From energy guru Peter Fusaro:
In fact, it can be argued that the major oil companies are now in a liquidation phase of their existence. Their reserves-to-production ratio is declining, and they are now beginning to peak as they now produce and monetize their depletable assets. Investment in a new energy future is not being pursued by many energy companies yet. I see the energy companies, therefore, as the buyers of the new clean energy technology, not the innovators producing them.
Read the article here.
This entry was posted by Josh Friedlander
on Friday, February 29th, 2008 at and is filed under American Madness.
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March 4th, 2008 at
While I’m all for alternative energy, my favorite is nuclear, the reason energy companies are not investing in “clean energy” is that clean energy is by and large a joke. It often requires more energy input to create the “clean energy” than you ever get out of it. That’s not energy, that’s waste! I suggest that the “clean energy” boosters revisit the laws of thermodynamics in order to better understand capital allocation.
Further, the US government is cutting the tax breaks that used to be available for oil exploration, so there is less incentive to explore for new reserves. Interestingly, they are not cutting the tax breaks given to Venezuelan state Oil company Citgo.
http://www.ibdeditorials.com/IBDArticles.aspx?id=289181621989466
H.R. 5351 penalizes five large U.S. oil companies by taking away their 6 percent tax deduction (worth $18 Billion dollars) that encouraged them to explore for new oil. However, H.R. 5351 did NOT take away that 6 percent tax deduction for the Venezuelan oil company, Citgo, because that company buys its oil from Hugo Chavez’s vicious regime, which finances wonderful peace loving organizations like FARC. (They only commit mass executions on alternate Thursdays. It is not really genocide, because it is for a good cause!). (NYTimes)
So we are essentially financing our own demise by penalizing US oil companies and rewarding America hating dictators abroad. As you know, Chavez last year nationalized, that is, STOLE, $6 Billion dollars of U.S. assets in Venezuela owned by these same U.S. oil companies that the House is now penalizing. Of course, he is using these additional assets to finance his campaign to turn South America into a communist military camp from which he can attack the United States.
Chavez delivers a punch to the head and the Congress clobbers the oil companies with a left hook – Nice teamwork guys. I can’t wait until the Democrats take the White House.