The Atlantic describes a man’s recurring nightmare: the possibility that oil may be found in a Western country. Aqqaluk Lynge may be an symbol of the modern world’s ambivalence over everything. To be fair, not many Greenlanders feel the way Lynge does.
Aqqaluk Lynge has a recurring nightmare: “When I’m lying awake at night, I pray we don’t find oil.” That anxiety puts Lynge, the president of Greenland’s chapter of the Inuit Circumpolar Council, a group representing indigenous people from Greenland, Canada, Alaska, and Russia, in the distinct minority of his 58,000 fellow islanders, most of whom hope that a huge oil find will ensure the success of Greenland’s independence from Denmark. Roughly 76 percent of the voters in a referendum last year wanted greater self-rule; on June 21 of this year, they got it. … Then there’s the fear that Greenland could become the Nigeria of the Arctic, another victim of the so-called resource curse, in which oil wealth triggers a downward spiral toward dysfunctional dictatorship.
You mean a dysfunctional dictatorship as in Saudi Arabia, Iran or Venezuela? Heavens no. But if some Greenlanders are looking forward to finding oil instead of fearing it, maybe that’s because they they don’t know yet that carbon is bad. But they’ll realize it someday. Finding oil isn’t the only horror people stay up fearing at night. Caroline Glick describes another concern: that the West might actually keep some of its friends onside. Turkey, she says is becoming increasingly and openly anti-Western. “Once the apotheosis of a pro-Western, dependable Muslim democracy, this week Turkey officially left the Western alliance and became a full member of the Iranian axis.”
The Bush administration ignored the warnings of secular Turkish leaders in the country’s media, military and diplomatic corps that Erdogan was a wolf in sheep’s clothing. Rather than pay attention to his past attempts to undermine Turkey’s secular, pro-Western character and treat him with a modicum of suspicion, after the AKP electoral victory in 2002 the Bush administration upheld the AKP and Erdogan as paragons of Islamist moderation and proof positive that the US and the West have no problem with political Islam. …
As for the Obama administration, since entering office in January it has abandoned US support for democracy activists throughout the world, in favor of a policy of pure appeasement of US adversaries at the expense of US allies. In keeping with this policy, President Barack Obama paid a preening visit to Ankara where he effectively endorsed the Islamization of Turkish foreign policy that has moved the NATO member into the arms of Teheran’s mullahs. Taken together, the actions of the Bush and Obama White Houses have demoralized Westernized Turks, who now believe that their country is doomed to descend into the depths of Islamist extremism. As many see it, if they wish to remain in Turkey, their only recourse is to join the Islamist camp and add their voices to the rising chorus of anti-Americanism and anti-Semitism sweeping the country.
The idea that one might have friends or enemies is so binary, so simple-minded that it almost smacks of bigotry. Nuance is far better. After September 11, the Bush administration announced it was prepared to pre-empt any aggressor who was preparing to strike the United States. Eight years ago, “never again” meant never. Now it means … well, maybe. The pre-emptive strike doctrine is now being reviewed by the Obama administration as part of a more sophisticated approach towards a “more complex” international environment. Bloomberg reports:
Oct. 15 (Bloomberg) — The Pentagon is reviewing the Bush administration’s doctrine of preemptive military strikes with an eye to modifying or possibly ending it.
The international environment is “more complex” than when President George W. Bush announced the policy in 2002, Kathleen Hicks, the Defense Department’s deputy undersecretary for strategy, said in an interview. “We’d really like to update our use-of-force doctrine to start to take account for that.”
The Sept. 11 terrorist strikes prompted Bush to alter U.S. policy by stressing the option of preemptive military action against groups or countries that threaten the U.S. Critics said that breached international norms and set a dangerous precedent for other nations to adopt a similar policy.
The doctrine is being reassessed as part of the Pentagon’s Quadrennial Defense Review of strategy, force structure and weapons programs. Hicks is overseeing the review.
Gone are the days of simple good versus evil, enemies versus friends, striking it rich versus staying poor. We’re not in the black and white 1950s any more. Today everything is a shade of something.
embedded by Embedded VideoYouTube Direkt
“As part of the next arms reduction treaty between superpowers, the United States has tentatively agreed to unprecedented Russian access to American nuclear missile sites. According to published accounts, Russian weapons inspectors will be given an open door to American nuclear sites in order to monitor the number of missiles and warheads. Russian Foreign Minister Sergei Lavrov is quite satisfied with the deal. Perhaps it is an error of omission, but there is no news of a similar concession from the Russian side. This is psychologically and strategically significant: first, because it presents us with a President and a Secretary of State who are mistaken in their assessment of Kremlin trustworthiness; second, because it shows weakness in the President; third, because the Russians are demonstrating a kind of superiority.
