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I live in Utah and I can tell you exactly what happens when oil is no longer in demand. They offer numerous tax breaks per well to encourage exploration and inc

I live in Utah and I can tell you exactly what happens when oil is no longer in demand. They offer numerous tax breaks per well to encourage exploration and increase production. I believe the term is "corporate welfare". One of the tax breaks has a stated goal of providing tax relief when oil prices are low. https://oilgas.ogm.utah.gov/pub/Publications/Lists/tax_incentives_IOGCC.pdf https://oilgas.ogm.utah.gov/pub/Publications/Lists/tax_incen... This is the same government attempting to roll back solar tax credits because they insist that the solar industry needs to stand on it's own 2 feet and compete in the "free" market.

edblarney 10y ago
'Tax breaks' are offered to all sorts of industries. Almost all entertainment in Canada for example, is done nearly tax free. Pharma, energy, small business etc. etc..
- graeme 10y ago
  It's particularly perverse, however, to give tax breaks for an industry that has immense negative externalities.
  - edblarney 10y ago
    Oil companies don't emit a whole lot of CO2. You emit the CO2 when you use your car (almost 50% of CO2 emissions are from autos). And a bunch of other industries are responsible for most of the rest of CO2 emissions.
    - monknomo 10y ago
      I think you're missing the negative externalities inherent in oil extraction, like groundwater pollution, earthquakes, above ground pipelines, etc. Not to mention it's a little like saying Pablo Escobar doesn't OD on drugs or steal your TV very often, it's the crackheads that do that...
      - edblarney 10y ago
        " like groundwater pollution, earthquakes, above ground pipelines, etc" Groundwater pollution and earthquakes are rare, and the latter are minor and have negligible impact. It's no more problematic than most other extraction industries. 'Above ground pipelines' are completely benign entities with almost zero environmental impact. Leaks are rare enough, and most of them are very minor and easy to clean up. Oil is an organic product, found commonly in nature, and small amounts of Oil spilled have no real impact. Unlike the big tanker spills, which can be devastating. The highway you drive your car on has considerably more environmental footprint than any 'above ground pipeline'.
        nostrademons 10y ago
        Would you want one in your back yard?
        pixl97 10y ago
        My friend lived in house with an oil well in the back yard. Really wasn't noticeable after you got used to the noise it made. After a week I forgot it was there.
        Symbiote 10y ago
        Doesn't it stink? I remember very clearly the first time I visited western Texas (from Europe) as a child. The smell was sickening.
        ArkyBeagle 10y ago
        Generally it is refineries that stink.
        edblarney 10y ago
        I wouldn't want a coffee shop 'in my backyard' and I have nothing against coffee shops. But if I had to chose between an Oil Pipeline and a 'highway' - I (and I think most people) would chose the Oil Pipeline any day of the week. You do realize they are quite common? And that natural gas pipelines - which carry the same carbon-based materials run everywhere in urban areas - and that there's a good chance there is a gas pipeline, literally, in your backyard right now? If you are living in an urban area, my guess is there is an 80% chance there's a carbon-based pipeline within 500m from where you are.
    - deleted 10y ago
      [deleted]
    - thatcat 10y ago
      Even if they don't use much, they tend to spill a lot which is worse than burning it.
      - edblarney 10y ago
        "they tend to spill a lot which is worse than burning it." Both parts are not correct. First, they spill very little in the grand scheme of things. Second, an 'oil spill' unless it's quite large, is not a hugely damaging thing for the environment. Oil is a plentiful, organic material, found everywhere in nature. It's just not concentrated enough in most places to be extracted. The soil in northern Alberta (an area the size of Florida) is literally oozing with hydrocarbons - same for Venezuela and many other places. Nobody considers those parts of the world 'toxic' - they are otherwise normal places.
        deleted 10y ago
        [deleted]
        codecamper 10y ago
        What sort of technologist thinks like you? Are you sys admin?
        thatcat 10y ago
        I guess it's arguable whether it's worse or not, but CO2 doesn't typically kill any wildlife whereas oil spills do. There is a certain percentage that is leaked from every pipeline in addition to the large leaks that occur during tanker and drilling accidents. Even a small percentage of the large volume they extract is a large volume to pour on the ground. I'm not sure why you think the concentrations of oil in the soil occurring naturally approach even the smallest pipeline leak; would love to see some sources though if you have them.
      - cr1895 10y ago
        Crudely (haha) crunching some numbers, if we consider the oil spilled in the US in 2011 (incl. Deepwater Horizon) of 4.95e6 bbl compared to the total oil consumption in 2015 of 7.09e9 bbl, the oil spilled is less than 0.07% of the oil consumed. This, mind you, is considering a massive outlier year for spilled oil. In a more typical year it's an order of magnitude less. Not to minimize the damage from spilled oil or suggest that it's no problem, but let's keep "spill a lot" in perspective.
    - sandworm101 10y ago
      >> Oil companies don't emit a whole lot of CO2. The Saudis certainly don't. That oil is easy to tap and, under some circumstances, be used with little refinement (shipping). But Canadian oil, shale oil, requires massive energy to extract.
      - wiredfool 10y ago
        Not to mention flaring of natural gas in the Bakken fields. It's a significant percentage of the US's total greenhouse emissions.
    - FullMtlAlcoholc 10y ago
      Fracking requires an immense amount of water.
      - ArkyBeagle 10y ago
        It requires "barrels-per-minute for hours" amounts of water. 100 BPM is unusually high for fracking. One acre-foot is about 7753 barrels. The problem is that water is increasingly scarce in many parts where fracking is done for reasons outlined in the book "Cadillac Desert".
    - Ma8ee 10y ago
      When you subsidise extraction the price goes down and other industries burn more of it.
    - Reason077 10y ago
