Oil refiner CEO advocates for higher fuel taxes
In recent weeks, as the price of crude oil and refined gasoline have continued to decline from their summertime highs, an increasing number of people have been jumping on the gas tax bandwagon. Many analysts and pundits have come out in favor of a tax to keep fuel prices high and encourage the use of more efficient vehicles. Two segments however, have been notable by their silence: politicians and the oil industry. I wouldn't expect any spineless politician to actually come out in favor of taxing gasoline back up to $3.50-4.00 a gallon, after all the only thing they really care about is the next election. Even President-elect Obama is opposed to it. However, it was surprising to see Paul Foster, the chairman and CEO of El Paso-based Western Refining come out of the closet in an interview the other day. Foster, a self-avowed conservative Republican normally opposed to taxes, actually favors a gas tax of at least $2 a gallon. He agrees that the only way to get people out of gas guzzlers and reduce our oil imports is to keep fuel prices high enough to discourage its use.
Should it happen? Absolutely! Will it happen? Almost certainly not.
[Source: CNN Money]
Reader Comments (Page 1 of 2)
gorr 11:51AM (1/03/2009)
I said to keep fuel price down , up to 79Cents/gallon. This way we will see green technologies appear on the market. New technologies and cheap and non-polluting powered devises appear on the market when 'conditions' are good not when it's bad. Peoples don't observe what it's going on by themself, they are a mass of sheeps following collective hystery written in the 'news'. If gas is low then they think that everything is going well and will accept new products and new businessmans. If gas is high, then peoples will think that everything is going bad and will accept to burn their foods for some new 'energy', to kill themself and ruin themself in iraq and pay tax for studying batteries and give tax to everyone that is incompetant and worried to save the 100 years old auto-manufacturers.
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jeffzekas 7:16PM (1/03/2009)
My high school science teacher used to say, "Show me empirical evidence that your theory is correct!"... Okay, here it is: In Europe and the UK, there are high fuel taxes. They have cars that get better gas mileage than the US, they have developed alternate transportation (rail and bus) and they have built alternate electric supplies (nuclear, tide and wind). In the US, cheap fuel has meant: few if any alternate transportation systems and the death of existing rail and bus, few alternative fuels, bad gas mileage, and a dearth of changes or new technologies.
Don 6:02PM (1/03/2009)
You truly are a brain dead crackhead aren't you?
I hope you get banned from ABG.
Rei 12:07PM (1/03/2009)
Don't act so surprised. My father is the CEO of a different major refiner, and I've not only heard him extolling the virtues of the Prius, but he's actually helping me finance the purchase of my Aptera 2e electric car. He's basically an overgrown Boy Scout who likes to spend as much time in the outdoors as he can (he climed Mt. Kilimanjaro last year), and wants to see the best solutions for our environment succeed.
Oil executives are people, just like everyone else. They just happen to be in an industry that everyone hates. Their product isn't polluting because they want it to be; it's polluting because it is. But everyone keeps buying it, and as long as there's a demand, they'll keep producing it. The solution is not to attack the suppliers; it's to undercut demand.
Don't pity the "poor oil companies", mind you; not only are they essentially guaranteed to still have business for a long time to come (inertia slowing down the move from gasoline to electric, some types of oil usage, such as jet fuel, being very hard to phase out, etc), but they'll switch businesses as appropriate. They're already some of the biggest players in the wind and solar world, and I wouldn't be surprised in the least to see them become big geothermal players if EGS plays out.
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Rom 12:34PM (1/03/2009)
IT's not that the oil companies are poor. They are not. Remember back when the economy began to slump. Oil companies were the only companies reporting record increases; some in the billions of dollars per quarter.
To me, that only proves that they would gouge us when they can.. And they did.
It's not just the luxurious life styles that use gas. The average person in New York takes a taxi or buss to work. Those use gas too and would cost more if the tax become a ridiculous 4x the value of the gallon.
Trying to get more people to use less gas would require more economic vehicles on the market.
I was excited about the Volt until I found out it costs 1/4 the value of my house. We're not all as rich as the children of the CEOs requesting the bloated tax.
Rei 12:46PM (1/03/2009)
"IT's not that the oil companies are poor. They are not. Remember back when the economy began to slump. Oil companies were the only companies reporting record increases; some in the billions of dollars per quarter."
Actually, right now is a complete disaster for oil companies -- especially refiners. Up until recently, the crack spread on producing gasoline was *negative*. That means you *lose* money on every barrel you refine. It's just barely positive right now, but not positive enough to pay for amortizing capital costs. Back when oil was high, producers had high profits, but this was misleading; profits were high partially because of the high crude prices, but also because there were shortages of equipment that they could use to invest in new production. They couldn't spend the money on their future effectively.