The leaders of the United States are unlike any previous leaders we’ve seen at the helm of a major power. Secretary of State Hillary Clinton recently made an extraordinary statement: “We want to ensure that every question that the Russian military or Russian government asks is answered.” And she means it. If a Russian foreign minister made a similar statement, one might expect to glimpse his colleagues suppressing giggles in the background. The America side makes such statements without the least cynicism, irony or humor. The U.S. Secretary of State is putting the concerns of her Russian colleagues first. She is not putting the concerns of the American people first. This is at the core of the process. The strategic interest of the United States holds no place in the President’s policy. Some greater good – or alleged greater good – is being promoted. You may call this greater good by the name of “world peace.”
This state of affairs is even more peculiar when we consider Russia’s declared war policy. On 13 October Reuters reported that Russia had publicly reserved to itself “the right to undertake a pre-emptive strike if it feels its security is endangered….” This was recently announced by a senior Kremlin official. Meanwhile, the United States is publicly renouncing its right to undertake a preemptive nuclear strike in turn. If the United States sees someone else preparing a strike, no preemptive action will be taken. Washington is resolved to accept the strike, and heaven knows whether we have the will to retaliate.
(snip from)
http://www.financialsense.com/stormwatch/geo/pastanalysis/2009/1016.html
It is one thing to irritate your political opponents so that they loose their tempers and say rash things but it is another to be so maliciously incompetent as to give “Casus Belli.”
“Incompetence”? I wish. ‘Sovereignty’ is a funny thing. A mere idea in the mind, really. Under ideal conditions most folks can go through life leaving it wholly unexamined, and have it gone without ever having heard a sound.
“Do you like Green Eggheads and Danish Ham?
Do you Like them, Uncle Sam?”
(the ‘bedtime story’ of Friday October 16th)
But maybe oil is everywhere.
http://www.amazon.com/gp/product/0387952535?ie=UTF8&tag=poweandcont-20&linkCode=as2&camp=1789&creative=390957&creativeASIN=0387952535
Then what?
“The idea that one might have friends or enemies is so binary, so simple-minded that it almost smacks of bigotry. Nuance is far better.”
Frienimies on a global scale…WTF Francis!
Not to be racist as that requires putting your own race above others.
BUT, doesn’t it make perfect sense when you have a multiculti, not quite white, not quite black, not quite American President with a not quite sane administration that you would get EXACTLY just this scenario?
Buddy, Great as always! You must have a internet connection implant.
Simon, Yes. Oil is everywhere. Always has been. Always will be. That isn’t the sticking point. The sticking point is cost of extraction. There was a paper written not so long ago that stated that hydrocarbon molecules and their formation is a function of heat and pressure more than any type of base used for production of said hydrocarbons. As in they don’t come from dead dinos exclusively nor do they come from dead plant matter nor from algae. But they form from deposits of water and carbon in the crust of the earth. Sort of a natural reaction process that depends on location, pressure and temperature.
“the Bush administration upheld ….as paragons of Islamist moderation and proof positive that the US and the West have no problem with political Islam”
Geo. Bush, bless his heart, got wobbly along the way. Maybe he was wobbly in the beginning, bringing the occasional imam to his speeches so he showed he didnt have any truck with religious profiling.
There are maybe five major religions: Christianity, Buddhism, Hindu, Judaism, and Islam. Only one teaches that it OK to force conversions at the point of a sword. Only one teaches that non-adherents are not treated as deserving of life. Only one has a god who is so weak as to require deadly force in defending it. Only one teaches that the state is inseparable from the religion.
This is the result of moral relativity. Ours is no better than theirs, they’re all the same etc. This is applied to cultures and to nations. Our Head of State is a leading subscriber to it. Its seductive: we really want to think we are all the same on the same blue marble spinning thru space together. Its a Rodney King world. Im sorry, dahrlin’, but its not. We can’t all get along.
Some of one want to kill us and the rest of them are OK with that.
