New Hampshire, USA --
Fremont-Calif.-based Solyndra, which in 2009 received a $535 million federal loan guarantee, announced Wednesday that it would file for Chapter 11 bankruptcy protection and immediately lay off 1,100 full-time and temporary employees.
The announcement promises to heighten scrutiny of the Department of Energy loan program, which has already been the target of an investigation led by House Republicans. Industry analysts also see the potential for political fallout and the possibility that those pushing for budget cuts will hold the Solyndra bankruptcy up as an example of wasteful spending.
Rhone Resch, president and CEO of SEIA, cautioned against taking a narrow perspective of the Solyndra bankruptcy.
“The success of the solar industry cannot be viewed through the lens of one company,” said Resch in a written comment. “Like all industries, some companies will fare differently than others. While the closure of Solyndra’s operations is disappointing, the solar industry as a whole is a bright spot in the U.S. economy.”
Solyndra’s Demise
The company had downsized its planned growth starting in 2010 when the CIGS thin-film manufacturer pulled an IPO, restructured its executive team, and announced plans to close one of its California plants and delay expansion of its newest facility.
According to its website, Solyndra was in the process of ramping up to 300 MW at its California facility. In 2010, the company completed more than 1,000 installations across the world. It may now look to sell its business and licensing of its advanced CIGS technology.
The company received much fanfare for its innovative rooftop technology and big ambitions. It was held up as an example of a company thriving behind American technology and manufacturing during visits by then-Gov. Arnold Schwarzenegger, Energy Secretary Steven Chu and President Obama.
According to a company press release, Solyndra saw strong growth in the first half of 2011 and secured a number of orders for very large commercial rooftops in North America. Officials said the company could not “achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers.” The company went on to say a global oversupply of solar panels, falling prices and uncertainty in traditional markets such as Europe led to its decision to exit the solar business.
The news out of California ends what has proven to be a tough month for solar manufacturers in America. U.S.-based Evergreen Solar, also a recipient of strong government backing, filed for bankruptcy and shut down U.S. manufacturing while Germany-based Solon decided to close its American manufacturing operations in favor of focusing on its role as a developer. In both instances, competition from China was cited as a factor in the moves.
DOE Program
According to Robert Lahey, senior legislative analyst at Ardour Capital, the DOE loan program has had troubles from the start. The half-a-billion dollar investment in Solyndra’s manufacturing facility was the first big bet made by the federal program, and ultimately, it was a bad one.
He said over the past year new leadership has shifted the focus more toward solar developments, such as the $4.5 billion guarantee made to First Solar this summer. “The Department of Energy doesn’t look good right now,” said Lahey. “To be fair to the program, if you were to wait another six months and look at some of these others projects (like First Solar), it’d look better.”
Resch on Wednesday reaffirmed his support for the program. “The DOE Loan Guarantee Program is a success, attracting necessary private capital for solar projects and manufacturing plants,” he said.
The program is scheduled to sunset at the end of this year, and according to Lahey, the opportunity for it to be defunded has passed. Cuts to the program were avoided earlier this year and again during the debt ceiling negotiations. But it could come up again due to the bipartisan congressional panel tasked with hacking into the budget deficit. However, come November when that committee is expected to lay out its plan, it’s unlikely the loan program will be cut retroactively.
With calls for debt reduction growing louder by the month, the program’s future is uncertain. Still, many on Capitol Hill feel perhaps a revised version of the program should have a future. “But their task just got a lot harder,” said Lahey, “because of Solyndra and Evergreen and because of the impact of the debt debate.”
House Investigation
According to a letter sent earlier this year to the Office of Management and Budget, Republican leaders of the House Energy and Commerce Committee expressed concern over actions by the company following the federal loan to Solyndra. “Since the loan guarantee was closed in September 2009, Solyndra has suffered a number of financial setbacks, including the cancellation of a planned public offering in June 2010 and problems with cash flow.”
They also cited “red flags” raised by some of the president’s top advisors over OMB’s review process.
