Comments on: Oil and Tax Subsidies

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By: Harold Summers

Harold Summers — Mon, 07 Apr 2008 22:08:37 +0000

As an enthusiastic RVer, now retired, and as a former Fuel Distributor I have a view and an idea, that doesn’t seem to be included in any of the above, but first a single line of background.

In the 70s the Oil industry began a systematic process of buying small, then progressively larger refineries. They proceeded to shut them down over a few years time span. Sometimes they even bought a refinery and immediately began the close-down. I am convinced this was their long range method of controlling the retail price competition, which as we see now, was successful.

Solution? Redirect the tax breaks now enjoyed by the oil companies from one based on crude drilling to be based on breaks for building or expanding fuel production IN THE U.S. NO allowances (tax breaks) for imported Gasoline and Heating Oil (including Diesel fuel). Then allow the domestic companies to drill with minimal restrictions (keep the scenery clear by having an “out-of-sight” provision for new wells.

You might also be interested to learn that the prices we see skyrocketing daily are based on the spot market which means Buy Now and take immediate delivery. Most large users, and the oil companies, have long term contracts at much lower prices than we see in daily newspapers. They are less affected than the consumer for obvious reasons.

By: Gus DeBree

Gus DeBree — Sat, 05 Apr 2008 13:21:26 +0000

In a free market society profits are expected and encouraged. If we want to restrict corporate profits then we are no longer a capitalistic type society. The drug companies earn large profits along the same line as oil companies, should we start capping them? If we did that why not the RV Manufacturer, lets tell them what they should earn and when their pricing is considered gouging.
The truth of the matter is the government regulates oil companies in different ways that incurs cost unlike any other industry. ( Example: Oil company explorers a geographical area and believes they have found a oil deposit. They then have so many government studies, environmental impact plans and groups to deal with that the cost before they can drill and produce the 1st drop of oil is astronomical, if they are ever allowed to drill.) The Middle East controls the worlds oil because they find it, drill it and produce it without the restrictions we have in place. Then you add the state and federal taxes and you discover the cost of gas and diesel is gouged more by the government then by the industry.
The United States has issues, we have the oil, but afterward we have know way of refining it. We have not invested in a new refinery in over 30 years on U. S soil so a lot of our refining is being done overseas (Getting the oil out of the ground is useless if we can’t refine it). We have not built a new Nuclear Power plant since the 70’s even though it has been proven to be the safest power available, and of course nobody wants us to start drilling for oil anywhere in the U.S. or have a Nuclear Plant in “their back yard”
The answer in a lot of peoples minds is the great Ethanol, the renewable energy source grown from the earth. But the cost is to high, grain prices are through the roof Ethanol cost more to distill then gasoline and because the shortage in the market it has raised the price of grain so high milk is $4 a gallon and the cost of meat is skyrocketing. The plant devastation by some countries to produce Ethanol is creating more carbon dioxide then all the coal burning power plants in the world combined could create in 100 years. So once again the politicians have grasp a idea that winds up costing more then it is worth.
If you want cheaper fuel prices then you have to give up some of the thinking that corporations are bad and are the cause, you must realize that most of the problems arise from taxes and regulation.. This November when you vote, think of this message, that’s where the changes must take place. Use what we have and invest in ourselves.

By: Dick A

Dick A — Fri, 04 Apr 2008 04:56:09 +0000

Richard, I’m sure John Crean is rolling in his grave! LOL

Anyone who has read “The Wheel And I” would know that was not the way the company was originally founded, built, and operated.

However, it seems to be quite normal in the RV business. Look at what happened to chinook, Western RV, Beaver, etc.

By: Dick A

Dick A — Fri, 04 Apr 2008 04:37:35 +0000

My opinion (and that of a few others) is the current price of oil is no longer following the normal economic supply VS demand model. Rather…due to the current volatility of the real estate derivatives markets, investors are instead playing the commodities markets. Not just oil, but the grain markets, metals markets including silver and gold are all above historic market prices.

Now, the inflationary result of the above along with the presses currently running overtime printing devalued money to bail out the investment banks, is reducing the price of the dollar against other currencies thereby causing an additional rise in the price of oil.

Now, the Fed says all is in control but I’m not so sure. After spending hours and hours each day reading economic data, I’m beginning to wonder if anyone really knows how to control the current economic disaster.