      Oil companies don't emit a whole lot of CO2. Not true. Refining crude oil into gasoline or diesel is itself very energy-intensive. It takes around 4.5kWh to refine each gallon of gasoline from crude. In many cases that energy is supplied by fossil-fuel burning power plants. Volts for oil: https://m.youtube.com/watch?v=BQpX-9OyEr4 https://m.youtube.com/watch?v=BQpX-9OyEr4
      - edblarney 10y ago
        You proved my point. 4.5 kWh is not a lot of energy. It's the amount of energy needed to light a 1K lightbulb for 4 hours. It's a pittance compared to what you burn in you car. 4.5Kw/h won't get you around the block :)
        zrail 10y ago
        A 1kW lightbulb is rather bright and not used in homes, more so in studios. A better comparison might be 10 100W bulbs or maybe an average chandelier.
        Reason077 10y ago
        Even 100W bulbs are pretty rare now days (illegal in the EU), replaced with LED versions that consume far less energy. 4.5 kWh is really a tremendous amount of energy just to refine a single gallon of gasoline. And it's energy that's completely lost, just converting hydrocarbons from one form into another. By putting that energy directly into electric vehicles instead, you'd be able to power around half of all the vehicles on the road!
        phlo 10y ago
        I think you may be mistaken about amounts of energy. Typical modern domestic-use light bulb (ccfl) are rated around 20 watts. 100 W was the typical maximum in incandescent light bulbs for domestic use, excluding some very bright halogen bulbs at around 200 W. 1000 W bulbs are mainly used in studio applications (as someone else mentioned) and for stage lighting. On the subject of getting around the block: A kilogram of gasoline contains some 46 MJ of energy. Gasoline is a bit lighter than water, so one kilo is around 1.3 liters. 46 MJ is equal to, roughly, 13 KWh, so 4.5 KWh are around 300 grams, or around 400 ml. A Manhattan city block is around 80x280 Meters, for a circumference of roughly 720 Meters. An inefficient modern car might use 8 Liters per 100 Kilometers, so 400 ml (or roughly 4.5 KWh) will move an inefficient modern car by around 5 Kilometers. In other words, it'll get you around the block. Not once, not twice, but slightly less than 7 times.
  - enraged_camel 10y ago
    At the expense of cleaner, safer ones no less.
- erikpukinskis 10y ago
  And many of those are bad. Ask people in the visual effects industry how they feel about Canada's tax breaks for film production. These tax breaks incentivize wasting money on travel and uprooting families to trot around the globe chasing favorable tax laws. It's one thing to set a low tax rate, it's another thing to create the tax equivalent of a "loss leader" as marketing for a broader economy. I'm not saying it's immoral, but it causes chaos in the pricing signals and should be done carefully.
- ramy_d 10y ago
  > Almost all entertainment in Canada for example, is done nearly tax free. Categorically untrue.
- josho 10y ago
  The entertainment industry in Canada receives tax incentives to encourage sustaining and sharing Canadian heritage & values, which would otherwise be lost due to the media juggernaut to the south. It is not always successful, but that is the intent. What is the motivation to give a highly profitable industry tax incentives?
woofyman 10y ago
Carrier is the latest recipient of a tax break. http://www.zerohedge.com/news/2016-11-30/carrier-issues-statement-trump-deal-incentives-offered-were-important-consideration http://www.zerohedge.com/news/2016-11-30/carrier-issues-stat...
JulianMorrison 10y ago
That only goes so far. If people literally don't want the oil, at some point those tax breaks are going to look vulnerable.
btilly 10y ago
I agree that this is a stupid policy, but there is some attempt at logic behind it. Oil production has the problem that increasing in oil production requires spending money that will only pay off if the price of oil remains high for several years. Cheap producers like Saudi Arabia know this, and so try to make the price fluctuate with enough lows to wipe out expensive oil producers, and enough highs to get rich themselves. More marginal properties would make money, but it is hard to survive the lows. Therefore government policy that produces an effective price floor encourages the production of otherwise marginal oil. This is effectively a bet that increased tax revenue from future production is worth the risk of that tax guarantee. And in the short run you get an increase in jobs for no actual outlay of resources. Which is a trick any politician can appreciate. That said, it remains a bad policy. Once implemented, lobbying efforts are virtually guaranteed to expand government support until the public is guaranteed to lose money. Doubly so because oil producers can now play one government off against another in a race to see who can offer more. (Sports teams have mastered that particular game...)
- EGreg 10y ago
  And if they didn't, we might have built a sustainable society faster and invested in sustainable energy sooner. It could have been done in the 80s. I know it's scary to imagine Americans driving on smaller cars and bicycles and public transport like Europeans... but we would survive it :)
  - alivelore 10y ago
    Average commute time in the us is lower than almost all of europe (https://goo.gl/r8DJqz https://goo.gl/r8DJqz) and public transport not only needs billions in investment to be built but there are very few places where it doesn't run on subsidies. So yeah you're asking americans to a) take longer to get to work b) constantly subsidise a system that will keep on losing money. Based on the political makeup of the country i'd say you can keep on dreamin' :)
    - EGreg 10y ago
      I live in NYC where it is reality :-P
tomcam 10y ago
Solar tax credits are also corporate welfare.
- crdoconnor 10y ago
  No, it's a reflection of the lower externalities inflicted by solar.
baldfat 10y ago
Pennsylvania has tax free fracking because it provides high paying jobs. We are the only state that provides tax free fracking and it blows my mind. Texas and other strong Republican states take taxes from oil production but in PA nothing. The "Pro-Fracking" groups says that PA had 250,000 jobs but it ended up including This number captured everyone in those industries including every road construction worker, trucker, engineer, and steel worker in Pennsylvania. The number is actually around 20,000 and the state makes no tax money from the production and only from income tax.

