Government Bailout of Oil Industry

[Daisy Williams + 1]

On 3/9/2020 at 2:26 PM, Gerry Maddoux said:

Trump doesn't much care for the oil business. In fact, in his head, the Dow-Jones has always moved inversely to the price of oil. Today he is seeing for the first time as president that that isn't always true. He should immediately impose 25% tariffs on ME oil and call up Venezuela and Canada and tell them we're buying their heavy oil. But I don't think he has anyone in his cabinet who really understands just how bad this could get for the country.

Well if you think he doesn't understand...pray a Joe Biden doesn't elected...Mr " No more fossil fuels". 

I agree, Trump needs a more sense of urgency towards oil and gas industry but if he does too much in that direction before medical and safety issues are completed the media will eat him alive. Imo.

[Douglas Buckland + 6,308]

4 hours ago, Boat said:

One of Obama’s success stories is little mentioned. He loaned Elon Musk 400 million to support the electric car. That money was paid back with interest. Around 20 million. The result? Jobs and a new company that will provide cleaner transportation. Trucks, semis and a cheaper car for the masses on the way. It will be interesting to see in 10 years the impact of that 400 million.

Hasn’t worked that way so far, and at oil  approaching $20/bbl I doubt we will see a huge demand for EV’s.

So Obama made $20 million on the Tesla play, how much did he give to Iran with nothing to show for it?

Edited March 18, 2020 by Douglas Buckland
Typo

[SERWIN + 749]

9 hours ago, Boat said:

You need to google those bailouts. The vast majority of the money was paid back with interest. The same type of action may be needed for many industries. With this virus the isolation period may be just a few months. While disruptive, not a long term problem. 
They describe actions like that “filling the economic hole” until the economy can restart.

Actually, we lost billions on the GM bailout, the shares that we had as collateral were sold off at a ridiculous low price and if I remember correctly we actually lost about ten billion on that deal alone. But I reiterate, these publicly traded corporations need to have the reigns tightened up, the CEO's and board of directors should have minimum standards in regards to performance. GM had several problems, one of which was the fact that they started Saturn, a "pet " project of the CEO at the time, and after 3-4 years it should have been aborted, but instead it became a money pit that he kept pushing along in his vain attempt to make it work. He got to collect a ridiculous paycheck for how many decades, and he walks away with zero liability for his poor choices. Look at GE right now, the CEO that caused all the major troubles walks away with absolutely no liability for his mismanagement of that meglo-corporation. They should have dumped that credit organization way before they did, it lost a lot of money for them and created lasting financial problems. And who suffers the losses? The shareholders do again...

[Ward Smith + 6,615]

World Oil just launched a survey about tariffs

Clear trend says yes, institute a tariff

[Boat + 1,315]

8 hours ago, SERWIN said:

Actually, we lost billions on the GM bailout, the shares that we had as collateral were sold off at a ridiculous low price and if I remember correctly we actually lost about ten billion on that deal alone. But I reiterate, these publicly traded corporations need to have the reigns tightened up, the CEO's and board of directors should have minimum standards in regards to performance. GM had several problems, one of which was the fact that they started Saturn, a "pet " project of the CEO at the time, and after 3-4 years it should have been aborted, but instead it became a money pit that he kept pushing along in his vain attempt to make it work. He got to collect a ridiculous paycheck for how many decades, and he walks away with zero liability for his poor choices. Look at GE right now, the CEO that caused all the major troubles walks away with absolutely no liability for his mismanagement of that meglo-corporation. They should have dumped that credit organization way before they did, it lost a lot of money for them and created lasting financial problems. And who suffers the losses? The shareholders do again...

Instead of cherry picking individual companies let’s look at the bailout as a whole.

https://projects.propublica.org/bailout/

To date while there is still money owed the US government came out ahead 121 billion. 
 

So recent history shows helping companies survive crisis level economic conditions isn’t nearly as risky as many would lead you to believe. 

[surrept33 + 609]

14 hours ago, Daisy Williams said:

Well if you think he doesn't understand...pray a Joe Biden doesn't elected...Mr " No more fossil fuels". 

I agree, Trump needs a more sense of urgency towards oil and gas industry but if he does too much in that direction before medical and safety issues are completed the media will eat him alive. Imo.

