Standing for a Carbon Tax. The Chronicle Editorial Board, HoustonChronicle.com ($$$)
Rarely do companies ask to be taxed. But when the Houston Chronicle editorial board met with representatives from Exxon Mobil Corp. this week, we heard loud and clear their support for an across-the-board tax on carbon emissions.
There are two reasons oil and gas companies have decided that they prefer a tax to Al Gore's "carbon credit" scheme.
1. A tax is easily budgeted, and it makes cost/benefit analysis of future projects much easier to make decisions on.
2. A tax is easily passed on to the consumer, other working interest owners and even federal, state and private royalty owners leaving the companies with very little financial exposure at all.
What the US Government does with the tax? These companies don't care. But this is the funding mechanism for the give-away by Western, developed, countries to developing economies in order to help them 'cope'. India has already estimated it is going to need Trillions of dollars to ensure that it's emerging economy can provide power and water to the citizens it has been ignoring for decades now.
Here's the rub: The people making policy recommendations at the oil and gas companies are smarter than the people in politics or the media, by far. They understand that there will be ramifications to having to pay said tax, to the American economy especially, but they also know that their diversification world wide will blunt that. Companies operating in Africa and the Middle East may actually benefit from the largesse America is poised to throw at developing nations while only suffering a hit for a small fraction of the tax.
The biggest problem, right now, is that the free market of ideas is being strangled by the yoke of government regulation and subsidy preventing people from finding unique solutions to ease the transition from hydrocarbons. Of course, we'll never live in a hydrocarbon free world. For one thing, all of the plastics and other materials that make life easier are derived from crude oil and there will always be a market for heating homes with relatively clean-burning natural gas.
Where there could be advances, and should be advances, is in nuclear power and hydrogen fuel cells to power transportation, as well as Liquefied Natural Gas.
But, you're not seeing that because our politicians have been sold a Hybrid/Electric bill-of-goods which has led most subsidy money to go toward plug-in cars whose root source of energy is mainly coal.
So, America is going to pay, a LOT, developing countries to "assist" them with getting green. In reality we're going to subsidize the growth of Countries in direct competition with our economy in a self-defeating exercise.
This doesn't mean that I'm an isolationist, far from it. In fact, I am typically on the side of free trade and believe that the growth of the global economy is a rising tide that raises all ships. But what I don't believe in is paying other people to compete with you which is effectively what the developed countries are offering here.
If you want to have privilege guilt do it on your dime, not on mine.
As for the Chronicle Editorial Board, it's amazing to me that less than a week after bemoaning the negative consequences of the current oil slump to Houston, they are immediately back on their high-horse calling for the dissolution of that same industry. If anything in Houston needs to go it's them, not the biggest employer in the region.
