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Originally posted by 1s1k:

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Originally posted by Aeteocles:
Gentlemen, am I being led to believe that government doesn't already have it's dick in everything?

Certainly we can acknowledge that oil companies, and auto manufacturers have received subsidies and tax breaks long before the first Tesla rolled out of a factory?

The government manipulates everything from the price of gas, to the price of corn for ethanol, to road taxes, luxury vehicle taxes, emissions regulations, import taxes for all the parts, all the way down to how worker labor is taxes on their income. A rebate when I buy an EV shouldn't turn you off from the tech anymore than government farm subsidies should turn you off of dairy.

I don’t like the subsidies at all but you’re right because the oil industry still gets something like $800 million in subsidies every year. If people were honest most of the hate for EV comes from government involvement which is a little strange when you start looking at other industries that have been getting massive subsidies while making billions every year.

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Debunking Myths About Federal Oil & Gas Subsidies

Len Tesoro
Len Tesoro is Director of Land Products at Drillinginfo.

In any presidential election year it is inevitable that candidates on both sides of the political spectrum will begin hailing or bashing tax breaks, subsidies, and regulations throughout the US business landscape. No business is more susceptible to these discussions than the Oil & Gas industry. Depending on the date and audience a candidate is speaking to, an observer will hear that the oil & gas industry is subsidized between $10 billion to $52 billion.

Before we break down the numbers behind the claims, let’s first define subsidy. According to Dictionary.com subsidy can be defined four ways:

1. a direct pecuniary aid furnished by a government to a private industrial undertaking, a charity organization, or the like.
2. a sum paid, often in accordance with a treaty, by one government to another to secure some service in return.
3. a grant or contribution of money.
4. money formerly granted by the English Parliament to the crown for special needs.

The definition does not claim that a subsidy is defined as not paying a certain amount in taxes.

Now let’s break down the so-called subsidies. You will see these numbers inflated or deflated depending upon the source. In order to arrive at the $52 billion amount we have to analyze estimates at the higher end of the spectrum. The top six “subsidies” included in the $10-$18.5 billion estimates are as follows:

Master Limited Partnerships ($3.9 billion “subsidy”) – Ending the MLP “subsidy” would result in MLP’s being considered corporations that must be taxed before their distributions are passed along to shareholders. Therefore, any MLP income would be taxed at the corporate level and then again at the dividend level. Distributions to shareholders would be impacted substantially. Preventing double taxation is not a subsidy. MLPs also exist for Real Estate and other industries. Furthermore, the “subsidy” affects people across the spectrum from Pensioners, 401ks holders, to widows and orphans - hardly a “subsidy” for the oil and gas industry.

Intangible Drilling Costs ($3.5 billion “subsidy” – low estimate is $780 million) - Intangible Drilling Costs are essentially the cost of drilling a new well that have no salvageable value. Currently, most exploration companies are allowed to deduct 100% of the costs in the year they are incurred with the majors able to deduct 70% of the costs immediately with the remaining 30% amortized over 5 years. In what world would money spent that may or may not be recovered be capitalized as an asset?

Royalty Payment Reductions on Federal Lands ($2.2 billion “subsidy”) While paying no royalties on some offshore plots and reduced royalties in some regions might be considered a break by many. The incomes derived from operations are taxed at the same levels as any other income - hardly a “subsidy”.

Depletion Allowance ($1 billion subsidy – low estimate is $900 million) The depletion allowance allows companies to treat reserves in the ground as a capitalized asset that may be written down by 15% per year. The government only allows the “subsidy” for independent producers. Integrated oil companies such as Exxon, BP etc. are not allowed the exemption. Companies across the US are allowed a depreciation deduction for taxation purposes. The oil & gas industry should not be an exception.

Domestic Manufacturing Deduction ($1.7 billion per year – low estimate is $574 million) – Congress passed the tax break in 2004 to encourage manufacturing companies to maintain their operations in the US. The tax break has been extended to oil & gas companies and allows them to deduct 9% of their income from operations. Critics charge that companies would not leave for a lower tax rate. Ever looked at how much cheaper it would be to operate a refinery in another country? Furthermore, the tax break extends to companies across multiple business segments – not just the oil & gas sector.

Foreign Tax Credit ($900 million) The tax break allows US companies to deduct taxes paid in foreign countries from profits when the money is returned to the US. Of all the tax breaks, calling the Foreign Tax Credit a subsidy for the oil & gas industry has to be the most egregious. The US Federal Government allows any corporation doing business outside of the US the same exception.