Refiners that are tied to diversified companies that had money from the spike and didn't pump it all into jacked-up prices on projects to produce oil that's way too expensive to be profitable now should survive okay, but those without such parent companies are in serious risk of bankruptcy.
FYI, your average football coach of a major college would have to take a big pay cut to be your average major oil company president or CEO. You could probably count the US oil execs that do better than the football coaches of major US colleges on one hand.
Don 6:08PM (1/03/2009)
You're right, oil execs are also just people. But the fact is, oil majors have made huge efforts to eliminate, reduce or eliminate promising green technology from going mainstream over the last decades. It is the oil companies that have torn out the Southern Californian railway system, bought out alternative fuel companies and stopped their operations, bought numerous patents in hydrogen, battery tech to prevent their use, and the list goes on.
These people are ba$tards. They should be dropped off in a field and a bullet put through their head.
Rei 7:00PM (1/03/2009)
"But the fact is, oil majors have made huge efforts to eliminate, reduce or eliminate promising green technology from going mainstream over the last decades."
Let me tell you, my father hasn't done a damn thing to try and suppress anything. It's actually a source of running gags for us whenever I visit. "So, how was your day?" "Oh, the usual... killed the electric car, suppressed a 100mpg carburetor, payed off a few politicians, you know how it goes."
'It is the oil companies that have torn out the Southern Californian railway system"
That's "in the last couple decades"? First off, I think you mean to refer to the streetcars of several major cities, not just on the west coast, not the west coast railroads. The western railroads, like many big companies of the era, were corrupt, Machiavellian organizations that ruthlessly drove out all competition; the railroad industry out west was popularly known as "The Octopus" and controlled everything from trains to ferries to stagecoaches. They used sabotage, blockades, and all sorts of tactics that at times were so hated that they led to armed uprisings. Check out the article on Wikipedia, "California and the railroads" for a brief primer.
The trolley situation, however, was different, and occurred in the 1930s and 1940s. The trolley systems were dismantled partly due to pressure not from one company, but from a consortium of General Motors, Firestone Tire, Standard Oil, Phillips Petroleum, Mack, and Federal Engineering Corporation. The ultimate outcome of the case was that the defendants were acquitted of trying to monopolize transportation services, but were convicted of trying to monopolize the provision of parts and supplies. The idea off the purchases came from National City Lines, who had the goal of acquiring city lines that had declining profitability due to the rise of the automobile and replacing them with passenger busses. To raise money for their plans, they got money from companies whose products they planned to use.
Honestly, though -- do you have anything better than a case from the era when American was still trying to drive out the last of the great Robber Barons and plutocrats?
"bought out alternative fuel companies and stopped their operations"
What are you talking about? Shell, the company my father used to be a president of before he took his current job, *started* several alternative fuel businesses. What alternative fuel businesses are you picturing that were bought out and shut down?
"bought numerous patents in hydrogen"
The oil industry *loves* hydrogen as a fuel because they already are the ones who make the stuff. I find it amazing that if the oil industry invests in green tech, they're trying to repress it, but if they don't, it's because they hate it and don't want it to succeed. Ever checked who makes solar cells, by the way? Or who the big investors in wind farms are? Oh, but they must be trying to repress those techs, too! Such a clever way -- repressing technology by researching it and producing it in massive scale.
"battery tech to prevent their use"
Let me guess: you have precisely *one* example here -- the Chevron/Ovonics case. Riddle me this: who are these mythical buyers out there who are demanding large volumes of large format NiMH cells? Cobasys has repeatedly stated it would be willing to license large-format cells *if desired in volume*, but that it has no interest in low volume production. And, FYI, the patents only apply to US sales. So if they're in such demand, why aren't we seeing large format cells being used in other countries where the patents don't apply? And if they're out to repress the tech, why is Cobasys a major licenser *and producer* of NiMH hybrid packs (which *are* in demand, I might add)? Is their evil plot to make cars more efficient, but only to a degree?
And lastly, the whole situation was just ridiculous. GM wanted to kill off the EV-1. They wanted nothing to do with electric cars. Even before they got the mandate overturned, they sold off its battery rights. If they really cared about NiMH rights, would they have done that? Of course not. And not just that -- they shut down the factories and in general destroyed the entire EV-1 program, not just the rights to the pack. Concerning Toyota: PEVE was blatantly violating the Ovonics patents by producing large-cell NiMH packs for sale in the US. Cobasys sued. Cobasys won. How exactly does that make them the bad guys, when PEVE was violating their IP rights with no compensation? They were badly burned in the legal battle, too; it's no shock that they were hesitant to re-enter the large-format market and instead focused on small format. FYI, in the settlement, in the past couple years, Cobasys agreed to a patent rights cross-licensing with PEVE. PEVE now has the rights to produce large-format NiMH cells for sale in the US. Guess what? They're not doing it. NiMH is old tech, and nobody wants it for EVs; everyone wants li-ion. NiMH is 50-60wh/kg. Li-ion is 100-180Wh/kg. NiMH 60-85% efficient; li-ion 90-99% efficient. NiMH is somewhat toxic. The advanced li-ions are nontoxic. NiMH has an order of magnitude less power per kilogram than the advanced li-ions, and is good for fewer cycles. And on and on down the line. Where exactly are the people who are supposed to be lining up for this tech?
