(01-08-2019 10:41 AM)RiceLad15 Wrote: (01-07-2019 06:47 PM)tanqtonic Wrote: (01-07-2019 05:29 PM)RiceLad15 Wrote: If the current energy industry was completely devoid of government subsidies,
Perhaps you should educate us to these amazing subsidies, lad. I always love to hear a bunch of lefties yelp about 'government subsidies' to the fossil industry. So, instead of the nebulous paeans to these 'subisdies', I would suggest you actually look them up.
Turns out they really dont amount to much.
Otherwise I am going to have to gd fire my tax accountant. Really, I need to know where to sign up for these vaunted subsidies you toss about like a threat. Seriously. I truly do wish to know where this 'free money' tree is....
Quote:your point would have a lot more weight, but it isn't.
Again, why doncha take a stab at those 'subsidies' there, lad. Or just really on a broad nebulous issue, that, when actually looked at, doesnt really amount to a fing hill of beans. I mean, when the most impactful 'subsidy' is simply the timing on extraction costs for tax purposes, your entire 'grab bag' kind of self-deflates.
So, in context, you 'oh so insightful' issue about 'oooh it would be good if you considered the subsidies to the hyrdocarbon indistry you would be more weight-ful' really is a pile of fing beans because those 'oh so vaunted subsidies' *have* been considered there lad. I actually know what the **** they are. More precisely, I know what the **** they aren't. Just saying.
You may want to put the nebulous retort back into storage there.
Quote: As you can see in the remainder of my reply, I believe that the market is not efficiently capturing the true cost of fossil fuel being burned as energy, so correction via support for alternatives or a tax on the fossil fuel industry is needed to level the playing feel. IMO we need to be doing life cycle analyses on all our energy sources and making sure that the negative externalities that the market misses are accounted for.
Funny, do you know the cost of externalities for, say, solar panels? I do. Pretty well, actually. Do you know the simple thermal equivalence used to produce, say, *one* amorphous silicon cell? How abut more structured systems? Funny thing, is that the in-house research that I was involved with never even showed a fing break-even energy-wise. And cripey, we didnt even go into the industrial waste aspect, but even the energy-equivalent on remainders is a pretty sick number.
And the heavy metals issues, and percursor issues are also quite fun to know.
So yes, lad. I know the 'externality' question and issue. Probably to a decent level. But I find it amazing that no one who is religious about alternatives ever attempts to apply those same principles to the corresponding other side of the equation, and all they fing harp about is those items on the hydrocarbon side of the ledger.
And, economically, even with the literal tens of *b*illions of dollars sunk as subsidies into the solar world (actually in the high *hundreds* of *b*illions, probably almost *tr*illion, when you include the subsides by the Europeans, Chinese, Taiwan, Singapore, Malaysia to the manufacturers), the ability to produce solar is still *not* at or below grid parity. Funny that.
It still takes a policy of Austin robbing my neighbor to not just make it a decent payback (6 years), but in the absence of those goodies it would take closer to 22 years to pay me for my solar, even on a nominal basis and not even accounting the lost time value. Great work when you get it.
Quote:But a bit ironic to try and call me a pendant when you're the one quibbling over my use of the word competition... A bit, um, pedantic?
Not ironic at all when you dont seemingly know the actual supposed 'hydrocarbon subsidies' that you gloss over with two words, and gloss over the totaility of the externality issue and seemingly pretend that it only exists on one side of the fence. So, no, not ironic at all.
And, I typically dont try to call the issue of handing out boatloads of largess to one side and claiming *that* as competition. I try not to stretch the 'feel good' of that word well past its breaking point like your attempt.
For some odd reason I dont find that a government handout of 567 million dollars to build an alternative energy factory much of a 'competition' against other energies. Most people I think would see it that way. I guess some might not.
Quote:edit: question for you. why would funding alternative energy research be "massive governmental transfers away from hydrocarbons and to alternatives?" What about supporting alternative research and development explicitly takes government funds away from hydrocarbons? I can at least appreciate why you're suggesting that providing more support to one industry over the other results in less fair competition, but I don't see how supporting sustainable energy is transferring money away from another industry. I'm guessing you're viewing any increase in taxes due to negative externalities of fossil fuel production/use as being the transferring method, regardless of if it was that revenue that was used to fund alternative research?
