There is nothing like an oil company when it comes to unreliable profit reporting, and BP's gain today is partly because it wrote off so many assets a year ago.
What however cannot be denied is that BP's profit is not due to entrepreneurial ability. It is just good fortune.
Nor will most of the investment it will supposedly fund go into green energy. The vast majority will be in carbon production.
I am wary about carbon taxes because I do not trust energy company profit data. It is all about game playing when it comes to their accounts.
But given nationalisation is not on the agenda, and we can deeply regret the sale whose proceeds have long been frittered, what else is there but a windfall tax to tackle the gross rentierism implicit in the operation of oil companies?
The time to tackle this abuse has come, and tax is one way to do that.
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“I am wary about carbon taxes because I do not trust energy company profit data. “
But a carbon tax is charged on volume produced not profit.. that’s one reason why carbon tax is helpful
Specials would not be…..
“Specials would not be…..”
Special turnover? Special tax?Special what exactly??
Your statement re your angst against carbon tax is just plain wrong
Windfall taxes are not on carbon output
They are on the sector
Did you see C4 News tonight?
BP has been paying negative tax rates in the name of providing jobs and the Government has been literally paying them to break up old oil rigs.
I was aware that Government looked after big carbon but I did not know it was like that.
It makes more sense now to me to charge a windfall tax than ever before and have that pay down the energy price rises and use it to subsidise users.
They are far from alone – I have been looking at the sector…
Monbiot was on good form on this subject:
https://www.theguardian.com/commentisfree/2022/feb/09/costs-going-green-tories-energy-bills-environmental-levies-tax
Note that when BP, Shell et al “won” the right to drill – the cost to them of scrapping all the topside stuff was built in – but now apparently not.
Taking a bigger picture view – few years back at a workshop I organised in Bx (“Where will the money come from for the energy transition)”) we had a range of companies around the table (Shell, big steel, big chem etc). 20 of them. Shell said it would fund any renewables straight off the balance sheet – for them it was a non-issue – although at the time (2018) they were not showing the level of activity of now.
Given the windfall profits that BP, Shell et al are now making I guess that much of these will be ploughed back into RES – absent any gov’ action (& Starmer & co if in power will do nothing in that respect – apart from arm waving and a couple of fig leaves). What this means is that the Oil&Gas mafia, after having delayed the energy transition (through lobbying) will now use windfalls to position themselves for a RES future. The stink of hypocrisy being everywhere. In an ideal world, the windfalls would be taxed out of existence and the money ploughed into energy efficiency measures. This will not happen under any UK gov of any sort. Pity. (& I predict that if Liebore get in, its EE measures will be half-arsed &… market orientated – natch).
I read him after I had written…
Same wavelength
And I agree with you re tax requirements
“Note that when BP, Shell et al “won” the right to drill – the cost to them of scrapping all the topside stuff was built in – but now apparently not.”
It was striking that last night on BBC Newsnight the oil sector/Government co-ordinated defence was wheeled out; the windfall tax was unfair because the oil sector had been losing money until now, and the negative tax reflected the losses, and the requirement to fund the de-commissioning burden; precisely missing the ‘priced-in’ cost of winning the original drilling sector award. This is theor problem; only suddenly it is ours!
The same applies to nuclear power stations; only with nuclear how can you possible price in a disposal regime that runs for centuries? The answer is – you can’t in a commenrcial time-frame. So the buck is passed to you and me. The whole thing is a scam; it relies on short public memories and the capacity of some sour neoliberal Government to transfer all burdens to the public sector (while trashing the reputation of the public sector). This is the biggest scam of all, and it everywhere in Conservative Britain today.
Agreed