I'm pretty sure Biden would only prevent oil/gas development (and fracking) on public lands (which are pretty marginal plays economically at this point anyways).

This is pretty consistent with the Obama administration.

[canadas canadas + 136]

The U.S. should get crude oil from its domestic supply first in order to support its domestic producers, especially shale crude oil.

Of the 284.3 million barrels of oil the United States imported in December last year, according to the Energy Information Administration (EIA), the United States imported an average of 43.7 million barrels of oil from OPEC nations (14.5 million of which came from Saudi Arabia), and 21.5 million barrels from Russia.

[ronwagn + 6,290]

20 hours ago, Boat said:

One of Obama’s success stories is little mentioned. He loaned Elon Musk 400 million to support the electric car. That money was paid back with interest. Around 20 million. The result? Jobs and a new company that will provide cleaner transportation. Trucks, semis and a cheaper car for the masses on the way. It will be interesting to see in 10 years the impact of that 400 million.

OK, but how does that weigh against the failures? I have heard a lot about them, Solyndra was a big one that comes to mind. 

[ronwagn + 6,290]

On 3/16/2020 at 7:26 PM, Boat said:

I think N America should set the price of oil at $55 and block all imports outside the Continent or make some kind of arrangement for “other” imported oil. Maybe price fixing for food stuffs and other essentials would protect the consumer and the producer while the virus disrupts the market. Time to act outside the box a bit.

I can't imagine a likely scenario where food prices would need to be fixed. I think that should be avoided in all but severe abuse. People need to shop like they did in the fifties and sixties. Buy the basics and make your own food. Don't shop just for prepared foods. 

[ronwagn + 6,290]

21 hours ago, Boat said:

The US uses very little oil from the rest of the world. The US also has very cheap nat gas to refine oil. The costs disadvantage comes from fracking which is a higher cost than conventional drilling.

What I was saying is that we do not need imports, and need to tariff them. 

[0R0 + 6,251]

Price fixing is a stupid idea.

Tariffs are a good idea if you eliminate other sources of Federal government revenue like payroll taxes and income taxes.Up until the start of the 20th century, only tariff and excise taxes were allowed for the Federal government. That should be re-established. No taxes on income nor property. 

 

[George8944 + 128]

On 3/17/2020 at 2:47 PM, SERWIN said:

And my question is this, publicly traded companies managed SO POORLY that we had to bail them out, yet no one on trial for such pathetic mismanagement of the companies money, they all walked away free, most with bonuses to boot.

First I agree there should some negative compensation to management before a bailout is given.  Companies are managed poorly for the same reason the US Congress is over paid for their under performance.  Voter apathy.   This apathy impacts how our leaders represent us and how C-level managers react to share holders.   I can't speak for the rest of the world, but here in the US both the shareholder and citizen has a tremendous amount of power.  We've been duped into believing we don't, and it's useless to even try.

My other thought on poor management is they don't have enough "skin in the game".   I like buying small to midsize companies and watch them grow.  One rock solid metric that I use is how much stock does management own compared to what's outstanding for other share holders.   If management owns  10% or 15% or more, you can be fairly confident their fiscal interests are aligned with yours.

I have a strong disdain for govermental interference of any kind.  I would rather see share holders rise up and demand corporate change instead of government oversight.  Being paid a bonus isn't a bad thing in and of itself.  It's about a 1/3 of my compensation package!

[BLA + 1,666]

On 3/9/2020 at 4:15 PM, Tomasz said:

US economy absolutely need to be energy independent and I fully support that.

 A global superpower cannot import some 10 million barrels a day because it threat for national security and  good reason for many bloody interventions all over the world after WW2..

This does not mean however, that it must produce oil and gas at a loss or with very little profit like crazy at quite low price with an increase of 2 million barrels as in 2018 alone.

I am absolutely in favor of the US producing more and more of oil and gas - I really don't mind.

Only dear US colleagues with all respect you should increase your oil and gas production at a reasonable pace and not flood oil ad gas  and destroy the whole energy market by producing it with very little profit  or even a loss

If only because it is still really unknown for exacly how many years, with such a crazy increase you have enough resources

I may be wrong, but this is probably the unofficial  position of Russia and Saudi Arabia for last decade and they are simple desperate because of shale madness 

I will quote Anas Alhajji from Saudi Arabia working both at US mining university and also for Saudi Aramco

 

Look whose calling whom a FAT CHILD.  