As part of an interagency review process, OMB is responsible for reviewing and approving the Credit Subsidy Costs of the DOE loan guarantees. The implementation of the DOE loan guarantee program, and OMB’s role in it, were the subjects of an October 25, 2010, Briefing Memorandum addressed to President Obama from Carol Browner, then-Director of the White House Office of Energy and Climate Change Policy; Ron Klain, then-Chief of Staff to Vice President Biden; and Lawrence Summers, then-Director of the National Economic Council. That memorandum notes that the loan guarantee program had been subjected to criticism for its ‘slow implementation’ and ‘making commitments to projects that would have happened anyway and thus fail to advance [the President’s] clean energy agenda.’
The letter followed another letter sent to Energy Secretary Steven Chu questioning why the agency selected Solyndra as a loan recipient. The letter also requested documents detailing the decision-making process associated with the loan.
Impact on Manufacturing
According to SEIA, the U.S. solar industry employs more than 100,000 workers at more than 5,500 companies. The trade organization also pointed to a recent report that found the U.S. was a net exporter of $1.9 billion worth of solar energy products in 2010.
“In the last 18 months, solar companies have either added or expanded almost 60 factories in the U.S. and driven the installed cost of solar down by 30 percent,” said Resch.
Many in the industry, though, have concerns about the country’s viability as a solar manufacturing base and its ability to compete with growing Asian dominance. Currently, about 60 percent of today’s modules are made in China. Though many Chinese companies are moving into the U.S. space, it’s often as an assembler of modules rather than as a manufacturer of cells. The trade-offs for those companies are higher labor costs, lower shipping costs, and eventually, a “Made in the U.S.A. sticker.”
“We have to get more technologies developed here in the U.S.,” said Adam Krop, senior solar analyst at Ardour Capital. “I don’t think much of the heavy-lifting on the manufacturing side will be done here. I don’t see a change in the near future. I think it will come down to developing new technologies and farming out those ideas and those platforms, and maybe creating partnerships with Asian-based entities [that can do the manufacturing].”
Though more than 1,000 jobs were lost due to Wednesday’s announcement, Krop says a strong solar presence can lead to stable gains in employment. They’ll be in construction, however, and not likely in manufacturing. Predictable subsidies, said Krop, will lead to more development, which will then create a strong construction base.
Before we get to that point, said Krop, we’ll have to get through industry shake-ups, such as the Solyndra bankruptcy.
“It’s going to be such a high-profile event,” said Krop. “You will have naysayers point to it, saying it’s too expensive of a technology. In the end, it’s about getting solar on your rooftops and into your communities in a cost-effective manner.”
It's time to divert subsidies away from fossil fuels and into renewables. This company closing it's doors after the significant innovation that it has accomplished is not going to help the American economy. I see a lot of federal and other government buildings out there without solar panels on the roofs of them... Then I see massive subsidies going into fossil fuels. Even more expense from the use of fossil fuels is passed to our already over burdened health care programs. The article states the point that in 6 months time the picture could look significantly different then now. Lets keep the plant running for at least that long with some much needed clean energy projects on government properties! Let's keep that plant churning out high quality "Made in America" solar panels. It's the best choice for our future.
The Government isn't the only financier to misguess. Certainly a number of VCs have done likewise but their rationale is that only a small percentage of investments will pay off - the probability game. Solyndra has the ease of panel (tube) placement for labor reduction combined with better wind resistance as a plus but could not overcome the watts/sq ft problem that plagues most thin film applications. EPV in NJ was another in the same class. The real problem is basic misunderstanding of market mix strategies hell bent on product only.
Rich,
I think it's important that industry participants develop a perspective on the Solyndra failure and what it means moving forward. Your statement below was intriguing. Would you care to expand on this comment?
"The real problem is basic misunderstanding of market mix strategies hell bent on product only."
I tried in vain to work with this company. It appeared to be the most dis-organized company that I had the dis-pleasure of contacting. It's an excellent product but the management team should be in jail.
I believe Paul Purcell has the right idea and I'd purchase stock in the new company that would take over this mess. I'm very sorry to read about the loss of jobs that this is creating.
On another note stop allowing illegal people to enter America, deport those who are here illegally and we won't have as large of an unemployment problem.
Everyone that I know who is out of work and has been will do any job to support their family. So please cut the crap of needing illegals to do jobs that Americans won't.
Sorry to be off subject but this is very close to home for too many Americans at this time.
