Essay by Eric Worrall
Life in the EU – If it moves, tax it, if it stops moving, subsidise it.
ExxonMobil launches legal challenge to EU’s windfall tax on energy firms
US oil firm contests legal authority for ‘solidarity contribution’ to raise funds to offset soaring energy prices
@RJPartington Thu 29 Dec 2022 04.57 AEDT
ExxonMobil has launched a legal challenge against the EU in an attempt to derail the bloc’s windfall tax on the profits of energy producers.
Agreed in September as part of a package of measures to tackle the surge in oil, gas and electricity prices triggered by Russia’s war in Ukraine, the EU hopes the “solidarity contribution” could raise €25bn (£22bn) in public revenue for governments across the 27-nation bloc, while acting to curtail energy demand and bring down prices.
“This tax will undermine investor confidence, discourage investment, and increase reliance on imported energy and fuel products. European industries already face a very real competitiveness crisis and governments should be supporting the production of reliable and affordable energy.”
“Whether we invest here primarily depends on how attractive and globally competitive Europe will be,” said Casey Norton, a spokesperson for the company.
…Read more: https://www.theguardian.com/business/2022/dec/28/exxonmobil-launches-legal-challenge-to-eus-windfall-tax-on-energy-firms
Exxon’s suggestion they will reconsider investment priorities is no idle threat.
Leftist Western leaders simply don’t understand how precarious their position is, in terms of attracting energy investment. After decades of stagnation, Africa is finally getting back on its feet, with enormous pipeline and energy projects drawing the attention of transnational energy majors.
If the EU and other states go forward with these taxes, they might find themselves on the receiving end of even more severe energy shortfalls in coming years.
Europe, the new Africa.
Africa, the new Europe.
Amazing how Geologists working in Nevada go right to the heart of an issue. Must be breathing in all of that gold dust.
And if you are a politician – if it does not exist, believe that it does.
The EU needs to replace the funding it is losing from the UK since Brexit which was about £12Bn net per year. Poor things sob,sob,sob.
How on Earth does increasing taxes reduce prices?
“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle” Sir Winston Spence Churchill.
So the EU would like Exxon to stump up for the failure of EU foreign policy and energy policy.
And now the fourth reich has jumped into bed with Qatar instead of Russia
“Suitcases stuffed with cash seized by police investigating Qatar bribery of European politicians” – MSM
Looks every bit as dodgy as before. Exxon should walk
Windfall Tax ? if successful, the next time these energy companies turn a loss – they will almost certainly have a case to sue for subsidies to tide them over.
That’s how it is with socialists. Heads I win, tails you lose.
There is something quaintly appropriate, that the EU would call its raid on Oil and Gas suppliers a “Windfall tax” That sums up the EU perfectly. They are relying on wind for energy and when the wind falls they think they can just rob the fossil fuel industry to cover their flawed energy policies.
Thinking to myself that if there’s any true windfall tax to be levied, it would be more appropriate to have a go at the Ruinables industry. The entire industry is a windfall.
Let’s parse this out.
Bring down prices?
What are you smoking?
It will either raise prices and curtail demand or if consumers will get some sort of subsidy to “bring down prices”, then it won’t curtail demand. It can’t do both.
Well, it could do both for a subset of the population. If the goal is to eat the rich (and when isn’t it?), and when we further understand “the rich” to mean everyone who works for a living, then the fascist EU state could lower prices for their parasite clients at the expense of productive citizens whose demand for energy might drop more than the parasites’ demand increases in response to lower prices.
That seems almost convoluted enough to be an EU policy, so it’s probably about right.
It wasn’t too long ago that politicians were bragging about how their policies were causing energy prices to rise.
It’s how they intend to curtail demand.
Here’s a good overview of how badly EXXON is run:
Where does the price of oil go?
My crystal ball says down, driven by lower demand (recession)—unless it goes up, or stays the same!
I was thinking about the same. Short term gyrations being unpredictable.
On a longer timeframe, peak oilers continue to be proven wrong as supply and demand have risen, except for 2020 drop today’s subsequent recovery.
Fundamentally, we need energy (and materials) and the cheaper, the more reliable the better. Eventually a deflationary recession will hit but can it outpace the ever accelerating printing presses?
In any case, happy new year!
It seems that the goal is to transfer wealth from the middle class to the elite crony “capitalists” and to the client parasites who keep them in power via the sham democracy.
They hope to avoid a deflationary recession, but is there any historical precedent for the printing presses NOT leading to hyperinflation? A trillion here and a trillion there…pretty soon you’re talking real money to paraphrase Everett Dirksen.