Saudis need to take a look in the mirror.  THE SALMAN BROTHERS (MBS , ABS) NEED TO GO ON A DIET.  

 

MBS throws a childish temper tantrum when he doesn't get his way .  He has never been told No.

Saudis happily sold oil to U.S. at $120. bbl which cost them $1.50 to get out of the ground.  A Saudi oil minister once told a press conference when oil was selling at over $100 bbl with a big grin on his face that oil was going to $200 bbl

Another time an oil minister said to a news camera, " I think $100 bbl is a fair price.  We need a $100 bbl to run our social programs" Oh, I'm sorry.  I forgot your 18,000 princes need to buy a new Lamborghini using your social programs. 

MBS doesn't like what a journalist writes about him so he sends his thugs to butcher him while he visits a consulate in Turkey to get his marriage authorized. 

Aramco can't even run its own operations .  They need expats to run their oil production and refinery operations.

 

It's time for all the fat puggy man-childs in the ME to grow up and learn how to compete in the real world.  Learn how free markets operate.  

While your at it take a serious look at your budgets.  Get used to the new norm. Put plans for futuristic cities like NEOM with flying cars away.  What was MBS high on when he framed up his flying car fantasy.  MBS is 34 years young and acts like a 10 year old.

The oil industry is dying.  Get it while you can.  The world still uses close to 100 mm bbls/day.   Take your 10 mm exports.  

It was good while you could get it. 

 

will quote Anas Alhajji from Saudi Arabia working both at US mining university and also for Saudi Aramco

  Quote

The situation of #shale is pretty simple: It got too fat in childhood. It needs to get in shape to live a longer healthy life. It has to go on severe diet, which includes capital starvation. The oil majors are the adults who intervened to get this child in shape!

Edited March 19, 2020 by BLA

[Douglas Buckland + 6,308]

10 hours ago, ronwagn said:

What I was saying is that we do not need imports, and need to tariff them. 

We don’t need imports...NOW! What if the shale oil miracle fails - as it looks to be doing BEFORE the Russian/Saudi pissing contest?

Edited March 19, 2020 by Douglas Buckland
Typo

[ronwagn + 6,290]

3 hours ago, Douglas Buckland said:

We don’t need imports...NOW! What if the shale oil miracle fails - as it looks to be doing BEFORE the Russian/Saudi pissing contest?

Impose tariffs on all but Canada. 

[BLA + 1,666]

20 hours ago, surrept33 said:

I'm pretty sure Biden would only prevent oil/gas development (and fracking) on public lands (which are pretty marginal plays economically at this point anyways).

This is pretty consistent with the Obama administration.

Large part of Delaware Basin is on public land. The hottest Permian property.

Powder River Basin , Wyoming has huge potential yet to be tapped.  Most on Public land.

Edited March 19, 2020 by BLA

[SERWIN + 749]

17 hours ago, surrept33 said:

I'm pretty sure Biden would only prevent oil/gas development (and fracking) on public lands (which are pretty marginal plays economically at this point anyways).

This is pretty consistent with the Obama administration.

The last thing we need is another carbon copy of the Obumba administration, and I am assured that Biden would be another 8 years of screwing the average American over while kissing crap hole countries like China's ass again. As long as they keep the under table funding going for the dumbassrats(demonrats, etc.) it will be back to "business before Trump" in no time, and you can be assured the "Clinton Foundation" would be getting a lot of "donations" again. God only knows we don't want that either. The richer those two thieves get the more power hungry they become..... I personally can't wait for his birth certificate to be released, then we can put his ass on trial for treason and do away with all the dumb crap he did while in office... All we really need is for Ginsburg to retire and get another staunch conservative on the SC, and I do believe we can actually get that to happen.

[ronwagn + 6,290]

2 hours ago, BLA said:

Large part of Delaware is on public land. 

Powder River , Wyoming has huge potential.  Most on Public land.

Biden has already said he wants no more drilling on public land. He basically will oppose fossil fuels to a large extent. 