We desperately need solar energy and we desperately need renewable energy jobs. Yet here 1,100 jobs have been lost and a factory closed because of Chinese competition. I used to visit university research labs in the USA for many years in my job. I was always struck by seeing the large number of young Chinese students doing their PhD's in USA - no doubt, in many cases, to take back all their knowledge and expertise to their home country. So this is the payoff? We are all short-sighted fools. I'm sure the Chinese are laughing at us - and we deserve it.
I was told by a state labor official who visited Taiwan and met with their trade leaders that at an after meeting dinner over drinks one of the Taiwan officials literally told him that 'you American's are effing (yes he used the f word) moron's. You keep giving us all your technology and we do the manufacturing and then you wonder why you have unemployment and get beaten over the head in trade' He said it raised many eyebrows of American's in attendance but not with the Taiwanese in attendance. To them this statement was obvious and probably was spoken quite often by most.
This was said just after he left what he described as the most modern,massive and well equipped technology/industrial trades institute he had ever seen on any continent.
This state official is now running for Congress since he sees our ultimate demise as a first world country if we don't soon wise up.He is also demanding that all state high schools re institute shop classes. High tech shop classes. Currently there is not a single high school in Oregon that has shop.That 's like a school having a swimming pool but never putting water in it. Shop should have never been dropped and if I had my way would be a required class even if you wanted to be a doctor. Would let more folks deal with our ever increasingly high tech lifestyle
It's hard to know what all went into this unfortunate turn of events, just based on this article. Just like any industry, there are good players and not-so-good players. Not to suggest that Solyndra was poorly managed. But perhaps they were good at engineering and development but not marketing. Who knows? It's a competitive world and there will always be winners and losers. I think Rhone is spot on, however. Let's not let the entire loan program or the viability of the industry be wholly judged on this one event.
The Chinese have absolutely no qualms in blatantly copying Western technology, ignoring intellectual property rights and patents, so we should do the same to them. There's no point in beating round the bush, we are in an economic war with China and they won't cut us any slack - they will crush us willingly. Ergo, we have to behave accordingly. I don't see why we cannot have import tariffs on Chinese goods. Our trade with them is essentially one-way, so how can they respond? Stop importing Buick cars? Walmart won't like it, but to hell with them, I'm sick of cheap products that fall apart after minimal usage.
I am only surprised that it took this long. I knew this would happen years ago (http://gigaom.com/cleantech/solyndras-estimated-market-cap-up-to-2b-report/). This is one of the two worst ideas in solar (and I have seen a lot). The idea of minimizing the use of you solar material versus maximizing it (like concentrated solar) doesn't make a lot of sense. The cost will be driven down by using the materials more effectively like concentrated photovoltaic (CPV). I especially like the Rainbow Concentrator by Sol Solution (www.Sol-Solution.net).
Comment
11 of 32
Anonymous
September 1, 2011
I visited the Solyndra booth at Solar Power International 2010 and was impressed by their technology, but the people manning the booth could not answer a very fundamental question. How will this techology compete on a $/watt basis against conventional crystalline silicon and thin film technologies? They could explain the benefits of better air flow, capturing relective light off of the roof and lower installation costs but they avoided answering my question directly. It all comes down to $/watt and more importantly the cost per kwh on the energy produced over the life of the system (Levelized Cost of Energy). In the end, Solyndra made a module that could not compete against imported OR domesticaly manufactured solar modules.
I was floored when I heard about the DOE loan guarantee. This was a highly speculative gamble with taxpayer money that never should have happened. If Solyndra's technology had the potential to significantly reduce LCOE in actual applications, VC and other private capital would have flooded in. The DOE was suckered on this deal and heads are going to roll. This is a real tragedy for the the American taxpayer and the 1100 employees of Solyndra. But it was a nice photo op for the Obama Administration when they broke ground on the plant. 1100 short term jobs created at a mere cost of $535 million. Nice job Mr. President!
Going forward I hope that the DOE is a little more conservative when risking our money. The First Solar loan guarantee is a good start. This is a proven company with strong management, a great track record and most importantly, they produce a solar module at one of the lowest cost per watt in the industry.
NOT SURPRISED! Project management and project controls are absent.
Concentrate on small PV systems to act as distributed power generation.
