Cut oil taxes, OPEC tells Europe (AFP)

(O.K., to me, this make no sense. By invading and occupying Iraq, did that make us a member of OPEC? Because this sounds like the illogical reasoning that comes from the WH.)

Cut oil taxes, OPEC tells Europe

19/11/2005 20h34

RIYADH (AFP) - The world's top energy producers, under pressure to meet global demand, called instead on leading consumer states, mainly in Europe, to cut taxes on oil to alleviate hikes in prices. The Organisation of Petroleum Exporting Countries, which supplies about 40 percent of world oil, and heavyweight member Saudi Arabia, made the call at the opening of the permanent seat of the International Energy Forum in Riyadh.

Saudi King Abdullah, whose Gulf state holds the world's largest oil reserves, vowed to continue to provide enough supplies, but called on leading consumer states to cut taxes on petroleum products. "The policy of the kingdom is based on reaching a reasonable and fair price for oil and to provide enough supplies to all the consumers," he said at the opening, which was accompanied by a forum on the energy industry.

"But all the efforts of the producing countries will not bear fruits if they are not met with a positive position by the main consumer states," he said. "These states should alleviate the ordeal of their citizens by cutting taxes on petroleum products when prices increase," he said.

OPEC chief and Kuwaiti Energy Minister Sheikh Ahmad Fahd al-Sabah also said "we will have many meetings and we will try" to seek tax cuts in consumer countries. "This is a financial issue of their own, but everyone should know that in Europe, 80 percent of the price (of oil) is made up of taxes," he told reporters. "They ask for an increase in production, and we ask for a cut in taxes ... which are one of the reasons for the hike in prices," he said.

<http://www.afp.com/english/news/stories/051119202636.s2lzzf9e.html>
(more at link above)

Mind your own beeswax. Europe doesn't want to use any more of your dirty oil products than it has to.

Let's see if I've got this right:

1) Global oil prices are too high because demand is outstripping supply.

2) Suppliers when asked to increase supply, suggest instead that taxes on their product be lowered thereby lowering the overall price of their product.

3) As the price moves lower on the supply-demand curve, demand increases.

4) Prices then return to being too high, demand still outstrips supply and tax revenues are reduced.

5) Price problem still exists, but now EU gov'ts have revenue shortfalls.

The real solution is to:

1) Get OPEC to raise production.
2) Spend the tax dollars on alternative fuels development.
3) Get the EU citizens to conserve in the meantime.

:eyes:

Doug D.
Orlando, FL

I don't believe they CAN raise production. They've been talking about it for along time - they keep saying they can do it - they keep saying their proven reserves are INCREASING...

I think world oil production has basically peaked.

The rate of production and the volume of reserves are not necessarily related. Raising production would just mean quicker depletion of reserves assuming that all reserves have been found and there is no more to be found.

There may be more oil to be found as well considering that much of the world is covered by water and most of that is currently beyond our technical capability to explore or drill.

That said, we need to be looking at renewable alternatives such as methanol fuel cell technology for vehicles, hybrid methanol fuel cell/electric battery cars that we can run on short term daily errands by recharging from nuclear reactors and on long trips by methanol fuel cells. They would be zero emission for daily trips and very low emissions for long road trips.

They would also free us from our dependence on foreign oil which is destroying this country financially and militarily.

This is the best option for drastically reducing greenhouse gas emissions in the United States.

Currently the U.S. derives only around 20% of it's electric power from nuclear energy while the rest of the G8 gets anywhere from 50 to 75% of their power from nukes.

Personally I would much rather have a bunch of electric cars and an electricity grid largely powered by nukes than the existing nightmare of coal fired plants that are spewing COx, NOx, SOx, ash, and heavy metals into the atmosphere in the thousands of tons a day.

Doug D.
Orlando, FL
(oh and Aerospace Engineer from Georgia Tech too.)

From BP Statistical Review 2004 - Nuclear energy consumption/electricity generation (in TWh):

France 448/572 = 78%
Germany 167/606 = 28%
Japan 286/1110 = 26%
UK 80/400 = 20%
USA 830/4150 = 20%
Canada 90/568 = 16%
Russia 143/931 = 15%
Italy 0/300 = 0%

So, you see only France uses nuclear power a lot more than the USA, and the USA's use is about average in the G8.

What is being called for here is a scheme to divert badly needed tax revenue into the already overstuffed wallets of the oil companies. Under this silly proposal, all an oil company has to do is turn up the price to get tax revenue, all "invisible" to the taxpayer, since the end price seems to be the same.

A far better idea would be either nationalization of oil companies, or at least regulation on their profits. That's what is customarily done with monopolies run amok, like private utilities.

If prices get too high, consumption will fall and
consumers will start looking seriously at alternatives.
OPEC is championing its own long term self interest,
not consumers.

That's a novel geological theory.

It's crude oil, natural gas and associated liquids, all of which are produced underground thousands of miles from the borders of any EU state through the power of tax cuts.

arabs could slap an export tax on euro shipments and maybe that's allright ----if europe taxes at 40% or whatever why shouldn't arab poppulations see some of that,,oh yea they wouldn't see it anyway,,duh

OPEC wants to see it's oil revenues rise as high as possible before the goose laying the golden egg (oil reserves) dies.

1) If Euro nations cut taxes, gasoline is temporarily cheaper. Petroleum comsumption rises.

2) As consumption rises, production ceiling is hit. Oil prices rise because of heightened demand.

3) Gasoline and other peteoleum prices reach new highs worldwise. But the cut of the prices that used to go to taxes, which could have been used to fund alternate energy projects, now goes into OPEC's pockets.

This is straight out of the Michael Milkin - Ken Lay school of short term market-cornering capitalism. Greed is good. For them.

think that if we save more oil - that that will mean ambulances will be able to save lives for more years? And police will be able to chase down bad guys?

When you don't produce something or have something in abundance it is smart to discourage it's use. The US is so backward it subsidizes people who even might be wasting it.

There needs be a revolt, a tax revolt, a hammer down and get the upside down tax structure going the correct way kind of revolt

Cut taxes so you can make more money. How Republican of you King Abdullah.

That must be why you held hands with Chimpy. Did he let you B F him also?

if you cut taxes, demand will go up. who's going to fill that gap? no one will be filling anything except the fat cat oil barrons bank accounts. if europe cut their taxes on oil, you can damn well bet prices would go up here due to the increased demand.

to dance in line and be the good little doggies they are. Because remember - China, India, and the rest of the 3rd World always could use that oil just as much as the Euros.