JFS:
Here’s a link to a short article on what you said.
http://www.eurekalert.org/pub_releases/2009-07/ci-hit072409.php
Buddy. Right above your link to MAinfo is a superb rant by Mr. Thos. Paine. I commend it to your attention:
http://www.youtube.com/watch?v=Ri1b8j8gG5A&feature=player_embedded
herb, Thanks! I didn’t link that article and now you have saved me some research.
That the MSM makes such a distinction between the hard left(Democrat) and the soft left(Republican) is proof that there isn’t a speck of difference in them.
Those of us who subscribe to the Original Constitution and who subscribe to static definitions of words and concrete morality will have to either capitulate or overcome by any means within our ROE. Levels of disobedience are employable at this time. But are limited by a lack of understanding on our part about moving in a schooling fish mode. Or by using bird flock mentality. People need to start looking at what those around them are doing and making the decision to participate or not. If not then don’t interfere with those that do. If yes then pay attention to the course of events and BE PREPARED TO ACT.
The Joker in the deck for that Inuit Circumpolar Council is Russia. Putin has a vested interest in seeing to it that Alaskan North Slope oil is not developed, that North American shale, tar sands and coal are not developed and that Greenland does not produce oil. When we hear a stupid idea we should ask cui bono?
Resource dependency is a real problem. Most wealth generated from extraction is stolen or wasted on a consumption binge. What is needed is a strong sense of cultural values that encourages people to use the income as finance capital for investment in human capital and then in industrial infrastructure.
Without all their oil the Norwegians would be just poor ignorant fisherman whose opinions about world peace deserved to be ignored, but with oil they are rich ignorant dhimmis whose opinions deserve to be ignored. If the Inuit hire BHOs crack team of financial advisors they can be confident that several trillion dollars worth of oil can be safely extracted and made to vanish like it had never existed.
“From this early encounter with the Soviets, Linton drew a crucial lesson. ‘I could not see why anyone had difficulties dealing with the Red Army,’ he wrote, ‘unless they failed to propose a worthwhile deal and above all keep the key in their hand; then it [worked].’” -from “Endgame, 1945″, by David Stafford
Michael O’Hanlon, a defense analyst at the non-partisan Brookings Institution in Washington, said “the clear challenge for this administration is to find a balance between retaining the right, in extremis, to preempt, while avoiding association with the Bush administration.”
What? avoiding association with rational thought too. That statement is posited with the intellectual vigor of a ten year old.
“The only solution is to try to downplay this option and say it will be reserved for the most extreme cases and even then pursued only with as much international backing and legitimacy as possible,” O’Hanlon said.
All that is left to be said is “Will you respect me in the morning?” Mon Dieu, Wretchard can these people serious? This is their idea of the “Adult” view of the world?
Update: this just in, after playing with fire the administration was seen retreating to the closet as the house burned. Unidentified spokespersons reached by phone wanted to state emphatically that they were “not hiding in the closet” and it wasn’t their fault. “The matches” the spokes person said, “were left lying around by the Bush Administration.”
That Onion video is both hilarious and terrifying. I don’t know who wrote that bit, but he certainly understands how Obama appears to a conservative (and sometime reader of history) like me.
The movement of such a large Sunni populated state into the Iranian sphere of influence, complete with mutual defense agreements with Syria is a coup of sorts. Did the Obama Administration see this coming and was there anything that could be done to prevent it or is it something that is seen as a positive by Washington politicos?
Regionally, it makes sense for the countries that share so much water and culture and sand to want to work together, but the move is seen to be not a breakthrough to Syria as much as a loss of Turkey? Which is it?
Does anyone (here or in Washington) know what the Saudi take on the situation is?
Some links from the website for “The Journal of Turkish Weekly News” , which decided to crash and become unavailable just after copying this off the page that extolled the signing of a visa requirements deal between Syria and Turkey.
NEWS FROM MIDDLE EAST
Israel Faces Growing Pressure After Un War Crimes Vote
China Committed to Strengthening Iran Ties, Russia Rebuffs U.S.
‘Jerusalem-Ankara ties will stay strong’
Palestinian Leadership Praises UN Vote on Gaza Crimes Report
Iraq Set to Buy Russian Weaponry
How pleasantly two faced the headlines appear. Is that a sign of multiple personalities, or just confusion. I suppose this is all a part of what president Obama has been doing to earn the peace prize.
Gone are the days of simple good versus evil, enemies versus friends, striking it rich versus staying poor. We’re not in the black and white 1950s any more. Today everything is a shade of something.