Comment
13 of 32
Anonymous
September 2, 2011
NOT SURPRISED!GOVERNMENT MANGEMENT AND GOVERNMENT CONTROLS ARE ABSCENT.We are on the Titanic, and well below the deck. we have big business running a government that is concerned making a profit so that they can make a larger donation to the next election campaign and thus receive more government contracts at higher profits or loan guarantees ( Black Water,Hally Bury,etc.,.ect. pardon the spelling). Follow the trail, who made the money on this one?I'm am not talking about the CEO's and Presidents of the company. I'm talking about the elected officials that received the contributions. As I said we are on the Titanic and at this time I think we need to contact China and see if they are going to ship us any Life Boats, at least the executives and the government can take some of our money and save them selves with our Tax Dollars.
It's true that we need a policy of pulling subsidies from fossil fuels to renewables. The oil companies are making profits in the billions and don't need the subsidies. Even so, if they lose the subsidies, they will pass that revenue loss on to the consumers.
More importantly, on the topic of subsidizing renewable energy companies, specifically solar, there was an article in the September 2, 2011, NY Times specifically on this subject. Not only is China providing huge subsidies to renewable energy companies, but they are basically giving them massive amounts of land to use. You can find the article at: http://www.nytimes.com/2011/09/02/business/global/us-solar-company-bankruptcies-a-boon-for-china.html?_r=1&hp
The phrase "to divert or pull or take subsidies away from fossil fuels and into renewables." is bandied about freely without any defining which subsidies are available to energy companies that are not available to other US companies operating internationally. Please be specific. Also Solyndra is not the first but only one of a number of Big Government selected companies and funded green energy company to go bankrupt. The havoc created by the Irene with thousands still without power should raise considerable concern about putting all the energy eggs in one electric basket.
IMO the problem isn't cheap Asian imports but a bad model. If not China then the speed of advancing technology would be sufficient to doom these companies. The critics of DOEs funding model have a point, we've failed to remember history and the greater good will be served when we take the lesson to heart about putting the cart ahead of the horse. I've just completed 11 months of green energy training focused on solar, and so i personally experience this tragedy for our solar industry, but the disaster is the model as a whole because it looks to supply small scale energy through a global marketplace. Community energy systems need to begin with community-scale planning, not with corporate schemes to profit through global sales.
The tax payers should not be bank rolling any kind of energy. If an idea can not support itself then it goes under. Fossil fuels do this, and can without any of the government support they now get.
GET THE GOVERNMENT OUT OF THE LOOP, OIL AND GAS PRICES GO UP AND IN TURN MAKE ALTERNATIVES VIABLE.
It's easy to blame immigrants, Obama, the Chinese, political officials, Solyndra, or a free market system that puts production in low cost wage areas, but that does not begin to address the real problem: the energy that has allowed extremely high living standards today is finite and time is running out to replace it.
During the 1960's the US used more oil than it had in all previous decades. With depletion of any resource essentially following a bell curve and peak oil occurring about 2005 that probably means that by 2040, the next decade will use more oil than all future decades. On the downside of the bell curve, more people will demand diminishing reserves, be more eager to challenge our right to them, and militaries will be less effective (~90% of their fuel is oil). Solar people say invest in renewable energy; without giving needed perspective.
One US$ used to drill for oil in Iraq or Saudi Arabia produces US$20-30 of product value per month. That fuels enormous economic growth, including Wall Street, tech investments, education, wars, and transportation that allows low cost labor markets to benefit consumers. One US$ invested for US oil might produce only US$0.20-0.30 per month, due to lower yields and higher access costs. It is no wonder the US military is so active elsewhere!.
By contrast, one US$ invested in today's PV panels nets less than a half cent per month. In that context, what do you do for today's new born? Do you spend a trillion dollars fighting the next oil war or spend a billion dollars on solar possibilities? When today's newborn graduate from advanced degrees, they will face a world where their first decade in the work force may consume more oil than all future decades. It is no wonder that it is easier to blame someone for today's failures, hope for improbable solutions (fusion energy, harnessing methane hydrate, or fracking shale without regard for water rights), or grab the remaining births in life boats with oil wars.
I just signed up at R.E.W., and have to say that I am impressed by the dialog and ideas I am seeing in the postings. It seems that every other blog I have visited features moronic back-and-forth attacks that accomplish nothing. I hope that the positive dialog continues...
I agree with most of what I have read in this thread. I particularly agree with LarryOfGalaxy when he mentions the lack of high school shop classes. I'm an engineer now, and I thank my Jr High and H.S. shop classes for much of the practical hands-on skills that I now have.
