Back in 2006, that is...
The IEA is an independent, multi-government agency formed out of the wake of the 1973 oil crisis. It forecasts oil production, monitors the international oil market and other energy sectors.
Only five years ago it confidently stated that oil production was set to rise to 120 million barrels a day by 2030.
But IEA chief economist Fatih Birol says the world's crude oil production peaked in 2006.
He says oil prices are likely to rise 30 per cent over the next three years.
"The existing fields are declining so sharply that in order to stay where we are in terms of production levels in the next 25 years, we have to find and develop four new Saudi Arabias," he said.
Oil Companies have seen the writing on the wall. They've got to squeeze out their record profits for the next couple of decades while the oil is still pumping. We're losing more leverage to oil-producing countries as each year passes.
For the 4th time, Dennis Kucinich is introducing a bill that other Democrats have smartly supported in the past: windfall tax on oil companies. That idea is sounding better than ever as we anticipate another round of rosy profit forecasts from Big Oil.
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Consumers are being gouged at the gas pump,” stated Kucinich. “The only thing rising faster than the price of gasoline right now is the skyrocketing profits of the oil companies.”
As of April 25, 2011, the national average gas price was $3.88, according to the Energy Information Administration. Gas prices in the Cleveland area range from $3.75 to more than $4 per gallon. Early reports of oil company profits for the first quarter of 2011 depict earnings increases as high as 50% over last year.
“Washington can no longer ignore this issue,” continued Kucinich. “High gas prices are eating away at consumers’ income and could threaten any real economic recovery that might be on the horizon.”
Kucinich’s bill will:
· Institute a windfall profit tax on gasoline and diesel. Such a tax is to be imposed on all industry profits that are above a reasonable profit level. This proposal would not increase the cost of gasoline because this proposal does not tax the price of gasoline. It only taxes excessive profits of refineries and distributors. Any attempt to increase prices to recover the lost revenue in taxes is simply taxed at 100% making the price increase worthless.
· Transfer the revenue from the windfall profits tax to Americans who would buy ultra efficient cars, made in America, with a tax credit. These will be made directly available to the purchaser of a car that traveled over 65 miles on a single gallon of gas. Today average cars get less than 30 miles per gallon.
· Establish a broad based, far reaching program to promote mass rail transit inter- an intra- city. The bill makes funding available to regional transit authorities to offset significantly reduced mass transit fares during times of gas price spikes.
Defining "excessive" is the trick in a bill like this. GOPers argue that higher taxes mean higher prices as pump, which would be a good thing if taxes are being used to support the green economy.
If there's any hope to be had of saving the world from climate change, and it's hard to imagine personally possessing that hope though it does exist out there, then the U.S. will need to cut emissions. Waiting for oil to just 'run out' won't work, as that process will result in more extraction of low-quality oil like the Canadian tar sands.
There needs to be, at the very least, a windfall-profits tax on Big Oil. I don't think you can pay "your fair share" when your industry is based on destroying the global ecosystem, but you can surely pay more than current tax rates. Oil companies get over $4 billion a year in subsidies, which Obama is publicly attacking.
In case you think that a tax of this type is just "crazy Kucinich ideas because they are", just take a look at California:
The only way they will be reversed is to generate new revenue. That's why the Courage Campaign, where I work as Public Policy Director, is joining the California Faculty Association and the University of California Students Association in launching our pledge to support AB 656, the oil severance tax for California.
AB 656, authored by Assemblymember Alberto Torrico, would generate $2 billion a year for higher education by levying a 12% tax on the extraction of oil and gas in California. Texas uses this tax to fund higher education there, and Sarah Palin increased Alaska's oil severance tax in 2007 in order to buy the love of her constituents. Every major oil producing state in the union has an oil severance tax - except California.
The result of this massive tax break we give to oil companies is the destruction of our public colleges and universities. Fees have risen since the early 1990s only because of cuts in the amount of state funding the schools receive. The only way to make college affordable again is to increase that funding. An oil severance tax is a good place to begin.
http://www.calitics.com/...
Sarah Palin was able to push through higher taxes on oil companies. So it's not too much to ask of Dems to take that tack as well.
There is political risk, as with almost everything, but there is reward as well. And not just political reward.