It is not that people don’t want to see things in black and white, it’s that people don’t want to *decide*. Obama, the post-everything president, is a non-decider. Kids cannot say that Hitler is evil, because that would just be an opinion, and they are not allowed to *have* opinions.
But then I heard this morning’s Obama speech about health care, the evil (!) insurance companies who make up “bogus” studies to oppose progress. Isn’t this an opinion? No sir, this is an a priori *fact*! Those who do not allow opinions, instead tell us this, that, and the other are FACTS and to oppose these FACTS is to be a “denier”. Sound familiar?
But I would just point out there is nothing new about this. A common trope is that in the aftermath of bloody WWI, uncertainty was raised to a high art – and that much of even our best scientific theories, or at least the Copenhagen Interpretation of quantum physics, owes much to the popular terror of opinions in that shadow of WWI, opinions having lead to the bloodshed, and judgements of facts would show their guilt at having killed so many, for so little reason. Uncertainty of all things in the universe was so much better.
Like the trailor park couple or the ghetto couple for that matter who make the Lottery’s big win, they usually come to nothing and lose everything they won and everything they had and held value for. In the end the big win just destroyed them.
This is what sudden Oil wealth does for countries.
Turkey, Syria’s new best friend where the photo slide show says almost as much as the stories.
Meanwhile, VPotus on Recovery Act is all about biden feeling out pain VP biding time, feeling Missouri’s pain at loosing jobs, such a heartfelt speech, such a tugging at the tender loins, such a classic used car sales job. I feel all warm and cuddly knowing that Joe Biden understands that it is about my dignity. His efforts to say “I’m sorry, I lost the house” are not the best way to explain just how big time they screwed up.
“L&G, Barack gets it, I get it” says Joe, “We will not have succeeded no matter what the Stock market does, or the… does, until the mothers of St Louis county can look into their childrens eyes and say, with confidence, honey its going to be okay.”
Wasn’t there a movie like that….Honey I shrunk the kids?… Honey I shreaded the future? Not a metal flick but heavy.
#18 HEPT
Then why didn’t it happen to the U.S. or Canada?
“”"”" Geo. Bush, bless his heart, got wobbly along the way. Maybe he was wobbly in the beginning, bringing the occasional imam to his speeches so he showed he didnt have any truck with religious profiling. “”"”"”
‘W’ never really quite was what defenders and detractors alike depicted him as. He campaigned in 2000 as a skeptic of ‘nation-building,’ remember? His ‘compassionate conservatism’ was a variant of his dad’s ‘kinder and gentler’ brand of ‘not-really-conservatism-at-all.’ He pulled America’s punches at First Fallujah for political reasons, showing that his notion of warfare was only somewhat more muscular than what had been practiced by his predecessors. He gave us No Child Left Alo . . . err . . . Behind, and subsidized prescription coverage for seniors. Oh yeah, he also touted the ‘religion of peace,’ and was never the ‘fundamentalist’ Christian that detractors thought he was. A contry-club Republican but for the acquired twang and the ranch.
I’m not putting him down. If given nobetter alternatives, I would prefer him, or even McCain (“shudder!” No, really) over what we have now.
“A nation is humanity brought into living form. The practical result of world-improving theories is always a formless and therefore historyless mass. All world-improvers and world-citizens stand for fellaheen ideals, whether they know it or not. Their success means the historical abdication of the nation in favor, not of everlasting peace, but of another nation. World-peace is always a one-sided resolve. The Pax Romana had, for the later soldier-emperors and Germanic band-kings the one practical significance that it made a formless population of a hundred millions the mere object for the will-to-power of small warrior-groups. This peace cost the peaceful sacrifices beside which the losses at Cannae seem vanishingly small. The Babylonian, Chinese, Indian, Egyptian worlds pass from one conqueror’s hand to another’s, and it is their own blood that pays for the contest. That is their…peace. When in 1401 the Mongols conquered Mesopotamia, they built a victory memorial out of the skulls of a hundred thousand inhabitants of Bagdad, which had not defended itself. From the intellectual point of view, no doubt, the extinction of the nations puts a fellaheen world above history, civilized at last and forever. But in the realm of facts it reverts to a state of nature, in which it alternates between long submissiveness and brief angers that for all the bloodshed (world-peace never diminishes that) alter nothing. Of old they shed their blood for themselves; now they must shed it for others, often enough for the mere entertainment of others–that is the difference….“Lever doodt als Sklav (better dead than slave)” is an old Frisian peasant saying. The reverse has been the choice of every Late Civilization, and every Late Civilization has had to experience how much that choice costs it.”