"Back in the day", my friends and I rebuilt our cars from the ground up, and learned a tremendous amount about mechanics, electrical, etc. My kids now sit at the computer, and are clueless about how to fix things (partly because cars are better built now and don't need constant maintenance, thanks to the Japanese invasion!).
We are, in effect, losing an entire generation when it comes to practical mechanical skills. It seems to me that shop classes are one way to stem this loss of vital hands-on skill, which can lead to innovative design skills later in one's career.
The Obama administration is using taxpayer monies to pick winners in the energy field and taxpayers are the losers as these companies go into bankruptcy, with no financial accounting. So who ended up with the half a billion dollars at Solyndra, One of Obama's big financial backers and founder of Solyndra, maybe?
And who are the bureaucrats and what is their business, financial, scientific backgrounds who are making these decisions to direct monies as venture capitalists?
"Both Newton and Einstein used 'thought' ideas to set up and think through problems and develop scientific solutions and there doesn't see to have been much thought given to to possible problems and unintended consequences of an all electric world when hurricanes, tornadoes, earthquakes, floods, droughts, hail, snow/ice storms or enemy actions, EMP, wreck havoc on the power transmission systems.
The future might be predicted by the original movie, "The Day the Earth Stood Still."..
"Evidently the all electric proponents has never lived through an extended blackout when there was no electric power. At least today gasoline and diesel powered emergency vehicles, fire, police, power company trucks from all over the US, ambulances and peoples' own vehicles were operational. How will the power companies,governments and individuals cope when such necessary vehicles are dependent on electric power and transmission lines are brought down by ice storms, tornadoes, hurricanes or other weather occurrence or an extended blackout occurs from overloads? Is there a back-up in the proposals to account for natural disasters or enemy action?"
Solyndra was not the first and will not be the last to waste hundreds of millions of taxpayer dollars.
Jack Anderson (with James Boyd) dealt a lot with one subsidy to the Oil Industry in his 1983 book, FIASCO: (Page 37)
'The percentage depletion allowance was Oil's creative leap beyond the hackneyed, confining principle that business, in arriving at its taxable income, may deduct its capital expenses over a fixed time period. 'Depletion' opened up the exciting, unconfined universe of deductions that were not connected to expenses, that soared infinitely beyond expenses, and that, while the oil flowed on, knew no limitation of time. (Oil's operating expenses were also deducted in a uniquely advantageous way.) Under its provisions the owner of an oil well could subtract from his income, before figuring his tax bill, 27.5 % of the gross income from oil and gas each year, no matter how long the well kept pumping or how many times the investment in that well had already been recompensed by the deduction. The only limitation on it was that in any given year the owner could not write off more than half of his taxable income from the well. The way economies of scale worked out in the oil business, this limitation was so well fitted to the operations of the big companies that there was only minor overlapping. (The smaller companies found it difficult to realize more than a 16 or 18 % depletion benefit.)
'In East Texas there were wells that would be pumping 27.5 percent deductible oil forty years and more before they were pumped out. For the country as a whole 'oil depletion' forgave taxes that amounted to between 13 times and 19 times the total drilling and developmental costs. It was a prime factor behind the figure cited earlier - that the 15 largest oil companies paid only 8 % of their net incomes in federal taxes, in contrast with an average tax rate of 42 % for all corporations.'
Page 88: "The large margin for improvement that gaped in our domestic oil development was shown in early 1969, when the Treasury Department published a study done under its commission the previous year by the CONSAD research group. CONSAD found that each $10 of special tax incentive to the oil industry was resulting in only $1 worth of newfound oil - a finding that supported the contention of many students of the oil industry, as summarized by Professor Oppenheimer, that as of the late 1960's 'oil compaies do not reinvest the depletion incentive in new exploration.'"
Comment
23 of 32
Anonymous
September 4, 2011
People talk about lack of US competitiveness in solar module manufacturing; they need to remember First Solar, an American company that is the lowest cost module manufacturer, bar none.