On another note, I have been reading this forum for a year or so but just have not posted here before. I am retired, not employed in the RV industry, but I do volunteer my time in a RV related venue, own a Class A, and am an avid RV’er. Some may recognize my screen name.

By: Richard W May

Richard W May — Wed, 02 Apr 2008 05:36:18 +0000

In regards to subsidies and tax breaks for R.V. mfgers, there is one large producer in this country who should not receive any subsidies or tax breaks, this company closed 4 plants in this GOOD OL U.S.A. laid off hundreds of U.S. workers, opened up a plant in Mexico. this companys pay rate dropped 75 per cent, the average worker in mexico earns in an 8 hour day, about 1 hours wages paid to a U.S. employee. this company had to keep one of their service depts open in California to make repairs on the units produced in mexico. the mexican goverment will not allow units built in mexico, to return to mexico for repairs. this began with the model year 2008. this company does not pay the mexican labors any benefits. there are no U.S. regulations enforced in mexico. and you can bet this company had a price increase on the 2008 models. these facts came from employees of this company.

By: Barry Levy

Barry Levy — Tue, 01 Apr 2008 23:34:19 +0000

A couple of thoughts/questions:
1. It is my understanding that part of the increases is due to the oil shippments are being paid in EUROS.
2. To investigate: The gov’t “tax breaks” to the oil companies are for them to R&D alternative solutions to bulk oil. Not a bad concept.
3. It was beening found that approx 50% of the US public own stock in Oil Companies thru their Mutual Funds etc. Watch your retirement monies go down !
4.Drilling in Alaska….GO for it NOW! I have been there. This part of the country is flat tundra with a few Caribou and Lemmings (Mice). It is NOT the beautiful tree covered mountains and streams that you see in the travel books or shows. No one will ever miss it.
5.The whole world, including the oil rich countries, are going to Nuclear Energy. It will take us 8-10 years to build a plant, we better start now!

….Now back to work. Regards

By: dnelsen

dnelsen — Tue, 01 Apr 2008 22:47:09 +0000

Wow, I’m really enjoying this blog. Everyone has made some really great comments here. I think Brad spelled it out pretty clearly but there are so many issues that spin off this topic it’s crazy. Should we drill the Gulf and Alaska? That could potentially mean fewer nice places for RVs to go vacation. Those places are like savings accounts; the longer we don’t touch them the more they are worth. Should we have a gas guzzler tax? My thought is this would have a very negative impact on the industry we know and love. If Dana’s president, I veto that idea. Is how the system works price gouging? It’s hard to say but I know that the way it works now is essntially like an auction. (See Brad’s comments above)
One thing I would like to point out which didn’t even occur to me this morning when I started this blog (You will have to forgive me, we ran out of Folgers this morning) was the point about the value of our dollar. What our money is worth to other nations has an immense impact on the price of our oil and gasoline. Thank you so much for bringing that point up.

By: Mike Martinkus

Mike Martinkus — Tue, 01 Apr 2008 21:51:38 +0000

The answer, my friends, is not blowing in the wind.
The answer is Hydrogen. It’s not IF it’s WHEN. Hydrogen is the most volatile and the most plentiful element in the universe. It’s by-product from combustion is water.There will be growing pains to be sure but we are the folks who started a brand new country a couple hundred years ago and its now the most dominant country on the planet. Our ancestors put the “industry” in the industrial revolution and our fathers stopped the worst dictators the world has ever seen, in short order.
Our team can figure out the quickest, cheapest ways to manufacture, dispense and use the stuff better than anyone. The most logical medium for this sea change is the petroleum industry but they , at present, lack the motivation. They are taking in Billions in profit - so they can’t make themselves fix something that they don’t consider to be broken.The impetus will come from the great motivatior - Capitalism. When the demand exceeds the cost of development it will happen.

By: Bill Miller

Bill Miller — Tue, 01 Apr 2008 21:16:54 +0000

We are not talking a simple issue. The increase in petroleum use by developing nations, the holding of massive reserves by countries not known as our “friends’, the “friends” with their own agenda, environmental groups wanting to eliminate all drilling and refining, increased use within our country……and so on. The rest of the world has been attempting to get the U.S. to the world oil price for over 40 years. Weak politicians, greedy individuals, rogue nations, radical groups…..and so goes another list. The ability to use an RV and escape the craziness, if only for a day or two at a time, only strengthens my resolve that we live in the greatest place on earth. God Bless America !!!