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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (309998)	11/9/2006 1:47:18 PM
From: combjelly	Read Replies (2) \| Respond to of 1573952

"I don't know. My WAG would be no." Then adding a severance tax wouldn't push up the costs at the pump because y'all be in the global market. In principle it might mean some marginal wells get shut down, but it is hard to imagine a stripper with operating costs anywhere near $60 a barrel. Heck, I saw strippers producing just a few barrels a day back when oil was under $20 a barrel. They weren't making much money, but a little is usually better than none, so they kept operating. Crude is graded according to its fraction of light chains and sulfur content and priced accordingly, usually against one of the benchmark crudes like West Texas Intermediate. Transport costs are very low, pipelines lace the entire country. Producers can't get much more than their grade gets on the global market. They usually don't get much less, either. So the price is pretty inflexible. And that means they can't just pass increased costs along, unless there is some reason why the California market is isolated from the global one. It's your state, and your business. Producers do everything they can to avoid paying royalties to lease holders and severance taxes to the states. Which is why the Railroad Commission in this state is the single most powerful state entity.