. The oil barons of the Middle East are only waiting for the frackers to go bankrupt before they jack prices up again. Then the frackers will come back. And we get a vicious cycle.
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  • Posted by ProfChuck 8 years, 3 months ago
    Because politicians are only accountable at election time (which can easily be rigged) there is no incentive to actually accomplish anything productive. Politicians win by spending money, other peoples money, so they risk nothing except their place at the taxpayer teat. Never expect a politician to ever do anything productive. That way you will never be disappointed. If by some off chance they do actually perform a useful service you can be pleasantly surprised.
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  • Posted by $ SarahMontalbano 8 years, 3 months ago
    The Permanent Fund is basically a store of oil money created for future generations to have a backup plan. Each year every man, woman, and child who have been in Alaska gets a small amount of money from the interest generated on that fund; it varies from year to year, but last year it was around $2000 per person, if I remember correctly. They're going to dip into the Fund itself. Part of Gov. Walker's plan is to keep the Permanent Fund Dividend at a flat $1500, and then adjust it to natural fluctuations in the market. He also intends to institute an income tax (although with a sales tax tourists would also have to pitch in). His spending cuts are laughably small. And he's going to tax the oil industry more heavily. Ugh. It makes me sick.
    (Note: I'm trying to recall this off the top of my head, so if there are some inaccuracies I apologize. Fact check me!)
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    • Posted by j_IR1776wg 8 years, 3 months ago
      So the fund is monies extorted from the oil producing industries confiscated by the politicians to allow them to control the citizens of Alaska. Can't nothing go wrong with that scheme, can there?
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      • Posted by $ SarahMontalbano 8 years, 3 months ago
        That's all it is. I don't understand what kind of acts of evasion the politicians have to perpetrate in order to think that is a sound plan, but anyone can understand this: producers won't continue to produce if they are penalized for doing so.
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  • Posted by DrZarkov99 8 years, 3 months ago
    What's killing the oil producers now is the glut of supply they've had to sit on because they weren't allowed to sell on the international market. Now that the Nixon era ban on overseas sale of American oil has been lifted, the solid market for sweet American crude (the best grade of oil available) will help move the existing stockpile, generate revenue, and put the riggers back to work. The profits may not be as lucrative as when they were selling at $100/barrel, but there's still money to be made. The Saudis have shot themselves in the foot, now that they will have to really compete with U.S. oil production, and are burning through their cash reserves at a furious pace. And yes, we can expect gasoline prices will remain low. That's the Oklahoma perspective.
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  • Posted by starznbarz 8 years, 3 months ago
    There is a reason Saudi has refused to cut production levels, even as the cartel are leasing tankers for storage and their member states are screaming, It is our "friends" the Saudis way of driving the big dog of production (us) to ground, then, they can return to business as usual - screwing America. Research the U.S. domestic active well sites over the last 90 days, the Saudi tactic is working. What Ive read, is pump prices need to be around $2.25 for U.S. companies to be profitable.
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    • Posted by $ WilliamShipley 8 years, 3 months ago
      So we get lower energy costs for a while and a number of U.S. producers close down. When they try to raise their prices we can start producing again. Less money for them, more for U.S. consumers.

      Kind of rough on the energy investments in the U.S. drilling but capitalism involves risk and the risk of lower prices was certainly one that could be seen. I suspect that there will now be efforts made to have the government bail out the energy sector so they don't lose profits.
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      • Posted by starznbarz 8 years, 3 months ago
        I don`t think you can just screw a cap on the well and come back later, with equipment maintenance, land lease costs and other incidentals, startup is probably a long process. As far as Obama and his ilk bailing out energy companies... really? My guess he would be doing the Snoopy dance over each closure.
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    • Posted by wiggys 8 years, 3 months ago
      they can pump till the cows come home. what do they do with it if the world market is not buying? We the usa is the largest market in the world for every commodity and we are not buying much these days. I suspect they have already shut down some pumps.
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      • Posted by $ MichaelAarethun 8 years, 3 months ago
        There is I believe a ban on exportiing oil from the USA. We are buying enough for WalMart and the Chinese to build a number of fast super container ships which is a good thing because we can't afford to buy much in the high price stores. Those are for the party leaders. The arrangement of overseas production would be better if we had something to fill the back haul. They also are able to sell to other countries by changing the labels more volume discount pricing. Perhaps we could have them ship our surplus grain stocks wheat, corn, rice. on back haul? I really wonder if UPS or Wally World owns the most 18 wheelers?

        Speaking of corn and wheat with Ethanol shut down that saves the government subsidy and the gallon of petro it takes to produce a gallon of ethanol maybe we should be shipping that grain to China. They have plenty of shipping space going that way.
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  • Posted by wiggys 8 years, 3 months ago
    when people stop buying your product you lower your price. when people do not have an income they only buy what ever necessities they can afford. we may see oil at $10.50 a barrel before the end of 2016. As the price drops social unrest will escalate. people will want your food once the government stops issuing food stamps. But of course they will keep the printing presses going and they will keep increasing the national debt. Think what you want but as Leonard Peikoff says in The DIM Hypothesis we have 40 years or so till the collapse, I offered to him my thought 20 years and he said possibly because he did not think things would go bad so fast. untie from the dock with a sail boat don't need gas
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    • Posted by $ MichaelAarethun 8 years, 3 months ago
      All those closed down wells have a price tag that keeps going up. It's the amount of money a barrel of oil must bring to make it worth while operating them.
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  • Posted by $ MichaelAarethun 8 years, 3 months ago
    Added to the SW Texas fields it seems to good to be true and fuel prices at the pump generally follow about 90 days later. So why am I such a Cynical rainmaker on your parade? I remember the first major price hike and the alternate day rationing only too well. Engineered to create on e change. You can't tax 50 or 70 cents a gallon on 40 cent a gallon pump price fuel. So what's to prevent the government from saying "Wind fall profits' and raising the federal tax per gallon or the 50 states? To a politician this is a new cash cow that wants their attention at the milking. Not to settle the debt - to create new spending and by the way to pay the now coming due interest on the last go round of massive borrowing. I'm betting by edict after the election and before inauguration with no extra charge finger pointing a the other half of the Government Party.
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  • Posted by freedomforall 8 years, 3 months ago
    The individual taxpayers should revolt and refuse to pay, but they are spoiled rotten, living off their natural resources developed by productive people and companies. How much of the population of Alaska will move away ?
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    • Posted by j_IR1776wg 8 years, 3 months ago
      Very few ffa. Socialism breeds dependency and sloth. No presidential candidate has pledged to eliminate Obama's trillion dollar deficits.We are really down to flight or fight and there's no where to run to.
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      • Posted by freedomforall 8 years, 3 months ago
        You may be right, j. They have had a free ride, but that is waning with the loss of oil revenues. Unless oil revenues return, some may leave for literally greener pastures. The climate of Alaska is much less forgiving than other states.
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