Obama finally recognizes increasing supply lowers prices

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Obama finally recognizes increasing supply lowers prices

Postby Michael Pelletier » Mon Aug 04, 2008 2:27 pm

Obama calls for tapping nation's strategic oil reserves
(CNN) – Barack Obama on Monday called for tapping into strategic oil reserves as part of his plan to provide relief from high gas prices.


Previously on Obama for President:
We cannot drill our way out of this crisis.


Maybe he finally had a crash course in Economics 101, assuming that he recognizes that a barrel of oil from the SPR is exactly equivalent to a barrel of oil from a new oil well.

But it would appear that the idea that emergency reserves are for emergencies, such as a hurricane's devastation of production and delivery systems, is taught in the 200-level courses.
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Re: Obama finally recognizes increasing supply lowers prices

Postby platypusman » Mon Aug 04, 2008 2:50 pm

Can you say Flip-Flop!

Obama: Tap nation's oil reserve to help gas prices
Aug 4 12:44 PM US/Eastern
By TOM RAUM
Associated Press Writer 36 Comments

Obama Reversal: Tap Oil Reserve to Help Gas Prices

LANSING, Mich. (AP) - In a reversal, Barack Obama proposed Monday that the government sell 70 million barrels of oil from its strategic petroleum stockpile to help reduce gasoline prices.
The Democratic presidential candidate said in a major energy speech that in the short-run the move could help drive down gasoline prices that now top $4 a gallon. Previously, Obama opposed tapping into the reserve, located in caverns in Texas and Louisiana.
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Re: Obama finally recognizes increasing supply lowers prices

Postby RD » Mon Aug 04, 2008 3:01 pm

You guys can't seriously be dumb enough not to see the difference; well, maybe platypus, but certainly not MP. It's actually worse for MP, since he's clearly being intellectually dishonest. here I won't even bother to explain the difference between new drilling and releasing oil from strategic reserves, because most everyone reading this, MP included, knows the difference.

It takes quite a bit of desperation to distort things in order to produce the appearance of a flip flop. Desperation. It's not lost on the majority of us.
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Re: Obama finally recognizes increasing supply lowers prices

Postby platypusman » Mon Aug 04, 2008 3:08 pm

RD wrote:You guys can't seriously be dumb enough not to see the difference; well, maybe platypus, but certainly not MP. It's actually worse for MP, since he's clearly being intellectually dishonest. here I won't even bother to explain the difference between new drilling and releasing oil from strategic reserves, because most everyone reading this, MP included, knows the difference.

It takes quite a bit of desperation to distort things in order to produce the appearance of a flip flop. Desperation. It's not lost on the majority of us.


RD you are incorrect with your assessment. It was not posters on this forum who said Obama flip-flopped again. The AP said Obama reversed (flip-flopped) his position again.

LANSING, Mich. (AP) - In a reversal, Barack Obama proposed Monday that the government sell 70 million barrels of oil from its strategic petroleum stockpile to help reduce gasoline prices.
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Re: Obama finally recognizes increasing supply lowers prices

Postby Jeannine Stergios » Mon Aug 04, 2008 3:14 pm

RD

You guys can't seriously be dumb enough not to see the difference; well, maybe platypus, but certainly not MP. It's actually worse for MP, since he's clearly being intellectually dishonest. here I won't even bother to explain the difference between new drilling and releasing oil from strategic reserves, because most everyone reading this, MP included, knows the difference.

It takes quite a bit of desperation to distort things in order to produce the appearance of a flip flop. Desperation. It's not lost on the majority of us.


Talk about spin and desperation - look in the mirror. "produce the appearance of a flip flop?" That is too funny. A flip flop is a flip flop - it's not the "appearance" of one.
This guy will do anything to win. And RD can't drink the kool aid fast enough :shock:
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Re: Obama finally recognizes increasing supply lowers prices

Postby RD » Mon Aug 04, 2008 3:25 pm

I will simply respond by quoting MP's post that started this thread.

Michael Pelletier wrote:
(CNN) – Barack Obama on Monday called for tapping into strategic oil reserves as part of his plan to provide relief from high gas prices.


Previously on Obama for President:
We cannot drill our way out of this crisis.



You all know the difference, you're just pretending to ignorant this time. Sheer desperation.
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Re: Obama finally recognizes increasing supply lowers prices

Postby Jeannine Stergios » Mon Aug 04, 2008 4:07 pm

RD

HA! Selling our reserves doesn't provide a larger supply - but inflating our tires should solve it right?

Do you understand what the purpose of offshore drilling is?
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Re: Obama finally recognizes increasing supply lowers prices

Postby Michael Pelletier » Mon Aug 04, 2008 6:55 pm

RD wrote:You guys can't seriously be dumb enough not to see the difference; well, maybe platypus, but certainly not MP. It's actually worse for MP, since he's clearly being intellectually dishonest. here I won't even bother to explain the difference between new drilling and releasing oil from strategic reserves, because most everyone reading this, MP included, knows the difference.

Yes, the difference is that squandering of the SPR can be begun in a matter of weeks, while new oil wells take longer. Even longer yet if you are forced to jump through the maze of flaming hoops set forth by governments and activists at every step of the process.

Pelosi and her colleagues released 70,000 barrels per day from the reserves - by suspending filling - back in mid-May when oil was $125 a barrel, and it climbed to nearly $150 a barrel before the offshore drilling ban EO repeal was signed by the President. She said that the SPR halt would save 5 to 24 cents per gallon, but regular unleaded started May at $3.50 per gallon and spent the entire month of June up to July 14 hovering at $4.00. Looks like her calculations were 55 to 74 cents off, and yet we're supposed to trust her energy plans...