Oswald Spengler
The Decline of the West, Vol. II, pp 185-6
Ah, that Spengler. He could really spengle. That Caroline Glick article is something. Poor brave woman, she tries to find an upbeat close, and can come up with nothing better than that someday maybe something good will happen. I guess she’s right, anything is possible. But good lord almighty, the details of the break with Turkey –are astounding. The speed, the extent, the confidence, is scary and speaks volumes for what the West has to offer Turkey versus what the Axis can now guarantee. Wonder what Incirlik’s half-life is now.
JFS,
The price of drilling deep wells is going down.
Deep drilling puts a floor on oil prices. As it becomes more prevalent it also caps them.
Life of the Mind #11 (also HEPT #18 and Lovable Curmudgeon #20):
If the royalty income, which is the “unearned” income associated with mineral wealth, is distributed as directly as possible to the individuals inhabiting the area then the ill effects are diffused and tend to be short-lived. The self-indulgent self-destruct and the more sober-minded start putting away for a rainy day.
It is when the state excercises ownership
that the defecation hits the oscillation continuously.
I know that this is a simplification, and perhaps an over-simplification on my part. Nonetheless, I calculate that if Saudi oil was handled like Alaska oil, the Wahabis would be nowhere near as influential as they are. Fortunately, Iraq oil seems to be following the Alaskan model. Gives us a fighting chance to maintain Iraq as an asset rather than a liability.
Now, did I ever tell you the one about the geologist’s wife?
The thing about oil is that it attracts bandits and tyrants. The sick joke about places like Iran and Venezuela is that while they have huge reserves of oil and natural gas their govts are so dysfunctional that they can’t even maintain the infrastructure that they have. In those places over time the ability to pull oil out of the ground so it can be used for immoral purposes declines.
Dave,
Was she oily or did she get her rocks off? Did the earth move for you?
I’m a simple sailor
LOTM #27: The woman went into a fabric store.
She explained that her husband had been on a lengthy business trip. When he got back she wanted to welcome him home with a really erotic new nightgown.
The clerk was very helpful and she soon picked out some flimsy gauze-like material that would be just the ticket.
Then she said, “I’ll take 35 yards of that.”
The clerk was astounded. Thirty-five yards, just to make a nightgown??????!!!!!!!”
“You see, my husband is a geologist. He had rather look for it than find it.”
Dave, LOTM:
The geologist was riding with a farmer friend, when they drove by a hillside populated with white, furry specks. The farmer pointed them out and said, “Look at the sheep on that hill.”
The geologist squinted, rubbed his chin, and replied, “They APPEAR to be sheep, from this side at least…”
Stumbley, was that the geologist who married my old girlfriend, Ellen Berger?
He who betrays his friends should not expect to have any.
NoMorEuro: Unknown perhaps it was the slow build up to wealth that made it seem like it took longer than an instant win.
Perhaps it was just luck, some folks do win the lottery and actually survive the win and prosper, for the most part though instant wealth is like kryptonite.
nomo # 20 and HETP #32:
In both US and Canada, oil was not the dominant industry. Both had diversified industrial and agricultural sectors, not to mention the other extractive (mining) industries.
Also, the two governments did not claim ownership of the oil and auction it off to oil companies: the oil belonged to the landowners, public or private, whose land was located above the oil deposits. (US property law generally holds that a landowner owns a piece of the Earth described by a geometric shape at its surface and projecting downwards as a pyramidal polygon with its apex at the center of the Earth and outwards into the air above. This became an issue when airplanes were invented and the law was changed so that they did not all have to get easements to overfly people’s property.)
In so many of the oil producing nations, oil is all they have and the government owns it. That would certainly be the case in Greenland.
Also, both US and Canada (and UK and Norway) have independent judiciaries, the rule of law and (mostly) the sanctity of contracts. Much of the rest of the world doesn’t.
I grew up in Huntington Beach, California, an oil town. High school team name was the Oilers and team logo was a guy in a hard hat with an oil derrick in the background. Huntington Beach (named for Collis P Huntington of the Southern Pacific Railroad Big Four) was the place where slant drilling was developed. The oil well derricks were located along Highway 1 and the pipes went out under the surfing beach and the ocean to reach the near-off-shore oil.
The oil industry was a major employer, but not a dominant one. Original houses often had oil wells in their backyards, but the biggest employer was actually the defense industry in its several flavors.