Several “subsidies” totaling an additional $3 billion combine to complete the $18.5 billion estimate.

In addition to the $18.5 billion in “subsidies” states also grant an additional $3 billion in tax breaks to the oil & gas sector that can be considered subsides. Politicians and political pundits tend to lump state and federal subsidies together. Shockingly, nobody holds them accountable for their misstatements. In addition to the “subsidies” given to oil & gas company operations, politicians attempt to lump in an additional $16 billion in consumption incentives to the oil & gas industry. Consumption incentives range from direct subsidies to low income households for heating oil to tax breaks for farmers, and the US military. It seems that these should be classified as breaks for farmers and the military rather than to oil & gas industry. To somehow get to the $52 billion total, activists then lump in the military costs to defend shipping lanes and pipelines in the Middle East.

Now let’s analyze what the oil & gas sector pays in taxes. In 2012 the top two corporations paying federal taxes in the US were ExxonMobil and Chevron paying a combined total of $45.2 billion. On average, the industry pays a 45% tax rate when all state, federal, and foreign taxes are totaled up. By comparison the Healthcare Industry pays a total rate of 35% and the Pharmaceuticals pay an estimated rate of 21%. Based upon these numbers it’s hard to believe which business sector is criticized the most for “subsidies”

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Originally posted by Aeteocles:
All of the above.

The Volvo (and I'm sure others) have a number of user selectable drive modes.

1. "Pure Electric" where the car uses only the rear wheel electric motors unless you mash the pedal in an emergency. Mashing the pedal instantly turns on the ICE for all available power. When you run out of battery power, your default back to Hybrid mode below.

2. Hybrid. If you have battery power, it will rely on electric motors first, but will kick in the ICE engine for anything above moderate acceleration. If your battery level is low, it will rely on the ICE engine first and kick in electric motor to assist with acceleration (for efficiency). The car will always maintain a reserve battery level using regenerative braking and even direct ICE regeneration power for electric assist (again, for efficiency). The car may, at it's discretion, shut off the ICE engine at any time and push you around using electric motors when your speed and torque needs can be met by available battery charge.

3. Performance. ICE engine stays on, EV motor kicks in for vroom vroom.

4. Constant AWD. Both ICE and EV motor at the same time, all the time, to provide power up all 4 wheels.

5. Hold Battery. Asks the car to save the battery for later use. Will use small amounts of EV motor for acceleration when needed or when excess power had been captured by regenerative braking. Good if you've got a long highway drive and want to save you battery for stop and go traffic or city driving at the end.

6. Recharge Battery. Asks the car to actively recharge the battery using the ICE engine. Good if you have stop and go traffic on either ends of a long highway drive.

The car has regenerative braking in all modes, and will turn on the ICE engine at any time to meet power demand.

My wife's typical usage is a bunch of short drives throughout the day to show houses or meet clients (she's a real estate agent). We only charge at home. She starts the day with 20 miles of electric range, plus a few more when she plugs the car back in wherever she's been at home, and the car just switches to ICE wherever she runs out of electric range. Again, because the car always reserves a bit of battery power for hybrid function, she always has 400hp on tap (for short bursts), even if the electric range has dropped to zero.

For your usage, with about 55 miles of driving in a typical day, you'll probably use about a gallon a day for your commute. With the Volvo, after your electric range is depleted, you get mid-30's mpg.

Other cars are more economical with greater electric only range. The Volvo is a fairly luxurious vehicle that is built like a vault, so it's curb weight isn't doing it any favors. A Toyota RAV4 Prime gets 42 miles of electric range, and has 300hp total system output. You'd be using like a third of a gallon of gas per day for your commute.

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Originally posted by bigdeal:
... I personally have no interest in owning an EV at current because I don't feel they have developed to a point where they meet my needs yet.

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Originally posted by pedropcola:

As for renewables I do cringe at Aeteocles’ assertion that it is a large amount. Discounting nuclear because that’s a hard slog to get approved here in the states solar and wind aren’t even 10%. Sure hydro adds another 7-10% but short some revolutionary idea you aren’t building any new hydro on any significant scale in the snail darter save the ecosystem country we live in. Name a large scale hydro development in works in the US. What you see is what you got. And even that has issues. Hoover Dam? Colorado River?

