CO reported on Wednesday that the United Kingdom imposed a 25% windfall tax on energy profits late last week.
That will surely do wonders for increasing already limited supplies.
Now President Biden thinks that sounds like a great idea for America too.
As the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff opined earlier this week, energy companies spend tens of billions of dollars exploring and drilling prospective sites–both onshore and offshore–that often come up empty, and then spend tens of billions more to develop the minority of sites that pay off.
Then they pay out tens of billions more in transport, financing costs, regulatory compliance, sales and marketing, permits, royalties, and duties, all on top of the cost of their failures.
Even with global oil prices at their highest level in fourteen years British supermajor Shell plc produced a net income profit margin of 7.3% in fiscal year 2021.
That compares to a 26.3% net profit margin for Apple, 30.8% for Facebook, and 25.7% for Coca Cola.
With the share of profits energy companies are allowed to keep further watered down by new windfall taxes...
"The most marginal prospective sites, the ones E&P companies thought were barely worth the risk at the old tax rate, are sure to be scrapped now." (Economics Correspondent commentary from Wednesday)
More at Reuters: "White House weighs oil profits tax to fund consumer rebate"