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I think parent is European, perhaps Dutch even (judging by his post history). Here in Europe I don't think fossil fuels are subsidised.

by wsc981 11y ago

Symbiote 11y ago
The UK certainly subsidizes fossil fuels. http://www.theguardian.com/environment/2015/nov/12/uk-breaks-pledge-to-become-only-g7-country-increase-fossil-fuel-subsidies http://www.theguardian.com/environment/2015/nov/12/uk-breaks... 'A spokesman for the Department of Energy and Climate Change said: “We are committed to meeting our decarbonisation targets – we’ve made record investments in renewables and are focusing on lower-carbon secure energy sources, such as nuclear and shale gas. However this will not happen overnight - oil and gas will continue to play a role so we can ensure hardworking families and businesses have access to secure, affordable energy.”'
- Lazare 11y ago
  Keep in mind that there's a lot of spin and misleading statements made in this area. The article repeats the words "tax break" over and over, but it never actually explains what this means. But if you Google the actual change being discussed: "Effective tax rates on production from older oil and gas fields will be reduced from 80pc to 75pc immediately, and backdated to january, while on newer fields it will be cut from 60pc to 50pc, Oil & Gas UK, the industry body said. The changes serve to entirely reverse the tax grab on the sector in the Chancellor's 2011 budget." Or to put it another way, the UK taxes newer oil fields as 50%, which is a horrible subsidy compared to how they taxed it two years before that, but no change from how they taxed it before that. And in general the UK has (even after the change) some of the highest taxes on petroleum production in Europe. Question: If the UK has above average tax rates, does that mean it has no subsidy at all? Or is there some "natural" tax rate and any deviation from that is a subsidy? Does it even make sense to call the way you set the amount of money you take from someone a "subsidy"?
  - ZeroGravitas 11y ago
    I always assumed this tax/subsidy was to account for the fact that the oil/gas belongs to the country. In that framing, giving away natural resources below market rates is a definite subsidy.
    - Lazare 11y ago
      > In that framing, giving away natural resources below market rates is a definite subsidy. So...what's the "market rate" for taxes on a new well in the UK's territorial waters in the North Sea? Given that the UK has a monopoly on allowing wells to be drilled in that area, isn't the market rate whatever the UK says it is, and thus there is always zero subsidy by definition? Or should we compare to what other countries charge for other wells in other areas? Should we adjust for, eg, the difficulty of drilling in the North Sea compared to, eg, off the coast of Brazil and if so, how? Should we only compare to EU countries, or only to rich countries, or do we compare to everyone? And if, as is the case, the UK has relatively high taxes compared to others, in what way would it be accurate to call it a subsidy?

I think parent is European, perhaps Dutch even (judging by his post history). Here in Europe I don't think fossil fuels are subsidised.

by wsc981 11y ago

I think parent is European, perhaps Dutch even (judging by his post history). Here in Europe I don't think fossil fuels are subsidised.

Symbiote 11y ago

The UK certainly subsidizes fossil fuels. http://www.theguardian.com/environment/2015/nov/12/uk-breaks-pledge-to-become-only-g7-country-increase-fossil-fuel-subsidies http://www.theguardian.com/environment/2015/nov/12/uk-breaks... 'A spokesman for the Department of Energy and Climate Change said: “We are committed to meeting our decarbonisation targets – we’ve made record investments in renewables and are focusing on lower-carbon secure energy sources, such as nuclear and shale gas. However this will not happen overnight - oil and gas will continue to play a role so we can ensure hardworking families and businesses have access to secure, affordable energy.”'

Lazare 11y ago
Keep in mind that there's a lot of spin and misleading statements made in this area. The article repeats the words "tax break" over and over, but it never actually explains what this means. But if you Google the actual change being discussed: "Effective tax rates on production from older oil and gas fields will be reduced from 80pc to 75pc immediately, and backdated to january, while on newer fields it will be cut from 60pc to 50pc, Oil & Gas UK, the industry body said. The changes serve to entirely reverse the tax grab on the sector in the Chancellor's 2011 budget." Or to put it another way, the UK taxes newer oil fields as 50%, which is a horrible subsidy compared to how they taxed it two years before that, but no change from how they taxed it before that. And in general the UK has (even after the change) some of the highest taxes on petroleum production in Europe. Question: If the UK has above average tax rates, does that mean it has no subsidy at all? Or is there some "natural" tax rate and any deviation from that is a subsidy? Does it even make sense to call the way you set the amount of money you take from someone a "subsidy"?
- ZeroGravitas 11y ago
  I always assumed this tax/subsidy was to account for the fact that the oil/gas belongs to the country. In that framing, giving away natural resources below market rates is a definite subsidy.
  - Lazare 11y ago
    > In that framing, giving away natural resources below market rates is a definite subsidy. So...what's the "market rate" for taxes on a new well in the UK's territorial waters in the North Sea? Given that the UK has a monopoly on allowing wells to be drilled in that area, isn't the market rate whatever the UK says it is, and thus there is always zero subsidy by definition? Or should we compare to what other countries charge for other wells in other areas? Should we adjust for, eg, the difficulty of drilling in the North Sea compared to, eg, off the coast of Brazil and if so, how? Should we only compare to EU countries, or only to rich countries, or do we compare to everyone? And if, as is the case, the UK has relatively high taxes compared to others, in what way would it be accurate to call it a subsidy?