Obama Wants Global End of Fossil Fuel Subsidies

Obama Wants Global End of Fossil Fuel Subsidies

www.cnbc.com

President Barack Obama is calling on the world to end massive government subsidies that encourage the use of fossil fuels blamed for global warming.

The president, who is set to host the G-20 economic summit opening Thursday in Pittsburgh, will propose a gradual elimination, with the time frame to be determined, according to White House officials.

"Later this week, I will work with my colleagues at the G-20 to phase out fossil fuel subsidies so that we can better address our climate challenge," Obama said Tuesday at the United Nations global warming summit.

(visit the link for the full news article)


Related News Links:
www.businessweek.com
www.nytimes.com

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Well it seems President Obama is going ahead with getting the nation into the green technology and away from Fossil fuel.

While the nation will be saving billions of dollars in money that now is been used to reward oil companies, I personally don't agree with the Cap and trade bill that is been waiting to be approved in congress, the bill already has passed the house.

This bill will put a burden on the tax payer in the nation and will punish businesses around.



www.cnbc.com
(visit the link for the full news article)

Good. Big oil makes such obscene profits that they don't need or deserve any subsidies...save the money and use it to develop alternatives.

reply to post by marg6043


I have a stupid question, Marg.

How will it affect us at the pumps? At all? Alot?

What does that mean for we the little folks?

-not too smart when it comes to the money issues-

Some more hypocrisy here?

Obama Underwrites Offshore Drilling

You read that headline correctly. Unfortunately, the Obama Administration is financing oil exploration off Brazil.

The U.S. is going to lend billions of dollars to Brazil's state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil's Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil's planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.

The U.S. Export-Import Bank tells us it has issued a "preliminary commitment" letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount. Ex-Im Bank says it has not decided whether the money will come in the form of a direct loan or loan guarantees. Either way, this corporate foreign aid may strike some readers as odd, given that the U.S. Treasury seems desperate for cash and Petrobras is one of the largest corporations in the Americas.

But look on the bright side. If President Obama has embraced offshore drilling in Brazil, why not in the old U.S.A.? The land of the sorta free and the home of the heavily indebted has enormous offshore oil deposits, and last year ahead of the November elections, with gasoline at $4 a gallon, Congress let a ban on offshore drilling expire.

Sounds like it to me.

It is sad that anything that comes from government this days had a hidden agenda behind it.

Yes, prices at the pump will be raised, but does anybody knows that we the tax payer are the ones paying for this subsidies?

But while the oil companies were reaping outrageous profits under the Bush administration they never gave back any incentives for their gas,
no even when the gas prices where over the roof last summer.

Greedy crocks.

Yes, we probably will be feeling the pinch at the pump after all the oil cartel has grown fat and lazy on greed and profits at our expenses.

Still what it worries me the most is the cap and trade, that will be hitting us in every conceivable way possible, thanks again to greedy private interest groups that are always looking on how to gouge the tax payer for profits.

Now the lending of money in Brazil is not surprise, perhaps because this year in may Brazil and China were having deals and contracts for loans from China into the
Brazil oil ventures

Among the deals signed was a 10-billion-dollar loan extended by policy lender China Development Bank to Brazilian state oil company Petrobras, reflecting Brazil's growing ambition to obtain Chinese funding.

Petrobras also inked a 10-year pact for the delivery of up to 200,000 barrels of crude daily to the energy-craving Asian giant.

All eyes were on whether China and Brazil would discuss ditching the dollar in their bilateral trade and replacing it with their own currencies -- the yuan and the real.

www.energy-daily.com...

Political move? perhaps, deception? we most wonder.

A lot of people get confussed between oil companies, Futures, Refineries and fuel vendors.

Oil Producers retrieve the oil out of the ground and remove the water, oil and other major contaminants. The cost to get the oil out of the ground ranges between about $2 to $60 a barrel (the average is $23 currently, the industry term is "lifted cost") depending on where it is, how deep, access to infrastructure. The subsidies are usually going to these companies to help offset the cost of drilling wells or operating expensive wells when oil prices are low. If oil drops below $50 a barrel then some companies will shut off expensive wells that are not making money. The subsidies help keep those wells running. After the oil is lifted and processed it still needs to be shipped to market. The oil companies pay for those pipelines and they pay for all the wells. The owner of the mineral rights gets a certain amount per barrel taken out of the ground, this cost is included in the Lifted Cost of the oil, a lot of wells the mineral rights are owned by the gov't. The subsidies are generally not cash but are given as a reduced per barrel fee for the mineral rights. Example if the gov't owned the mineral rights and was getting $5 per barrel and wanted to encourage the oil company to take out more oil then they could offer a limited time reduction to $4 per barrel to make a non profitable well profitable again.

Future companies do very little and get the big bucks. The law makes it illegal for a company to sell oil directly to a refinery. The Futures companies buy oil futures. Which are pieces of paper that say x company will provided them Y barrels of oil on X day at Z price. Then a few weeks before X day they resell the oil to a refinery. I have heard from people in the industry that about 10-15% of the price per barrel that you see on the stock market is the profit of the futures company.
I found a couple of articles online that say the portion of the price per barrel that is mark up by the future companies is 60%, not sure I trust the source though.
www.globalresearch.ca...
Here is another article on futures in oil price seekingalpha.com... Though I disagree with his interpritation of the facts he presents. He claims future traders where getting out of oil in the weeks just before oil crashed from $140 per barrel last year, while small investors where buying up the futures at that point. I take that to mean that they bailed because they knew they had artificially pushed it up and let the small guys take the hit for them.

The third link in our chain is the refineries who convert the oil into gasoline, diesel and other products.

The last link is the retail sales (gas stations).

While a large company (like Petro Canada or Exxon or Shell) may have an Oil producer arm, a refinnery arm and a retail sales arm. They operate as seperate companies and can not just give the oil from the producer to the refinery it has to go through the futures market.