[SERWIN + 749]

On 3/17/2020 at 1:05 PM, canadas canadas said:

Neoliberalism is about government bailouts of companies,  It's like socializing losses and privatizing gains.  Socialism for the rich and capitalism for the poor.  The government has money available for whatever it wants.  It just depends on what the want is.  

I also forgot to mention the stadiums we help pat for in the cities with sports teams. I actually get taxed on my property taxes to help pay for that crap. Wholly and entirely unfair if you ask me, those guys that own sports teams are billionaires, why should we have the exorbitant cost of a stadium that is pretty much useless for any thing else on our tax rolls. More welfare for billionaires, Jus' sayin

[Dan Clemmensen + 1,011]

On 3/19/2020 at 7:37 AM, ronwagn said:

Impose tariffs on all but Canada. 

A week ago I thought a tariff was the best idea. I now think an actual embargo is needed, to protect our storage resources from being overloaded. When all of the storage fills up, producers have no choice except to stop producing, and the world's storage is projected to fill up in a few months. The embargo would give US producers a small window to plan and implement an orderly partial shutdown to match supply to demand. The price of oil will go to zero or negative when storage fills up, so a disorderly shutdown will cause chaos. An orderly partial shutdown could be coupled with a ban on flaring and venting, since the industry needs some way to decide which wells to stop using anyway.

[George8944 + 128]

I read several good ideas here.   How many of you ( ok. us ),  wrote their representative?  (I didn't.)   About 15 years ago I had a friend who worked directly for my Congressman in Washington.   I asked if the letters are actually read.  She said, they are read and categorized by general topic.  Now for the best part.   For every letter received they believe there are 200 other people in the district that hold the same opinion.  Now I'm sure they adjust the metric for some precanned postcard mailer some groups ask you to send,  but my point is our actions are leveraged.  Use your right to let your voice be known before it is taken away.

[John Foote + 1,135]

On 3/18/2020 at 3:13 AM, Douglas Buckland said:

So Obama made $20 million on the Tesla play, how much did he give to Iran with nothing to show for it?

Iran was by all accounts less than 6 months from nuclear devices. They had enough enriched material.

At a minimum, the bad deal made bought the rest of the world years.

I don't think it was a good deal, but was better than no deal? Probably so, and it allowed for boots on the ground to monitor.

A cynic would say the best we could have done was make the deal and then back out after we got our hands on the enriched materials, which is essentially what we did. 

Corona is whacking Iran. Google earth photos of mass graves. You want to know what happens if you do nothing and have little medical resources, Iran is the first case study. Getting the data will be all but impossible because they won't have good data, and will fudge what they do have, but they can't hide the basic impact.

It doesn't get western press, but in KSA they have banned going to the Mosque for the five daily prayers. That is huge.

[George8944 + 128]

This article isn't about the oil industry,  but the cruise lines.   I found it interesting and thought maybe you would too.   The closest I come to supporting bailouts is paying unemployment to those that lost their jobs.

https://www.zerohedge.com/geopolitical/economics-cruise-ships

This was interesting too.    Boeing's problems started before Covid-19.   Working for free is a nice gesture, but too little in my book.  I would say fire him, but then the golden parachutes open.  I think working for free to fix the problem is a good first step.

https://www.zerohedge.com/markets/boeing-suspends-buybacks-and-dividends-ceo-will-work-free-until-end-year

[Gerry Maddoux + 3,627]

^

Boeing has always been a boom or bust, balls to the wall, grab it while you can company. When I was looking at an internship in 1972, there was a huge billboard on the hill, saying "Would the last person to leave Seattle please turn out the lights." No kidding. 

My taxi driver was a double PhD in Aeronautical Engineering and Physics. It was not a pretty picture back then either. But a series of good planes followed. Seattle was highly unionized and I could never figure out why they didn't move to Texas, rather than Chicago (nothing against Chicago). They would have fit in well with NASA. 

Anyway, to be honest about it, Boeing is "America's airplane builder." It is too big to fail. We have no recourse but to somehow bail it out. But we should not do so with any moralistic idea that they have learned a damn thing from this. 

[James Regan + 1,776]

White flag being made or Broken Arrow?