Or you can insert conspiracies around every corner and turn a couple anecdotal cases into a mythos where oil executives meet daily to plot how to best create Evil and destroy the world. Your call.
Even if the US goes hardcore toward EVs, full tilt, the world is going to be dependant on oil to a major degree for the next couple decades due to the inertia behind our oil infrastructure. It'll take ages to phase out existing cars and trucks, even with a most diligent effort (let alone much bigger challenges, such as aircraft). It's simply not a threat to them. The change is going to be slow enough that they can put money into EV tech just as readily as they can put money into new oil infrastructure to replace aging fields, pipelines, and refinery hardware.
But, of course, if they do that, then people like you will just assume that it's part of an evil plot to kill off the technology, right?
jeffzekas 7:23PM (1/03/2009)
My high school science teacher used to say, "Show me empirical evidence that your theory is correct!"... Okay, here it is: In Europe and the UK, there are high fuel taxes. They have cars that get better gas mileage than the US, they have developed alternate transportation (rail and bus) and they have built alternate electric supplies (nuclear, tide and wind). In the US, cheap fuel has meant: few if any alternate transportation systems and the death of existing rail and bus, few alternative fuels, bad gas mileage, and a dearth of changes or new technologies.
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Mike Z. 4:21PM (1/03/2009)
Show me empirical evidence that it costs the same for people to get from point A to point B in Europe with these higher mileage cars/alternative transport methods.
jeffzekas 7:24PM (1/03/2009)
There is a "social cost" for using gasoline, i.e. air pollution, ground water pollution (near refineries and oil fields), destruction of wilderness areas, which is NOT figured into the dollar cost at the pump. Also, oil is a FINITE resource, i.e. it will most likely run-out within the next 50 years. Other sources of energy i.e. solar and wind are INFINITE i.e. they are without end. Thus, irregardless of the "dollar cost", the true cost of oil is 1. dependence on hostile Arab countries 2. our dollar funding, indirectly, terrorism attacks, both upon us and on our allies 3. being tied to a source of energy (oil) that will run out within OUR lifetime, leaving us with no more time or no other alternatives, should we sit on our hands. So, whether or not petrol and transportation costs are "the same" in Europe as in the US is IRRELEVANT, since we cannot allow our transportation system to collapse, which will occur, when (not "if") the oil is depleted.
Carney 1:32PM (1/05/2009)
Many flaws in your claims.
First, as a glance at a night time satellite map will show, Europe is far more densely populated and urban than the United States, with its wide open spaces. That makes mass transit, and even intercity rail, much more economically viable there, and parking and housing space scarce.
Second, rather than achieving breakthroughs in fuel efficiency technology, the Europeans get better gas mileage just by driving cars that are more tiny, under-powered, and frail. This is not particularly desirable, especially for a people that likes elbow room, powerful motors, and bigger families moving in safety.
Third, mass transit and urban life are associated in America with decay, crime, and "diversity", whereas that has not been the case in an until recently non "diverse" Europe. Despite lectures and various incentives, majority Americans continue to resist living in locations and taking transportation modes where they are a minority and feel unsafe. I suspect that with the massive demographic changes in Europe due to immigration, and the resulting predictable trends in social statistics, we will soon see, if we have not already, a shift in residency and transportation patterns from Europeans who heretofore enjoyed smugly lecturing Americans on such matters.
Fourth, while some European countries, especially France, have made commendable strides in using nuclear power, many others, including Germany and especially in Eastern Europe, still use old fashioned coal for their electricity. Furthermore those few European nations that are rich in oil, such as Norway, don't seem to be averse to its exploitation and use. If Europe were as rich in oil and natural gas as America, then your praise of that continent would be better justified. As it is, they are pathetically dependent on Russia for their natural gas, distorting their foreign policy.
Fifth, as for innovation, it was not Europe but the United States (specifically Ford in the 1980s) which invented Flex Fuel technology, the most practical, affordable, and promising path forward away from gasoline for transporation purposes.
Finally, cheap fuel is not a vice and expensive fuel is not a virtue. What matters is WHAT fuel you use. Alcohol fuels do not fund Islamism, narco-Marxism, or Russia, and are far better for the environment.
