After the Obama admistration backed denied that they were going to try to institute a Carbon tax contradicting Senate Majority Leader Harry Reid, is it possible that a back room deal between the energy industry and the administration could open the door for a new tax coming to a gas station near you? Is it possible that the Obama admistration is making the energy industry a deal that they just can’t refuse? In other words if the industry backs off its opposition to a carbon tax the Administration might get off their backs? If they continue to oppose it l the administration might make their lives a living shall we say night mare? Does the energy industry believe that they can make up for the tax by being able to produce more oil and gas and will Republicans join in if the administration but more federal lands in play? Well that is my take on a Bloomberg article and my understanding of Politics done the Chicago way.
Bloomberg reports that there is the possibility of a carbon fee from Obama seen viable with Exxon backing. They report that “Exxon Mobil Corp. is part of a growing coalition backing a carbon tax as an alternative to costly regulation, giving newfound prominence to an idea once anathema in Washington. Conservative economists and fossil-fuel lobbyists united in 2009 to fend off climate-change legislation that would have established a cap-and-trade mechanism. They are now locked in a backroom debate over a tax on carbon-dioxide emissions that could raise an estimated $100 billion in its first year. A carbon tax would force electricity producers, refiners and manufacturers to pay a fee for the greenhouse gases they emit. It is gaining interest as lawmakers and President Barack Obama pledge to simplify the corporate tax code and raise revenue to narrow the deficit. The devastation from superstorm Sandy following the wildfires and drought of this summer have also increased concern about global warming.”
They went on to say the “Washington-based American Enterprise Institute, which says it advocates libertarian and conservative values, held a full-day discussion Nov. 13 to examine how best to implement a carbon tax, which its economists say could enable a cut in corporate taxes and head off regulation by the Environmental Protection Agency. The same day, an opponent of the idea, the Competitive Enterprise Institute, filed a lawsuit against the Treasury Department, seeking private e-mails it said would show the administration is secretly pushing for a carbon tax. “They want new sources of revenues, and this is an enormous one,” Chris Horner, a senior fellow at the Washington- based CEI, said in an interview. “This thing is gaining steam. If successful, it would be disastrous.”
They Write that “Exxon, which opposed legislation in 2009 that would have capped carbon emissions and allowed an auction to trade them, said at the time that a carbon tax would be easier to implement and more predictable. “Combined with further advances in energy efficiency and new technologies spurred by market innovation, a well-designed carbon tax could play a significant role in addressing the challenge of rising emissions,” Kimberly Brasington, a spokeswoman for the company, said in an e-mail. “A carbon tax should be made revenue neutral via tax offsets in other areas,” she added.
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Exxon’s political action committee gave nearly $1.2 million to political candidates in the past two years, 93 percent of it to Republicans, according to the Center for Responsive Politics. Exxon is the biggest U.S. natural-gas producer. A carbon tax could boost demand for natural gas in U.S. power plants, as gas emits half the carbon dioxide as coal when burned to make electricity. Natural gas futures fell 1 percent to $3.724 per million British thermal units today. Gas prices are down more than 35 percent since the beginning of 2011, as hydraulic fracturing has boomed. “The source hit hardest is coal,” David Kreutzer, a research fellow in energy economics at the Heritage Foundation in Washington who opposes the tax, said in an interview. “The biggest substitution for coal is going to be natural gas.” Taxing greenhouse-gas emissions would help finance an overhaul of the convoluted corporate tax code and is a better way to address global warming than regulations from the EPA, according to Aparna Mathur, an economist at the American Enterprise Institute who hosted yesterday’s forum.
Oil prices seemed to shake off worries surrounding the increasing tensions in the Gaza strip and instead decided to focus on the weak jobless claims and the looming fiscal cliff. Not even a supportive Energy Information Administration report at least based upon expectations was enough for the market to rebound. Erratic trading and mood swings seem enhanced by people worrying about our economic future. A meeting today between President Obama and key legislators could be the catalyst from a market move today.
Did Christine Lagarde just call Angela Merkel fat? I don’t know what other lady she can be talking about when she said it isn’t over until the fat lady sings. Of course I sang to Angela when I wrote “Angie, Angie, when will those clouds all disappear? Angie, Angie, where will it lead us from here? We can’t hit austerity goals with no money in our coats; you can’t say were satisfied But Angie, Angie, you can’t say we never tried! Angie, you’re dutiful, but ain’t it time we were allied? Angie, we still need you, forget all those times we lied! All the dreams we held so close seemed to all go up in smoke Let me whisper in your ear: Angie, Angie, where will the euro go from here?” Then a few days later a band stole my idea and actually did a parody at an event that she was attending!
Well the other issue causing this state of stupid volatility in these markets is the issue of whether or not Greece will get its bailout. Reuters News reports that “a crucial Eurogroup meeting next week on Greece should forge a deal that will put the insolvent country's economy on a sustainable path, International Monetary Fund (IMF) Managing Director Christine Lagarde said on Friday. The IMF chief is cutting short her tour of Asia to attend the Eurogroup meeting in Brussels on November 20.A row between euro zone governments and the IMF over how to make Greece's giant debt mountain manageable is holding up the release of 31 billion euros ($39.5 billion) in emergency loans needed to keep Athens afloat."It is not over until the fat lady sings as the saying goes," Lagarde told reporters when asked by reporters in Manila about the possibility of a deal on Greece next week.”
Gold tanked on the gears over the economy as well. It seemed to accelerate after comments by federal Reserve Bank of Richmond President Jeffrey Lacker on Thursday said according to Dow Jones that uncertainty over U.S. fiscal policy is holding back business investment and hiring, though he expects “meaningful progress” on budget issues now that the election is over. If we do get a deal the US could grow at 3% if not…. Look out below! Woah!
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