For the record, Obama's and many of the above comments target "Big Oiil" which has not had the 'depletion allowance' since Congress removed it in 1975. Check it out. Only small, independent producers have a 'depletion allowance' of 15 %. Energy companies have an accelerated depreciation allowance common to many industries and not special to the oil industry. Removing it would not increase the total tax take by one cent,bwould remove capital from the private sector quicker.
e-patrick-mosman, You are right, but you left out an important addendum: that the elimination of the depletion allowance was replaced by something even more lucrative to the big oil producers, as the following excerpt from
"In 1975, the Depletion Allowance was limited to small producers who do not operate a refinery (I used to be one). That was intended to stop the 'tax break for the rich.' In its place, Big Oil got the 'intangible drilling cost deduction', which produced an even bigger deduction by letting them deduct 70% of the cost of drilling a well in the first year, and the rest over five years. They also got the 'enhanced oil recovery credit', which pays them for operating stripper wells (marginal, almost played out) and for pumping out-of-spec oil(high sulphur, high viscosity)."
Note the 3rd sentence where it states, " . . . which produced an even bigger deduction . . . "
Of course, if for decade after decade, a very LARGE corporation (or plural- corporations as a whole), receive deductions that individuals do not get, the question should arise in the public mind: Why? How does discriminatory taxation for large corporations serve the "public" interest? I know no individual who is allowed to apply accelerated depreciation to the family car or small business purchases (or that are allowed any kind of analogous "depletion allownace.") Nor do I know of any such individual who either by himself or via an organizaiton has ever consicously or unconsciously had lobbying power anywhere close as that of large corporations.
In his book, 'Take the Rich off Welfare,' [2004, South End Press] Mark Zepezauer also describes how the 1975 restriction of the depletion allownace was actually in some ways an even bigger boon to Big Oil than the prior law (pages 119-120):
'Introduced in 1926, the oil depletion allowance was restricted in 1975 to independent oil companies that don't refine or import oil. To make up for this, the larger, integrated companies were given the intangible drilling cost deduction, which in some ways is even better. It lets them deduct 70% of the cost of setting up a drilling operation in the year those expenses occur, rather than having to depreciate them over the expected life of the well. They can take off the other 30% over the next five years. This boondoggle costs us about $440 million a year.
'A 3rd tax break is the enhanced oil recovery crdit. It encourages oil companies to go after reserves that are more expensive to extract -- like those that have nearly been depleted or that contain especially thick crude oil. The net effect of this credit, which costs us $656 million a year, is that we pay almost twice as much for gasoline made from domestic oil as do for gas made from foreign oil.
'Together, these 3 loopholes sometimes exceeds 100% of the value of the energy produced by that oil. In other words, it would be cheaper in some cases for the government to just buy gas from the companies and give it to taxpayers free of charge. (Of course, without the tax breaks, the oil companies would charge more for gas, bringing our prices closer to that of other countries. This would undoubtedly lower our per capita consumption of gas, wHich is currently the highest in the world.)'
[And we can't have that, can we? As ORWELL said, 'It just wouldn't do.' :D -jajagabor]
Mr. jajagbor,
In an effort to smear the oil industry you first posted a long screed about the "oil depletion allowance" which had not been in effect for major companies for 36 years either, since 1975,either through ignorance or failure to due do diligence. Next you bring up "accelerated depreciation" which allows companies, not just energy companies, to recover investments in plant and equipment,in a shorter period of time thereby increasing companies capital to make further job creating investments. Your attempt to paint this as subsidy is absurd.
If you bothered to research the "enhanced oil recovery credit" you would find it was enacted by Congress to provide some assurance that domestic oil production would be available as part of an energy independence program providing American oil instead of buying foreign oil. It also provided assistance mainly to smaller independent operators who operated these stripper wells. Unfortunately the Obama administration is making every effort to insure that there is no domestic exploration or drilling in the USA making the US more energy dependent on imported oil.
You and other posters should read:
http://www.americanthinker.com/2011/09/obama_green_jobs_con_job_and_the_ill_wind_that_blows_from_spain.html
It's amazing to hear the apologists for oil company 'government welfare'. It's like a group of French peasants,starving and struggling to keep alive in an oppressive environment perpetrated by the tyranny of King Louie and Marie just before the French Revolution. Proclaiming loudly that the creosote (cake) Marie told them to eat as a substitute for bread really wasn't meant as an insult. Rather they argue that Marie simply implied that the cake would taste great stir fried with a little garlic and oil. Arguing that Marie and Louie's disregard for peasant starving while living in luxury and opulence only proves how superior a human they had become. "Pulled themselves up by their own boot straps" in other words.Such nonsense.