They are not mutagens or carcinogens. They do not persist environmentally, and instead readily biodegrade within a day if not hours into safe components, making leaks and spills non-catastrophic. They produce far less ozone smog and acid rain. Burning ethanol and plant-derived methanol adds no net CO2, and cultivating the crops and plants that produces them promotes global cooling. And they burn cleanly without smoke, soot, or particulate emissions.
In that case, who cares how big, brawny, and fuel guzzling an alcohol burning vehicle is? Greens shouldn't.
gorr 2:21PM (1/03/2009)
I said to put gas at 79cents/gallon, to let green algae fuel and foods hit the market, to stop subsidies and tax on everything, to stop war in iraq, to stop reguling small new business that want to put on the market a water powered car, truck, airplane, ship, u.f.o.
I said that this site serve to block new players not tied to high-financial banking-internet to enter the market because it's been set-up that way, help petrol and sell inneficient batteries and especially deceive the only competing product, hydrogen, to replace petrol.
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Chris M 1:15AM (1/04/2009)
Sorry, Gorr, but most of the folks here are working on reality based solutions to our problems, and we are not interested in importing solutions from La La Land.
jharlan 8:03PM (1/03/2009)
Her is another elitest do gooder that thinks we working poor should be using mass transit only, and autos should be reserved for the affluent. You guys who already know everything should be working on stimulating the economy, so demand will get fuel prices back up to your $4 target, not figuring out a way to tax the poor to bail out the rich!
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JDred 10:41PM (1/03/2009)
"Conservative Republican" my A**! More like another RINO.
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Richard in FLA 1:22PM (1/04/2009)
This concept isn't about elitists, it's about making alternative solutions attractive. As long as the price of gasoline is cheap, no one is going to seek a more efficient vehicle. There just isn't an incentive to do so. Selfish people want the price of gasoline to remain the same so that they don't have to change their way of life. I beg you to find a car that get 50mpg. OH there are a couple of models. And they are selling, but go to Europe, and they are all over the place. That's because people demand them, and that's because the price of gasoline is so high. Economics 101. If your new car consumes half the gasoline your old one did, you have effectively cut your cost in half. In real terms it's like cutting your cost of gasoline from $4.00/gallon to $2.00.
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Carney 10:58AM (1/05/2009)
Without a flex fuel mandate it's completely impractical, and will destroy the auto industry since Americans WANT big, roomy, powerful vehicles and will just buy used or wait for change rather than cram themselves, their stuff, and their lives into weeny little eco-euro toys.
However, with a flex fuel mandate it's a whole different ballgame. With every new car sold in America able to burn not just gasoline but also methanol, ethanol, etc., we'd have 50 million alcohol-capable cars on the road in 3 years.
Since methanol is much cheaper than gasoline, and ethanol can be if we drop our tarriffs on Brazilian ethanol, there's already a price differential pushing people away from gasoline and toward alcohol anyway.
But a gas tax would help push drivers of older vehicles to getting a new alcohol capable one, and would also be insurance against OPEC efforts to undermine the switch to an alcohol economy by temporarily ramping up production to collapse the price of oil just long enough to bankrupt alcohol fuel businesses.
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gorr 11:29AM (1/05/2009)
@ REI
What you say is untrue, false, innept, out-od-date, useless.
What oil refiners can do and all others chemmys guys too is to do green algae farming with the output ( co2 ) of the numerous chimmys they own. It can transform the polutants back to useful green algae, then this algae serve as fuel later-on and goes back as fuel to replace coal for coal-fired plants or serve as biodiesel and butanol to replace cruse oil in refineries. That way polluters can cut 70% of pollution and save on feedstock, coal and crude oil.
But wait, it's been out-lawed by goverments because it will cut crude oil trading and cut coal trading, that's all. It will cut pollution too and 2000 or more madscientists like al gore work in pollution control and if they cut pollution then they will be out of jobs. That's why no green farming is done commercially in u.s.a with the numerous oil refineries and coal plant smoke-stacks. All of these business can cut their operational costs and pollution with green algae farming.
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Rick 4:40PM (1/05/2009)
I'm in the 'that's retarded' camp. Gas prices at $4 is what perpetuated the current recession. It made local schools change schedules to limit the number of buses running forcing frenzied parents to change their schedules and work habits. It made those school cut their budgets, teachers on payroll and after school activities. It forced truckers into debt, bankruptcy, it forced people to spend less on other items. It forced food and energy prices to increase to levels that forced a lot of households to skip a bill or two dropping further into debt, and some to end up on the streets because their house was foreclosed.
We are in this mess BECAUSE gas prices went to $4, why would any person with common sense want to take this country back there!?!?
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