edblarney 10y ago

'Tax breaks' are offered to all sorts of industries. Almost all entertainment in Canada for example, is done nearly tax free. Pharma, energy, small business etc. etc..

graeme 10y ago
It's particularly perverse, however, to give tax breaks for an industry that has immense negative externalities.
- edblarney 10y ago
  Oil companies don't emit a whole lot of CO2. You emit the CO2 when you use your car (almost 50% of CO2 emissions are from autos). And a bunch of other industries are responsible for most of the rest of CO2 emissions.
  - monknomo 10y ago
    I think you're missing the negative externalities inherent in oil extraction, like groundwater pollution, earthquakes, above ground pipelines, etc. Not to mention it's a little like saying Pablo Escobar doesn't OD on drugs or steal your TV very often, it's the crackheads that do that...
    - edblarney 10y ago
      " like groundwater pollution, earthquakes, above ground pipelines, etc" Groundwater pollution and earthquakes are rare, and the latter are minor and have negligible impact. It's no more problematic than most other extraction industries. 'Above ground pipelines' are completely benign entities with almost zero environmental impact. Leaks are rare enough, and most of them are very minor and easy to clean up. Oil is an organic product, found commonly in nature, and small amounts of Oil spilled have no real impact. Unlike the big tanker spills, which can be devastating. The highway you drive your car on has considerably more environmental footprint than any 'above ground pipeline'.
      - nostrademons 10y ago
        Would you want one in your back yard?
        pixl97 10y ago
        My friend lived in house with an oil well in the back yard. Really wasn't noticeable after you got used to the noise it made. After a week I forgot it was there.
        Symbiote 10y ago
        Doesn't it stink? I remember very clearly the first time I visited western Texas (from Europe) as a child. The smell was sickening.
        ArkyBeagle 10y ago
        Generally it is refineries that stink.
      - edblarney 10y ago
        I wouldn't want a coffee shop 'in my backyard' and I have nothing against coffee shops. But if I had to chose between an Oil Pipeline and a 'highway' - I (and I think most people) would chose the Oil Pipeline any day of the week. You do realize they are quite common? And that natural gas pipelines - which carry the same carbon-based materials run everywhere in urban areas - and that there's a good chance there is a gas pipeline, literally, in your backyard right now? If you are living in an urban area, my guess is there is an 80% chance there's a carbon-based pipeline within 500m from where you are.
  - deleted 10y ago
    [deleted]
  - thatcat 10y ago
    Even if they don't use much, they tend to spill a lot which is worse than burning it.
    - edblarney 10y ago
      "they tend to spill a lot which is worse than burning it." Both parts are not correct. First, they spill very little in the grand scheme of things. Second, an 'oil spill' unless it's quite large, is not a hugely damaging thing for the environment. Oil is a plentiful, organic material, found everywhere in nature. It's just not concentrated enough in most places to be extracted. The soil in northern Alberta (an area the size of Florida) is literally oozing with hydrocarbons - same for Venezuela and many other places. Nobody considers those parts of the world 'toxic' - they are otherwise normal places.
      - deleted 10y ago
        [deleted]
      - codecamper 10y ago
        What sort of technologist thinks like you? Are you sys admin?
      - thatcat 10y ago
        I guess it's arguable whether it's worse or not, but CO2 doesn't typically kill any wildlife whereas oil spills do. There is a certain percentage that is leaked from every pipeline in addition to the large leaks that occur during tanker and drilling accidents. Even a small percentage of the large volume they extract is a large volume to pour on the ground. I'm not sure why you think the concentrations of oil in the soil occurring naturally approach even the smallest pipeline leak; would love to see some sources though if you have them.
    - cr1895 10y ago
      Crudely (haha) crunching some numbers, if we consider the oil spilled in the US in 2011 (incl. Deepwater Horizon) of 4.95e6 bbl compared to the total oil consumption in 2015 of 7.09e9 bbl, the oil spilled is less than 0.07% of the oil consumed. This, mind you, is considering a massive outlier year for spilled oil. In a more typical year it's an order of magnitude less. Not to minimize the damage from spilled oil or suggest that it's no problem, but let's keep "spill a lot" in perspective.