If you noted I used two phrases, one that included 'away from hydrocarbons' and one that did not. Paricularly here are the two turns I used Quote:'tax hydrocarbons till they cant breathe' isnt 'competition' in any stretch of any language,
Quote:nor is 'handing alternatives boatloads of free cash' any tangible definition of 'competition'
The former was included as a short circuit to the idea of a oft-floated carbon-tax ---- that would be specifically a tax designed not just to raise revenue but to actively discourage hydrocarbons --- in effect a negative subsidy coupled with a positive subsidy to the alternatives.
The latter was used for OC's formulation to simply tax the evil people overall.
Those are the two most used sources of monies --- so I repeated both of them in the sentence.
Tanq, a lot to unpack, so I'll take the low-hanging fruit right now (ones that I don't really need to provide hard numbers for, like oil and gas subsidies such as intangible drilling cost write-offs).
So a cost to drill shouldnt be written off? Funny thing, do you really think that an immediate write-off is such a huge fing 'subsidy' as opposed to the alternative (i.e. a 15 year capital expense write off.) So that is your 'low hanging fruit'? Jeezus Krist that is kind of sad for more than a couple of reasons.
Please do tell, what is the net gain ('subsidy') to the O&G producer after 15 years? Funny thing, it is zero. Wow, what an *enormous* 'subsidy.' I would grant you that as a 'subsidy' if, in the long term, it afforded them any relief from net taxes or resulted in a net positive amount to the producer. But, I hate to tell you -- it doesnt.
In the medium and long term, the O&G producer avoids exactly zero tax liability as a net. What a *HUGE* 'subsidy' to the O&G producers. (sarcasm off)
Especially in light of the new tax bill that gives every other business concern the election to expense capital outlays as opposed to amortize.
Further, the presence of depletion seems to offset that benefit to fairly decent degree.
Additionally, you might have a point if the issue were to all of the capital investment. It is not. The IDC is strictly limited to intangible line items in the drilling process. When you look at the base idea of 'capital improvement' versus 'expense', the items that fall in the IDC column really are more 'expense-like'. For example, if I clear a lot *simply* to clear a lot --- insta-presto it is an expense; there is no capital improvement to which depreciate against. This allows the exploratory well costs and dry holes to be accounted for in the manner in more in what they are. But the people who are prone to call this a 'subsidy' never allow that issue, or the distinction of *what* capital item is being made in order to depreciate against, to really ever enter into the issue.
All they see is an 'unfair' Year zero expense --- which the items under the IDC readily and easily fit. Not to mention that the 'unfair' aspect of a year 0 expense is amde up for in the succeeding years until there is no net benefit to the operator not any net monies 'given' up in that amount of time.
And, especially for non C-corporations, the 'one-year' effect cannot be considered in the computation of AMT for any stakeholder, even further offsetting any advantage. In fact, the IDC issue actually is a detriment to any non C-corporations for this sole reason.
The funny thing is that you are correct that the speed up of expensing serves to 'inhibit' the collection of taxes in year 0. No doubt. What escapes notice from you all is that is made up in all the succeeding years and nets to zero. But you have the *gall* to term this a 'subsidy'? Something that actually nets zero in the medium term? And something that actually is more 'expense-like' than 'capital improvement-like' to boot.
So in your book, something that nets zero for the producer and costs zero to the government is a 'subsidy'. Got it. Language gets curiouser and curiouser at times......
Quote:First, thanks for explaining why you view the taxation as a transfer away from one group and to another. I can see why you view it that way, but I hesitate to follow your lead because that leads to viewing any and all taxes as a redistribution, when they have many different purposes.
What do you call taking money or things from one group to spread around?
Whether the purposes are 'good' (defense, roads, etc.) or 'bad' (Universal wage) the singular act of taking money by law (or by coersion, or both) from one and using it to other purposes is a 'redistribution'.
In short, any taxation fits the abse definition of a redistribution, *regardless* of its use.
Second, any sort of *progressive* theory of taxation simply underscores the redistributive aspect of taxation.
