7 Reasons nothing should stand in the way of the XL Pipeline

Discussion in 'Too Hot for Swamp Gas' started by g8orbill, Apr 25, 2014.

  1. mdgator05
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    mdgator05 Premium Member

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    In a theoretical sense, sure. In a real world sense, no way. These subsidies are not going to the pipeline company directly but to their consumers, who are large refining operations owned by even larger and more stable energy firms. So lets say that your super-volcano hits, closing down the BP refinery in Texas. You are saying that the tax incentive now becomes worthless. In fact, BP still gets that tax incentive, and they will just take it out of their other operations. The default risk for these firms is negligible (made even more so by the fact that closing these firms would likely be considered contrary to national security in addition to the too big to fail component). And since the tax break is over a series of years, even a bad year or a bad several years (ie. lets say we all stop using gas next year but go back to it in 2 years) would still not eliminate the tax credit.
  2. G8trGr8t
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    G8trGr8t Premium Member

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    this is about delaying or impeding the development of the tar sands. the rest is noise.

    the security of having a land based energy supply pipeline to an ally rich in resource is much better than counting on tankers to arrive from Nigeria or from Venezuela if/when ships are ever interrupted.
  3. wgbgator
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    wgbgator Sub-optimal Poster Premium Member

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    I thought all the oil from this pipeline was destined for the export market?
  4. G8trGr8t
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    G8trGr8t Premium Member

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    it is destined mostly for gulf coast refineries with some going to Midwest refineries. from there it will be refined, value added, and then sold as refined product generally on the open market.( diesel, jet fuel, gasoline, bunker oil, lots of different refined products)

    it will displace mostly Venezuelan but also some Saudi Sour and Mexican oil

    if/when the ME blows up or Venezuela falls apart or the overseas oil trade is somehow put in jeopardy by a madman with a fleet of drones, I seriously doubt the gulf coast refiners would be exporting any refined product while the US energy demand could not be met.
  5. G8trGr8t
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    G8trGr8t Premium Member

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    and a good percentage of the oil is being moved now but it is being moved by train. the pipeline is just decreasing the cost to transport, increasing the capacity of the midstream infrastructure (pipelines, tankers, rail, trucks) and transporting oil in a safer manner. decrease the cost to get it to the refinery and you should decrease the cost to the consumer. that $15 + per barrel in rail costs are passed on at the pump

    [​IMG]
  6. OklahomaGator
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    Usually the tax break is a result of some action by the company, for example, increasing jobs. For every job created you get a tax break of $200 for 5 years, where as a subsidy is when the government gives you money in the hope of something happening, like creating jobs. In Solyndra's case, the jobs were created until the subsidy ran out and the loan cant be repaid. So the net effect in the short run to the treasury is the same, in the long run tax breaks benefit the treasury because after the expiration of the tax break, there is more income to be taxed.
  7. wygator
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    wygator Well-Known Member

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    Here are some of the "gifts" I mentioned earlier. Solyndra's cost to us all was more than publicized:

    U.S. taxpayers think they lost around $535 million in the Solyndra federal loan guarantee by the Department of Energy. But, in fact, the loss could be as high as $849 million, more than 50 percent higher. After Solyndra went bankrupt in August of 2011, the U.S. department of Energy approved a deal to attract more private investment to the company. Part of the deal was that the private creditors could write-off more than $350 million in taxes, making the total loss to American taxpayers for Solyndra as much as $849 million. Further, one of these private creditors is a company owned by a major donor to President Obama.

    Here's the list of green loans at risk...upwards of $7 billion. These companies have either gone bankrupt, laid off workers, or are heading for bankruptcy. Keep in mind that these are federal only. There may have been additional state and local loans:

    *Denotes companies that have filed for bankruptcy.