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Originally posted by vthoky:
After reading a couple more posts here, I'm beginning to think I'm not as smart about this hybrid stuff as I thought I was.

There's mention in several places of "plug-in hybrids." I get it... you have to plug it in to charge the battery. How is that better than the non-plug-in sort? If the car can generate its own charge when the internal combustion engine is running, then (or during regenerative braking) what's the advantage of the plug-in setup? Simply not having to have a generator on-board?

I think if I were to buy a hybrid, I'd want one that could take care of its own charging needs -- again, not having to rely on spotty charger coverage.

Am I thinking about this wrong?

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Originally posted by vthoky:
Thank you, Gibb. You summarized that far better than the two articles I've read since my post.

I suppose I'm just old-school enough to be stubborn about things. I'll parallel plug-in hybrids to smart watches: great technology there, that I sorta wouldn't mind having. But I darned sure don't want to run out the door and find "Oh, crap, I forgot to charge my watch, and now I can't use ANY of its features" any more than I'd want to go out with a half-charged car. The ICE on the car (or the shake-it-set-it-wear-it routine for my automatic watch) is the instant backup plan, is way reliable, and gets me back to the basic function (transport or time-telling) in a hurry.

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Originally posted by Muddflap:

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Originally posted by Lefty Sig:
Bigdeal Johnson is right!

Pretty damn sneaky, aren’t you.

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Originally posted by sigcrazy7:
Nobody has yet to mention a huge concern. How do we plan on funding road construction and maintenance? Currently it is mostly a burden of ICE vehicles through the fuel tax. Many states have higher registration fees on EVs, but that extra fee is usually not equal to what a typical ICE vehicle pays in annual taxes. In short, ICE vehicles have been subsidizing EVs by paying for the roads.

There will have to be a per mile tax, along with the ability to track your driving. I hate the idea, but I don’t see another way to fund our roads.

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Originally posted by snwghst:

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Originally posted by sigcrazy7:
Nobody has yet to mention a huge concern. How do we plan on funding road construction and maintenance? Currently it is mostly a burden of ICE vehicles through the fuel tax. Many states have higher registration fees on EVs, but that extra fee is usually not equal to what a typical ICE vehicle pays in annual taxes. In short, ICE vehicles have been subsidizing EVs by paying for the roads.

There will have to be a per mile tax, along with the ability to track your driving. I hate the idea, but I don’t see another way to fund our roads.

Almost 1/3 the states, if not more now, have an EV surcharge at registration for this purpose. Depending on the state $150-300 annually

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Originally posted by cas:
Aren't they scrap in 5-8 years?

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Originally posted by nhtagmember:
There was a well written article in the ASME journal that did some ‘carbon’ calculations and if I recall the results were surprising.

In some areas of the world EVs made an impact on air quality for the better - reduced local area pollution. However in other parts of the world the pollution actually increased considerably.

The main culprit was the primary fuels source for the regions electrical grid. As the demand for electricity increased, so did the output of pollution.

I think the bottom line was that you can look at the overall efficiency of the ICE and EV and you’re comparing apples and grapes. All you have done is shift the carbon source from one place to another. It’s the overall efficiency of the system that’s important as to whether you see any meaningful reduction in pollution. Remember that ‘carbon’ is just a contrived measure that doesn’t fully describe the system you are trying to model.

I recall a saying from one of my astrophysics classes. There is no new carbon being formed anywhere on this planet unless you happen to be a neutron star.

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Originally posted by sigcrazy7:

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Originally posted by snwghst:

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Originally posted by sigcrazy7:
Nobody has yet to mention a huge concern. How do we plan on funding road construction and maintenance? Currently it is mostly a burden of ICE vehicles through the fuel tax. Many states have higher registration fees on EVs, but that extra fee is usually not equal to what a typical ICE vehicle pays in annual taxes. In short, ICE vehicles have been subsidizing EVs by paying for the roads.

There will have to be a per mile tax, along with the ability to track your driving. I hate the idea, but I don’t see another way to fund our roads.

Almost 1/3 the states, if not more now, have an EV surcharge at registration for this purpose. Depending on the state $150-300 annually

Yes I already mentioned that in my post. I also mentioned that the surcharge doesn’t equal the amount of fuel tax that a typical ICE vehicle pays. Nor does the surcharge pay a single cent into the Federal highway trust fund.