What OC is talking about is an amazing shove in not just taxation, but a major push in progressive taxation. The fact that the end result and/or goal is specious doesnt affect that categorization of it being 'redistributive' -- it just makes it more odious.
Seemingly the plain language concepts of 'subsidy', 'competition', and 'redistribution' are not so plain to some.
Quote:Second, regarding your comment about the negative externalities of solar, while I don't have the same depth of knowledge as you do (I haven't worked for a solar firm), there's a reason I stated that I thought "we need to be doing life cycle analyses on all our energy sources and making sure that the negative externalities that the market misses are accounted for."
You hit on a number of the dirty sides of solar that I was aware of for solar, and why I said my comment above. Any alternative energy is at risk of being ethanol - a shiny beacon on a hill that turns out to be a sham. Ethanol is carbon positive yet its production is still heavily subsidized. Hence why I just said I advocated for life cycle analyses for all energy sources being part of the equation when evaluating what to support and how to support it.
Fair enough.
Quote:But still, the results from current life cycle analyses shouldn't stop funding for R&D, as R&D has the potential to result in breakthroughs that cause those numbers to be turned on their heads.
How does Austin paying me 3.2x for my solar production relative to what I buy the same electron from them benefit R&D?
If the ability to net a producer nothing and cost a third party nothing is a 'subsidy', then what is this? I mean, holy solar flares, this is an 11 ! This a 'super-subsidy' !
How does the Federal income tax benefit of 25% of the cost of a solar installation benefit R&D?
How does the Austin direct payment of 10% pre-installation benefit R&D?
Look, R&D at the Federal level is well funded and healthy. Just ask anyone associated with NREL. Federal expenditures for base scientific research have been part and parcel of the US operations since 1910. The cost of these programs, and of the grants to universities are a part of a drop in the bucket of the operating funds to the United States. Almost an accounting error. And yet they have a healthy output.
The true push for alternatives really should be from the private sector and the push for profits. When you have government exercising rent-sharing strategies to prop inefficient outcomes, that is when you have a problem.
Uber, Lyft, AirBnB etc. are examples of private enterprise operating against the concept of governmental sponsored rent-sharing enterprises.
Look, if the energy equation in terms of economics and efficiency pointed to better, stronger, cost effective sources of energy -- then the efforts that have been made in the last 20 years to the tune of probably a trillion+ dollars worldwide should have had us there. But they dont. And, they probably won't.
And, when you have someone promulgating a highly impactful taxation regime in order to send more money to the rathole, I have serious reservations with that.
Quote:A simple question, do you think the government should be in the business of evaluating negative externalities and acting on them? Either through regulations and fees or through taxation/cap and trade?
When a true, objective, predictive, and repeatable baseline for assessing those externalities can be made -- for sure. For example, the process with CFCs is the poster boy for that type of issue. The science on sulfur-bearing pollutants and nitrogen-bearing pollutants and the link to acid rain is another poster boy. And each had results that, because the cause/effect could be tangibly identified, then a reasonable idea of the 'economic price' price could be assessed. Great examples of internalizing external 'commons' costs.
And in the case of acid rain pollutants, a corresponding economic model could be put into place that put 'free marketized' the pollutant program, instead of the usual knee-jerk command and control regime that is so dearly loved by statists. Funny thing, is that the 'free market' for pollutants actually led to the crash of one or more of those markets due to advancements -- some of those advancements paid for and developed by private actors with some of the funding coming from the sale of amassed 'credits' themselves.
If the powers that be can show that the magical climate sensitivity factor in the energy balance equations shouldnt have to be 'tweaked' or simply guessed at, and if the science of global warming actually elevates to a science via the powers of predictability and repeatability I might join on your crusade. The problem is that it hasnt at this point.
I am *not* saying that growing CO2 has *zero* effect on the energy balance; the low level physics show that it does. The issue is the 'scope' of the effect. At this point, no one with a straight face can make any sort of assessment based on the scientific bedrock principles of predictability and repeatability.
And, when you are putting on one side of the equation such things as an in-fing enormous increase in the taxation of any member of our society and proclaiming that the net proceeds should be dumped into 'alternatives', that is pretty large honking leap of faith (on both sides of that transaction, mind you, not even mentioning the already massive amounts pumped into alternatives with pretty much less than marginal results in return).