    1. Evergreen Solar ($25 million)*
    2. SpectraWatt ($500,000)*
    3. Solyndra ($535 million)*
    4. Beacon Power ($43 million)*
    5. Nevada Geothermal ($98.5 million)
    6. SunPower ($1.2 billion)
    7. First Solar ($1.46 billion)
    8. Babcock and Brown ($178 million)
    9. EnerDel’s subsidiary Ener1 ($118.5 million)*
    10. Amonix ($5.9 million)
    11. Fisker Automotive ($529 million)
    12. Abound Solar ($400 million)*
    13. A123 Systems ($279 million)*
    14. Willard and Kelsey Solar Group ($700,981)*
    15. Johnson Controls ($299 million)
    16. Schneider Electric ($86 million)
    17. Brightsource ($1.6 billion)
    18. ECOtality ($126.2 million)
    19. Raser Technologies ($33 million)*
    20. Energy Conversion Devices ($13.3 million)*
    21. Mountain Plaza, Inc. ($2 million)*
    22. Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
    23. Range Fuels ($80 million)*
    24. Thompson River Power ($6.5 million)*
    25. Stirling Energy Systems ($7 million)*
    26. Azure Dynamics ($5.4 million)*
    27. GreenVolts ($500,000)
    28. Vestas ($50 million)
    29. LG Chem’s subsidiary Compact Power ($151 million)
    30. Nordic Windpower ($16 million)*
    31. Navistar ($39 million)
    32. Satcon ($3 million)*
    33. Konarka Technologies Inc. ($20 million)*
    34. Mascoma Corp. ($100 million)
    http://www.instituteforenergyresearch.org/2012/10/25/u-s-taxpayers-keep-losing-money-on-solyndra/

    • Informative Informative x 1
  8. 92gator
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    92gator Well-Known Member

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    Point taken. From WY's link:

    The Solyndra Debacle Gets Even Bigger

    After filing for bankruptcy in August of last year, Solyndra sold its manufacturing plant, fired around 1,000 employees and proved that its business model was not viable. But, according to the Internal Revenue Service (IRS), Solyndra still had real assets that the IRS refers to as “tax attributes,” totaling between $875 million and $975 million in net operating losses that can reduce future taxable income by as much as $350 million. Besides the ‘tax attributes’, Solyndra also had a total of $12 million in solar tax credits that can reduce tax liabilities by an equal dollar amount.

    The Department of Energy allowed private investors to capture these tax attributes and get first dibs in the case of bankruptcy in exchange for $75 million to keep Solyndra in business. According to a fair reading of the law, this deal was in violation because American taxpayers are supposed to get first dibs in recovering any losses from bankruptcy, should it occur. To break the rule, the Department of Energy produced a legal analysis claiming that this prohibition applies only when a loan originates, not when it is modified, as was the case with the Solyndra deal.[ii]

    The two main private creditors in this deal are Argonaut Ventures I LLC, the main investment vehicle for the George Kaiser Family Foundation—a major fund raiser for President Obama—and Madrone Partners LP, an investment fund associated with the family that controls Walmart.[iii] According to the Washington Post, the George Kaiser Family Foundation is a nonprofit that was created under a special tax law that allows the wealthy to park their assets tax-free.

    The deal between these 2 investors and the U.S. Department of Energy was made in February 2011 when DOE subordinated its repayment interests to these two companies. The companies in turn made the debt available to other investors for equity warrants, which would revert back to the Argonaut-Madrone holding company if Solyndra went under, giving the holding company 99.9 percent control of the net operating losses. Mr. Kaiser noted in September 2011, after Solyndra became defunct, that the holding company would merge with other Argonaut businesses that could use the tax break.

    Gosh, we wouldn't want those 'tax incentives' going to waste now, not after having pissed away only a few hundred million into Barry's to 'green energy' pipe dream....gotta' at least keep Barry's friends fat and happy! That's far more important than anything resembling fiscal responsibility.

    But yes, I stand humbly corrected--seems even in the case of loan subsidies, there is a way for this Administration to skirt the law, and see that even tax incentives intended to mitigate risk, can be prostituted to insulate the "1%"--you know....those filthy rich bastards that Barry always lashes out against publicly, and in the abstract...while coddling them and catering to their every desire, privately/behind the scenes, in the particulars.
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  9. harwil
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    harwil Premium Member

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    Except in the tax case, there must be a tax owed.If a company has a loan and loses money and pays no tax, there's no tax to rebate

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