Now, most of the producing wells are on offshore platforms, where the pipes splay out in 360 degree fans to tap a large subsurface area. Of course, California hasn’t allowed any new platforms for about forty years, so the far offshore oil is still waiting.
Good luck Greenland: I think that oil would be a good problem to have, as opposed to freezing and starving.
erc rodson,
Regarding the sanctity of contracts, a couple of small cases slipped by under the radar recently that you might want to look up. They may be cited in some obscure journals but the records are most likely being stored in a trunk in a old vehicle left at the impound yard. Just dig for the files labeled GM and Chrysler.
It’s not just oil. Any kind of centralized controllable resource, like blood diamonds or computer operating systems, can become fuel for tyrants.
The agricultural origins of the US, as Thomas Jefferson believed, protected us from some of that. Dispersed wealth that must be cultivated, that depends on individual investment and labor, that’s what drives a viable economy in the long run. The excesses of the Gilded Age show how concentrations of wealth and power can be threatening to even such a democracy as ours, and oil is particularly susceptible to control by conspiratorial cabals.
In the US, the largest oil resource is actually bigger than Saudi Arabia and widely dispersed. It’s called conservation. The only thing that could make us tap that resource, however, is a tax on petroleum. Reich is right that it would be expensive, but not really for us as a country. It would be expensive for the foreign tyrants who control oil today. The tax revenues would represent that part of their expected revenues that we decided to keep for ourselves instead and reinvest in our own country rather than squander it on playthings for emirs. I imagine it would go a long way toward defunding al Qaeda as well.
jj mollo #35: In no way will additional taxes on petroleum help cure the problem. Just escalate it in fact.
The reason is that a royalty paid to a US citizen is a business expense. However, a royalty paid to a foreign government is a tax credit.
This quirk in our tax policy dates back to Harry Truman. He needed to bribe a few people to be on our side in the Cold War.
At that time, domestic oil was in surplus
and refiners had no reason or incentive to purchase foreign oil. The tax credit gambit was channel some cash flow “over there” without having to raid the treasury to do so. It worked—-and has outlived its usefulness but not its supporters!
What is needed IMLTHO is for refiners to guarantee $60 to $80 bucks a barrel minimum
for any and all crude oil or similar refined substance produced in the USA or contiguous countries and keep these price supports in place for around 30 years.
It won’t take long before we will be running a huge surplus and even paying people to keep some of it in the ground. Not to mention our being able to compete in the export business.
Our problem with oil has always been that whenever there is a shortage and people then increase production, the purchase price takes a plunge and those who have produced
lose money. Put in about 30 years of price supports and the producers will not only be assured of operating profit but will be able to pay off all the debts incurred in becoming more productive.
And of course the price supports will keep the price of refined products sufficiently high as to dissuade prolifigate use.
After all we are N-O-T doing bad in the conservation department already. Average and median mileage figures are way above what they use to be and coal has replaced oil as the prime means of generating electricity. So forth and so on.
So if we get the %^&*($%^ gummimint out of the way, we got things licked. Reich, for all his brillance seems unable to grasp what really needs to be done.
Dave, Your response has been niggling at me for months, so I’ve finally tried your argument with my expert. No clear answer yet, but here’s the exchange.
jj mollo wrote:
Rob, I’d like to know how credible this argument is. I’ve always believed that taxes imposed discourage associated activities. Incentives matter. For instance, it can reasonably be argued that progressive income taxes discourage work among the most productive members of society. I don’t necessarily agree with that argument, but I can’t dismiss it either. Whatever this guy, Dave, is saying about petroleum incentives is too deep for me. Can you tell me what he’s saying? -jj
Rob wrote:
ok…i understand. you can call me but the bottom line is that he might be right, but probably only partially right. It is very difficult for oil companies to get all of the taxes (royalty payments deemed to be taxes) as credits.
There are special rules for oil and gas companies regarding the amount of foreign tax credit that they can get (i.e., there is a limit on the amount of tax allowed as a credit against U.S. tax) and my experience with conoco and in general is that these companies have “excess” credits (i.e., exceed the limit and therefore can’t get credit for all the taxes paid).
Also, it isn’t always true that the royalties paid will qualify to be treated by the U.S. govt as “tax” payments….which is necessary in the first place to get the potential benefit he is talking about. And I think there was something recently that would make it even more difficult for the royalties to be treated as tax payments.