  - sandworm101 10y ago
    >> Oil companies don't emit a whole lot of CO2. The Saudis certainly don't. That oil is easy to tap and, under some circumstances, be used with little refinement (shipping). But Canadian oil, shale oil, requires massive energy to extract.
    - wiredfool 10y ago
      Not to mention flaring of natural gas in the Bakken fields. It's a significant percentage of the US's total greenhouse emissions.
  - FullMtlAlcoholc 10y ago
    Fracking requires an immense amount of water.
    - ArkyBeagle 10y ago
      It requires "barrels-per-minute for hours" amounts of water. 100 BPM is unusually high for fracking. One acre-foot is about 7753 barrels. The problem is that water is increasingly scarce in many parts where fracking is done for reasons outlined in the book "Cadillac Desert".
  - Ma8ee 10y ago
    When you subsidise extraction the price goes down and other industries burn more of it.
  - Reason077 10y ago
    Oil companies don't emit a whole lot of CO2. Not true. Refining crude oil into gasoline or diesel is itself very energy-intensive. It takes around 4.5kWh to refine each gallon of gasoline from crude. In many cases that energy is supplied by fossil-fuel burning power plants. Volts for oil: https://m.youtube.com/watch?v=BQpX-9OyEr4 https://m.youtube.com/watch?v=BQpX-9OyEr4
    - edblarney 10y ago
      You proved my point. 4.5 kWh is not a lot of energy. It's the amount of energy needed to light a 1K lightbulb for 4 hours. It's a pittance compared to what you burn in you car. 4.5Kw/h won't get you around the block :)
      - zrail 10y ago
        A 1kW lightbulb is rather bright and not used in homes, more so in studios. A better comparison might be 10 100W bulbs or maybe an average chandelier.
        Reason077 10y ago
        Even 100W bulbs are pretty rare now days (illegal in the EU), replaced with LED versions that consume far less energy. 4.5 kWh is really a tremendous amount of energy just to refine a single gallon of gasoline. And it's energy that's completely lost, just converting hydrocarbons from one form into another. By putting that energy directly into electric vehicles instead, you'd be able to power around half of all the vehicles on the road!
      - phlo 10y ago
        I think you may be mistaken about amounts of energy. Typical modern domestic-use light bulb (ccfl) are rated around 20 watts. 100 W was the typical maximum in incandescent light bulbs for domestic use, excluding some very bright halogen bulbs at around 200 W. 1000 W bulbs are mainly used in studio applications (as someone else mentioned) and for stage lighting. On the subject of getting around the block: A kilogram of gasoline contains some 46 MJ of energy. Gasoline is a bit lighter than water, so one kilo is around 1.3 liters. 46 MJ is equal to, roughly, 13 KWh, so 4.5 KWh are around 300 grams, or around 400 ml. A Manhattan city block is around 80x280 Meters, for a circumference of roughly 720 Meters. An inefficient modern car might use 8 Liters per 100 Kilometers, so 400 ml (or roughly 4.5 KWh) will move an inefficient modern car by around 5 Kilometers. In other words, it'll get you around the block. Not once, not twice, but slightly less than 7 times.
- enraged_camel 10y ago
  At the expense of cleaner, safer ones no less.
erikpukinskis 10y ago
And many of those are bad. Ask people in the visual effects industry how they feel about Canada's tax breaks for film production. These tax breaks incentivize wasting money on travel and uprooting families to trot around the globe chasing favorable tax laws. It's one thing to set a low tax rate, it's another thing to create the tax equivalent of a "loss leader" as marketing for a broader economy. I'm not saying it's immoral, but it causes chaos in the pricing signals and should be done carefully.
ramy_d 10y ago
> Almost all entertainment in Canada for example, is done nearly tax free. Categorically untrue.
josho 10y ago
The entertainment industry in Canada receives tax incentives to encourage sustaining and sharing Canadian heritage & values, which would otherwise be lost due to the media juggernaut to the south. It is not always successful, but that is the intent. What is the motivation to give a highly profitable industry tax incentives?

