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ikaris · 09-23-2008, 03:09 PM

About the thought of the green shift/carbon tax whatever you want to call it... To those who say that the energy producers will just shift the cost to the consumers, how is that even possible?

If you are competing in a global market where the price of oil is relative to fluctuations seen that are beyond our specific control, if we as a country implement a tax that costs energy producers more money to produce oil but then sell this oil at the global market price, don't the costs only impact the energy producers?

eg. Let's say the price of oil is $120 dollars a barrel. The $15/dollar per tonne carbon tax introduced impacts the energy producers (primarily in the oil sands) so that their cost to pull out the oil is an extra $6 dollars a barrel. I believe to break even in the oilsands, oil has to be at least worth $50 dollars a barrel (that is a very conservative number, in reality it's less). The energy producer (we'll say Syncrude) still has to sell the oil at $120 dollars a barrel based on the current market price.

It seems to me that this increase in taxes has to be absorbed by the energy producer in their profits. Could somebody please provide a detailed explanation as to how an energy producer can somehow burden consumers with this cost?

09-23-2008, 03:09 PM	#552
ikaris First Line Centre Join Date: Apr 2006 Exp:	About the thought of the green shift/carbon tax whatever you want to call it... To those who say that the energy producers will just shift the cost to the consumers, how is that even possible? If you are competing in a global market where the price of oil is relative to fluctuations seen that are beyond our specific control, if we as a country implement a tax that costs energy producers more money to produce oil but then sell this oil at the global market price, don't the costs only impact the energy producers? eg. Let's say the price of oil is $120 dollars a barrel. The $15/dollar per tonne carbon tax introduced impacts the energy producers (primarily in the oil sands) so that their cost to pull out the oil is an extra $6 dollars a barrel. I believe to break even in the oilsands, oil has to be at least worth $50 dollars a barrel (that is a very conservative number, in reality it's less). The energy producer (we'll say Syncrude) still has to sell the oil at $120 dollars a barrel based on the current market price. It seems to me that this increase in taxes has to be absorbed by the energy producer in their profits. Could somebody please provide a detailed explanation as to how an energy producer can somehow burden consumers with this cost? Last edited by ikaris; 09-23-2008 at 03:12 PM. Reason: spelling of provide :)