A very large portion of the money squandered on the American military to protect the oil companie's assets and access to oil, is a direct subsidy no matter "oil depletion" "enhanced oil recovery credit" etc etc. Who cares. The oil companies pay little if any tax,actually get tax rebates and these companies exert far more influence in our government and energy decisions than is warranted.
"Obama administration is making every effort to insure that there is no domestic exploration or drilling in the USA making the US more energy dependent on imported oil."
That statement could only come from a person whose sole source of 'information' is Fox Channel or other brain dead right wing propaganda organ. Obama is a total servant of the oil and wall street interests just like all presidents and is a devoted corporatist. And domestic oil exploration? Why? Would you do much exploring for eggs if you already knew all your chickens had died? How about looking for ice in a pond in the Mohave Desert in the heat of summer? The US has less than %3 of oil reserves out of a world total. Oil companies don't need an Obama to convince them drilling domestically is a waste of resources. Wake up folks.
To subsidize the extraction of finite reserves in order to pull their value into current years is absurd. Large banks adopted similar strategy when the real estate market became saturated, prices rose too high for new buyers, and new mortgage lending ceased. Banks offered near term interest incentives, eliminated owner capital requirements, and ditched owner repayment credentials. Those best positioned made tens if not hundreds of millions of dollars on the results, while trusting home owners lost future purchasing power, sometimes their families, and more. "Smart" money finessed the banking laws to allow the privatization of future value, and then simply "usurped" that future value. The same thing is now happening with oil and gas.
When there appears to be unlimited carbon resources in the ground, it is easy to get people to believe that they have full right to those resources. When you are on the last of your liquid reserves, that is when you need a new verbal framework for getting people to believe that the rapidly dwindling reserves belong only to the current generation, and preferably to the "smart" money that gets thousands of times more than mere users. The new verbal framework claims any financial oversight is socialism and slowing extraction kills worker's opportunities and makes America weak. However, it was economic incentives that promoted the rapid extraction of our fossil fuel wealth that weakened America. Today's newborn will probably use more oil in their first decade in the workforce than all the oil to be used after that decade, assuming a 7%/year decline in resource extraction at that time. And even though the economic carnage of a real estate con is fresh in our minds, democracies sponsored by wealth are still just as unable to protect the weak or the most able of future generations.
e-patrick mossman, always good to hear your cheerful comments! :D
Actually I wasn't trying to 'smear' the oil industry or any other industry, but simply to provide historical background to the discussion by providing a few excerpts from well known (though not necessarily always well liked by everyone) journalists and investigators.
You are - like everyone - quite free to characterize any or all of the tax laws that were written for the oil industry in any way you like, even bestowing (if you wish) an aura of absolute 'fairness' to said laws (and, for that matter, to said industry!). Likewise, so am I - like everyone else - granted the same freedom to characterize it differently (as larryofgalazy and rrogers both also do in their own fashion).
Insofar as your claim that the Obama administration is obstructing drilling, you might want to check the following out:
http://www.democracynow.org/2011/8/5/headlines#5
(Obama Admin OKs Shell Drilling in Arctic Ocean)
Likewise, in April 2011, the Obama administration issued permits to new drilling in the Gulf of Mexico as well as Alaska.
This is such obvious knowledge I'm surprised that you are unaware of it! But then as larryofgalaxy has pointed out, if your only source of 'news' is Faux News, then it shouldn't be surprising at all.
larryingalaxy my Irish immigrant grandfather warned me as a youngster never get into a hissing contest with snakes, rakes,drunks, fools and preachers of strange religions so I do not respond to those who deal in baseless personal, ad hominem attacks and offer no facts.
jajagabor
Citing completely out of date and out of context information proves what? To paraphrase Mark Anthony "I come to bury the energy companies, not to praise them".As Daniel Patrick Moynihan said "everyone is entitled to his own opinion, but not to his own facts"
Also you really need to check your facts on drilling or lack thereof both onshore and offshore as a majority of the rigs operating in the Gulf, two years ago have departed, no new drilling in taking place offshore the East or West coasts or Alaska and except for North Dakota and Texas onshore thanks to the current administration.
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About:
Steve Leone has been a journalist for more than 15 years and has worked for news organizations in Rhode Island, Maine, New Hampshire, Virginia and California.
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