Well, I can lead a horse to water but I can't make him drink:
"In The Tax Act of 1986 Congress extended, as an incentive to keep prices low (subsidy), special favor to those who participate in oil and gas ventures. The tax act allows for Intangible Drilling Costs (labor, chemicals, mud, grease, etc.), which are typically 70% to 90% of the cost to drill a well, to be written off the taxable year, expensed against ordinary income."
"Furthermore, Tangible Drilling Costs (well equipment, storage tanks, pump jacks, etc.), typically 10% to 30% of the cost to drill a well, are 100% tax deductible as a depreciation expense over a seven year period using the Accelerated Cost Recovery System (ACRS).(See Section 263 of the Tax Code)"
"Lease costs (purchase of leases, minerals, etc.), sales expenses, legal expenses, administrative accounting, and Lease Operating Costs (LOC’s) are also 100% tax deductible in the year they were incurred."
"Any Geological and Geophysical (G&G’s) expenses paid or incurred in connection with the exploration for, or development of, oil or gas within the United States (as defined in Code section 638) may be amortized ratably over the 24-month period beginning on the date the expenses are paid or incurred.(See Section 167 (h)(1) of the Tax Code).
COMBINES, THESE INCENTIVES ADD UP TO A 100% WRITE OFF AGAINST ORDINARY INCOME. And, all of them are incentives toward production to keep the prices low.
Additionally, the tax code specifically states that a Working Interest in an oil and gas well is not a “passive” activity; therefore, deductions can be offset against income from active stock trades, business income, salaries, and so forth.(See Section 469 (c)(3) of the Tax Code)
If you’re involved in a dry-hole well you qualify for a 100% write-off of all costs, intangible and tangible alike, in the first year. Dry-hole costs are typically deducted on Schedule C or Form 1065 and are NOT subject to the usual $3,000 limit. These costs, when reported, should still be broken down by intangible, tangible and lease costs."
Additionally, "as an incentive to encourage participation in oil and gas drilling (as opposed to keeping prices lower, therefore, not a "subsidy") was added by the 1990 Tax Act, in which a small producer’s tax exemption known as the “Percentage Depletion Allowance” allows for 15% of the Gross Income (NOT Net Income) from an oil and gas producing property to be tax-free. This tax benefit is not available to any entities or individuals owning more than 1,000 barrels of oil or 6,000,000 cubic feet of gas average daily production."
“One of the main arguments to keep fossil fuel subsidies is that they protect the poor, but studies show that 80% of fossil fuel subsidies go to middle and high income households.” Fatih Birol, Chief Economist at the International Energy Agency
You think oil companies would cease to exist if a couple billion in 'subsidies' disappear?
You defend lazy worthless people....admit it and lets move forward...
And i support NO industry subsidy.....
Lets see who would survive on their own!!!
The economics of nature!!!!!