Suppose we completely drain the SPR, it makes no substantive difference, as has been the case since May, and then Iran nukes Saudi Arabia? Will Pelosi and Reid and anyone who voted with them submit to criminal charges as food riots break out in New York City and Los Angeles because trucks can't get in and people can't get out?
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Re: Obama finally recognizes increasing supply lowers prices

Postby RD » Mon Aug 04, 2008 7:00 pm

Michael Pelletier wrote:
RD wrote:You guys can't seriously be dumb enough not to see the difference; well, maybe platypus, but certainly not MP. It's actually worse for MP, since he's clearly being intellectually dishonest. here I won't even bother to explain the difference between new drilling and releasing oil from strategic reserves, because most everyone reading this, MP included, knows the difference.

Yes, the difference is that drawdown of the SPR can be begun in a matter of weeks, while new oil wells take longer.

So you're admitting that this isn't a flip flop by Obama at all. Thank you for your honesty. It's also interesting that your thread names Obama specifically, in a demeaning way, yet your recent post doesn't have anything to do with him at all. Perhaps you should change the title of this thread to reflect your recent honesty.
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Re: Obama finally recognizes increasing supply lowers prices

Postby TCF » Mon Aug 04, 2008 8:15 pm

From the wallstreet journal.

What Is a 'Windfall' Profit?
August 4, 2008
The "windfall profits" tax is back, with Barack Obama stumping again to apply it to a handful of big oil companies. Which raises a few questions: What is a "windfall" profit anyway? How does it differ from your everyday, run of the mill profit? Is it some absolute number, a matter of return on equity or sales -- or does it merely depend on who earns it?

Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama's "emergency" plan, announced on Friday, doesn't offer any clarity. To pay for "stimulus" checks of $1,000 for families and $500 for individuals, the Senator says government would take "a reasonable share" of oil company profits.


Mr. Obama didn't bother to define "reasonable," and neither did Dick Durbin, the second-ranking Senate Democrat, when he recently declared that "The oil companies need to know that there is a limit on how much profit they can take in this economy." Really? This extraordinary redefinition of free-market success could use some parsing.

Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any "windfall" tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we're missing some Obama-Durbin business subtlety.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon's profits don't seem so large. Exxon's profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

If that's what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery -- both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau's industry rankings. The latter two double the returns of Big Oil, though of course government has already became a tacit shareholder in Big Tobacco through the various legal settlements that guarantee a revenue stream for years to come.

In a tax bill on oil earlier this summer, no fewer than 51 Senators voted to impose a 25% windfall tax on a U.S.-based oil company whose profits grew by more than 10% in a single year and wasn't investing enough in "renewable" energy. This suggests that a windfall is defined by profits growing too fast. No one knows where that 10% came from, besides political convenience. But if 10% is the new standard, the tech industry is going to have to rethink its growth arc. So will LG, the electronics company, which saw its profits grow by 505% in 2007. Abbott Laboratories hit 110%.

If Senator Obama is as exercised about "outrageous" profits as he says he is, he might also have to turn on a few liberal darlings. Oh, say, Berkshire Hathaway. Warren Buffett's outfit pulled in $11 billion last year, up 29% from 2006. Its profit margin -- if that's the relevant figure -- was 11.47%, which beats out the American oil majors.

Or consider Google, which earned a mere $4.2 billion but at a whopping 25.3% margin. Google earns far more from each of its sales dollars than does Exxon, but why doesn't Mr. Obama consider its advertising-search windfall worthy of special taxation?

The fun part about this game is anyone can play. Jim Johnson, formerly of Fannie Mae and formerly a political fixer for Mr. Obama, reaped a windfall before Fannie's multibillion-dollar accounting scandal. Bill Clinton took down as much as $15 million working as a rainmaker for billionaire financier Ron Burkle's Yucaipa Companies. This may be the very definition of "windfall."

General Electric profits by investing in the alternative energy technology that Mr. Obama says Congress should subsidize even more heavily than it already does. GE's profit margin in 2007 was 10.3%, about the same as profiteering Exxon's. Private-equity shops like Khosla Ventures and Kleiner Perkins, which recently hired Al Gore, also invest in alternative energy start-ups, though they keep their margins to themselves. We can safely assume their profits are lofty, much like those of George Soros's investment funds.

The point isn't that these folks (other than Mr. Clinton) have something to apologize for, or that these firms are somehow more "deserving" of windfall tax extortion than Big Oil. The point is that what constitutes an abnormal profit is entirely arbitrary. It is in the eye of the political beholder, who is usually looking to soak some unpopular business. In other words, a windfall is nothing more than a profit earned by a business that some politician dislikes. And a tax on that profit is merely a form of politically motivated expropriation.

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Re: Obama finally recognizes increasing supply lowers prices

Postby Jeannine Stergios » Tue Aug 05, 2008 10:25 am

Michael P

Pelosi and her colleagues released 70,000 barrels per day from the reserves - by suspending filling - back in mid-May when oil was $125 a barrel, and it climbed to nearly $150 a barrel before the offshore drilling ban EO repeal was signed by the President. She said that the SPR halt would save 5 to 24 cents per gallon, but regular unleaded started May at $3.50 per gallon and spent the entire month of June up to July 14 hovering at $4.00. Looks like her calculations were 55 to 74 cents off, and yet we're supposed to trust her energy plans...


I didn't know that. Even more outrageous than I thought. Please send me a link to this information. Are they still releasing more oil? What a reckless thing to do.
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