woofyman 10y ago

Carrier is the latest recipient of a tax break. http://www.zerohedge.com/news/2016-11-30/carrier-issues-statement-trump-deal-incentives-offered-were-important-consideration http://www.zerohedge.com/news/2016-11-30/carrier-issues-stat...

JulianMorrison 10y ago

That only goes so far. If people literally don't want the oil, at some point those tax breaks are going to look vulnerable.

btilly 10y ago

I agree that this is a stupid policy, but there is some attempt at logic behind it. Oil production has the problem that increasing in oil production requires spending money that will only pay off if the price of oil remains high for several years. Cheap producers like Saudi Arabia know this, and so try to make the price fluctuate with enough lows to wipe out expensive oil producers, and enough highs to get rich themselves. More marginal properties would make money, but it is hard to survive the lows. Therefore government policy that produces an effective price floor encourages the production of otherwise marginal oil. This is effectively a bet that increased tax revenue from future production is worth the risk of that tax guarantee. And in the short run you get an increase in jobs for no actual outlay of resources. Which is a trick any politician can appreciate. That said, it remains a bad policy. Once implemented, lobbying efforts are virtually guaranteed to expand government support until the public is guaranteed to lose money. Doubly so because oil producers can now play one government off against another in a race to see who can offer more. (Sports teams have mastered that particular game...)

EGreg 10y ago
And if they didn't, we might have built a sustainable society faster and invested in sustainable energy sooner. It could have been done in the 80s. I know it's scary to imagine Americans driving on smaller cars and bicycles and public transport like Europeans... but we would survive it :)
- alivelore 10y ago
  Average commute time in the us is lower than almost all of europe (https://goo.gl/r8DJqz https://goo.gl/r8DJqz) and public transport not only needs billions in investment to be built but there are very few places where it doesn't run on subsidies. So yeah you're asking americans to a) take longer to get to work b) constantly subsidise a system that will keep on losing money. Based on the political makeup of the country i'd say you can keep on dreamin' :)
  - EGreg 10y ago
    I live in NYC where it is reality :-P

tomcam 10y ago

Solar tax credits are also corporate welfare.

crdoconnor 10y ago
No, it's a reflection of the lower externalities inflicted by solar.

baldfat 10y ago

Pennsylvania has tax free fracking because it provides high paying jobs. We are the only state that provides tax free fracking and it blows my mind. Texas and other strong Republican states take taxes from oil production but in PA nothing. The "Pro-Fracking" groups says that PA had 250,000 jobs but it ended up including This number captured everyone in those industries including every road construction worker, trucker, engineer, and steel worker in Pennsylvania. The number is actually around 20,000 and the state makes no tax money from the production and only from income tax.