Yep, $10 per barrel crude oil tax equals a failed energy policy and a direct attack on the U.S. energy industry. President Obama, desperate to leave a market on his legacy, is proposing a $10 a barrel oil tax that may force many U.S. oil companies out of business. Obama says the tax is for creating a fund that would focus on a more sustainable transportation system and green energy projects but in reality, it could be a death blow to the U.S. energy industry that is in a global fight for survival.
This is the President that worked tirelessly so that Iran could be allowed to export oil. He stood idly by as Saudi Arabia dumped cheap oil on our market. Now he wants to deal another blow to the U.S. oil industry. This is an industry that is facing some of the greatest challenges of a generation. Obama will kill job creation and try to throw money at untested, unprofitable green energy companies that can only create jobs if they get a government handout.
Obama must view oil companies as some type of a piggy bank that the government can tap at will. He loves to take crude oil from the U.S. shale revolution but he continues to try to kill it, especially with this ill-advised target tax. At the same time, he has fought the industry at every step of the way with his opposition to the Keystone pipeline, disallowing fracking on government lands. He used to say you can’t drill your way to energy independence and to prove he was not wrong, he wants to tax oil producers to make sure that it does not happen. So instead of the option of buying oil from U.S. producers, we will again look to Iran and Saudi Arabia to fill that void. Obama has taken sides in the oil war and the he stands with Saudi Arabia and Iran.
While I don’t think a $10.00 per barrel tax is advisable under any circumstance, why is the focus on U.S. oil companies. Why not give the U.S. producer an advantage? Why not target Iran or Saudi Arabia that is actively trying to dump oil in the U.S. to drive U.S. producers out of business. Why not tax Russian oil and everyone who buys Russian oil. At least that would give the appearance that you care about U.S. jobs and U.S. energy security.
The USA Today says, “The new oil tax would be phased in over five years, and would apply to both domestic and imported oil. It's different from a gas tax in that it will be paid for by the oil companies, not directly by consumers, and would also apply to jet and train fuel.
"This is a per-barrel fee on oil paid for by oil companies. So they're the ones paying the fee. We recognize that oil companies would likely pass on some of the cost," said White House economic adviser Jeff Zines.
We will be the ones that will be paying for it! Energy companies are losing money and laying people off the way things are now. Higher fuel costs and less economic activity will obviously be the result of a $10 tax that equals approximately 30% of what oil costs at this time.
Talk of natural gas talks with OPEC, Iran, Russia and Venezuela was played down by Russia. Dow Jones wrote that, "Russia's state-controlled gas giant Gazprom PAO doesn't plan a "price war" against U.S. exports of liquefied natural gas to its most lucrative market in Europe, a senior company official said Thursday. U.S. LNG suppliers will find it hard to compete in Europe with Russian gas prices under current market conditions, Gazprom's deputy chairman Alexander Medvedev said at an investor meeting in London. U.S. gas must be liquefied, shipped and turned back into gas, costing more than Russia's product, which is transported by pipeline. "There is no need for us to launch any price war," Mr. Medvedev told investors in London. "We are very relaxed about U.S. LNG, though very attentive." However, he added that if U.S. LNG prices did fall, Gazprom would seek to cut its own costs.”
The crude oil market will look at jobs today! Any weak number for jobs will be bearish dollar, bullish oil. Still it’s time to look beyond the glut! Put on long term strategy’s today.