Happy new year, against all odds!
Greenwashing is annoying but in today’s environment that is probably not an indicator of poor management. I think you intended that comment as sarcasm since the article fairly gushes about XOM outperforming.
And IF they use “carbon recapture” to get “carbon” credits, pumping the CO2 into the ground to increase pressure in older oil fields, they get a win/win from the insane net zero windfall tax credit/deduction benefits and green washing the “perception” of the public, with a good PR campaign, at the same time.
As long as the “green washing” is all just that, no actual wasted expenditures other than PR, then EXXON/Mobile looks like a really good future investment.
The article says almost nothing about how XOM is run
Did you read it while a Yooper polar bear was chasing you?
I compared ExxonMobil (XOM)
with Chevron (CVX)
for the past 12 months
Sales $387 bis
Net Profits $52 bils
Profit Margin 13%
Sales $277 bils
Net Profits $34 bils
Profit Margin 12%
So how do you conclude that XOM is “badly run” ?
R Greene in SE Michigan
A couple of us, at least, think it was meant as sarcasm.
Surely they can do better than that….
All oil companies should stop supplying ALL product to any governments that have taken up the ‘let’s go green‘ policies …
Give them a taste of ‘Net Zero‘.
6 months should do it !!
Any surviving politicians will soon change their minds.
That would require a level of collusion only seen in the fevered minds of certain trolls contemplating Trump and Putin.
Somebody will sell oil to them and somebody will profit off the transaction. The most that can be done is to drive up the cost for the nut zero crowd.
Here’s Joey’s plan…..shut down the Keystone pipeline as part of ending fossil fuels, kiddo. Take from those who have (Big Oil) and give to those who want(Big solar/wind). Joey learned from his pal Xi Jinping….Joey knows climate….Joey knows economics….Joey was in the top of his class.
It’s the EU that is doing all the “threatening”. Exxon is acting with good business sense. If your business isn’t making money in an area it’s good judgement to protect the shareholders and leave. The EU is in no position to play this game.
Newton’s Third Law applies to economics – every action has an equal and opposite reaction.
EU budget 2022 = 168 billion Euros
ExxonMobil annual revenue to Sept 2022
= 403 billion dollars
Hmm…maybe the EU should think twice before catching a tiger by the tail. (See what I did there 😏)
Waste of time taking the EU to court, Exxon will lose. Better to quid investing and go somewhere that appreciates the money, investment and job opportunities such companies provide.
Leftists have always taken great pride in not knowing how anything works.
This is especially true when it comes to economics.
Actually, Leftists take great pride in not working, period. How else do they have the time to attend all those conferences and protests?
I have been waiting for Atlas to shrug! This is the end game to stop the totalitarians in their tracks within days. Ayn Rand wrote this book in 1957. Everyone should read it (all wattsupers over 70 have probably read this blockbuster, but education was abolished in the West a decade later so I’m not sure how widely read it is).
Most people would both starve and freeze if they attempted to implement that plan. Government goons are not quite so stupid as portrayed in fiction. THEY read the book and they proceeded to hedge their position by making sure almost everyone is dependent on government in some respect for some necessities.
Well, I was referring to Atlas in a different context here. Exxon is going to redirect where it invests and who it supplies at the price, they decide on.
The oil companies had gone all-in to appease the green goons so that they could carry on with business. They got pushed around, defunded, sued and were told they would be gone in a decade or two. Now, in the driver’s seat, with energy commodities desperately needed by their malefactors despite high prices, they are dictating the terms to the UKs, EUs, USs and everyone else.
Moreover, they will be developing Africa’s deposits, a big boost to this much maligned continent, and a further blow to the idiot policies and plans of the WEF and Euro-centric totalitarians. That’s what I meant.
So far the big oil companies have failed to defend themselves in any way beyond technicalities, without addressing the fictions that they are actually responsible for everything bad. I don’t think they had even a tiny chance of winning anything in an EU court.
So far, it seems as if all develop African resources are being undertaken purely for the benefit of non-Africans (except for the bribes).
It’s one thing to pander to the extreme left, but if the EU leadership sincerely believes that taxing energy will bring energy prices down, as does the California state leadership, then we are really in trouble.
California returns “carbon credit” once yearly on the highest utility bills in the country and claims it reduces energy costs.
Hooray, finally a corporation grows a pair!
The EU’s energy windfall tax is revenge for America’s IRA – inflation reduction act which massively subsidies US electric car makers. Now there’s a full blown trade war between the US and EU.
It should be called a wind fail tax
I thought they already were.