We have lost our Minds over green

[Caustic Burno]

I did some digging today on this ethanol issue. You can make the ethanol production efficiency calculation result in whatever number you want to, depending on how many of the energy inputs you ignore. Seems like the more you have at stake in this debate, the more energy inputs you chose to ignore.

I'm attaching a link to one of the most common sense articles that I found on this deal... http://www.siteselection.com/ssinsider/ ... ti0708.htm

It sounds like we're in for a long ride. The bottom line question to me is, how much are we willing to spend (as it ripples throughout our economy) to try to reduce our energy dependence and is corn based ethanol a good solution? I'm not convinced that it is. JMO. Not that my opinion or anybody elses is going to mean didly squat up against over $5 billion per year in State and Federal subsidies.

You hit the nail on head the only winner in ethanol is the corn farmer. The American consumer gets to pay for ethanol over and over in taxes, higher food prices, subsidies and at the pump. This is Pork Barrel politics at its finest. Ethanol has raised the price of fuel, fertilizer, food, and gets less mileage than conventional fuels. Please quit helping us.

 

[KenB]

I did some digging today on this ethanol issue. You can make the ethanol production efficiency calculation result in whatever number you want to, depending on how many of the energy inputs you ignore. Seems like the more you have at stake in this debate, the more energy inputs you chose to ignore.

I'm attaching a link to one of the most common sense articles that I found on this deal... http://www.siteselection.com/ssinsider/ ... ti0708.htm

It sounds like we're in for a long ride. The bottom line question to me is, how much are we willing to spend (as it ripples throughout our economy) to try to reduce our energy dependence and is corn based ethanol a good solution? I'm not convinced that it is. JMO. Not that my opinion or anybody elses is going to mean didly squat up against over $5 billion per year in State and Federal subsidies.

You hit the nail on head the only winner in ethanol is the corn farmer. The American consumer gets to pay for ethanol over and over in taxes, higher food prices, subsidies and at the pump. This is Pork Barrel politics at its finest. Ethanol has raised the price of fuel, fertilizer, food, and gets less mileage than conventional fuels. Please quit helping us.

CB I am not disagreeing with you but You may be a bit biased to the oil companys since you can look out of your windows at your oil wells. :wave:

 

[Caustic Burno]

Not really Ken as the average gas well is kaput in less than five years and the average oil well is producing 15 barrels or less in our area. This is a short term windfall, I am for the cheapest fuel. If they made a tractor with a nuclear reactor that was affordable I would be running it. Most of the wells here produce gas like crazy for a year or two and 10 to 12 barrels of oil a day. Neighbor up the road thought he was on the road to being rich well on his place was paying 20,000 a month and he was buying everything under the sun. In less than a year his royalty checks have went to a few hundred dollars. You have to remember the companies recover all there cost first before the first royalty is paid. Neighbor is getting to be on a first name basis with the repo man.

 

[Red Bull Breeder]

I am not all that smart would some one tell me how the corn farmer is going to be all that much richer this fall with the price of fuel and fertlizer seed and chemicals.

 

[1982vett]

Not really Ken as the average gas well is kaput in less than five years and the average oil well is producing 15 barrels or less in our area. This is a short term windfall, I am for the cheapest fuel. If they made a tractor with a nuclear reactor that was affordable I would be running it. Most of the wells here produce gas like crazy for a year or two and 10 to 12 barrels of oil a day. Neighbor up the road thought he was on the road to being rich well on his place was paying 20,000 a month and he was buying everything under the sun. In less than a year his royalty checks have went to a few hundred dollars. You have to remember the companies recover all there cost first before the first royalty is paid. Neighbor is getting to be on a first name basis with the repo man.

Caustic, you made that reference twice. Has me confused. Our leases, starting from 1976 and the last being a 2006 lease in Shelby, are not that way. We have Royalty Interest. I do believe their are other types of interest, such as working interest and overiding royalty interest that may fall into your situation.

RBB kind of been wondering the same thing myself. I think they will see some improvement in the balance sheet, but I don't think they will make a huge profit. That cake is for their suppliers, (seed companies, fertilizer companies, equipment companies, bankers and so forth.

 

[Caustic Burno]

Not really Ken as the average gas well is kaput in less than five years and the average oil well is producing 15 barrels or less in our area. This is a short term windfall, I am for the cheapest fuel. If they made a tractor with a nuclear reactor that was affordable I would be running it. Most of the wells here produce gas like crazy for a year or two and 10 to 12 barrels of oil a day. Neighbor up the road thought he was on the road to being rich well on his place was paying 20,000 a month and he was buying everything under the sun. In less than a year his royalty checks have went to a few hundred dollars. You have to remember the companies recover all there cost first before the first royalty is paid. Neighbor is getting to be on a first name basis with the repo man.

Caustic, you made that reference twice. Has me confused. Our leases, starting from 1976 and the last being a 2006 lease in Shelby, are not that way. We have Royalty Interest. I do believe their are other types of interest, such as working interest and overiding royalty interest that may fall into your situation.

RBB kind of been wondering the same thing myself. I think they will see some improvement in the balance sheet, but I don't think they will make a huge profit. That cake is for their suppliers, (seed companies, fertilizer companies, equipment companies, bankers and so forth.

XYZ company can lease your land and pay you every year for lease rights. There is a difference in lease and royalties. Before the company pays the first dime in royalty they are recouping the cost of the well the road to get to it everything. Everybody is happy here they are rocking the roads except the guy with the well as that is part of the cost of the well. Don't think you are going to turn into Jed Clampet on royalties by the time the state, county, feds, the company get there share there is some scraps left.
Like the guy that thought he had hit the lottery and it would never end, if he had put it in the bank he could have built a nice house for his wife and him. Two hundred thousand dollars doesn't go a long way in today's economy you can go through that quick. It doesn't buy a great big house here.

 

[backhoeboogie]

Not really Ken as the average gas well is kaput in less than five years and the average oil well is producing 15 barrels or less in our area. This is a short term windfall, I am for the cheapest fuel. If they made a tractor with a nuclear reactor that was affordable I would be running it. Most of the wells here produce gas like crazy for a year or two and 10 to 12 barrels of oil a day. Neighbor up the road thought he was on the road to being rich well on his place was paying 20,000 a month and he was buying everything under the sun. In less than a year his royalty checks have went to a few hundred dollars. You have to remember the companies recover all there cost first before the first royalty is paid. Neighbor is getting to be on a first name basis with the repo man.

Caustic, you made that reference twice. Has me confused. Our leases, starting from 1976 and the last being a 2006 lease in Shelby, are not that way. We have Royalty Interest. I do believe their are other types of interest, such as working interest and overiding royalty interest that may fall into your situation.

RBB kind of been wondering the same thing myself. I think they will see some improvement in the balance sheet, but I don't think they will make a huge profit. That cake is for their suppliers, (seed companies, fertilizer companies, equipment companies, bankers and so forth.

XYZ company can lease your land and pay you every year for lease rights. There is a difference in lease and royalties. Before the company pays the first dime in royalty they are recouping the cost of the well the road to get to it everything. Everybody is happy here they are rocking the roads except the guy with the well as that is part of the cost of the well. Don't think you are going to turn into Jed Clampet on royalties by the time the state, county, feds, the company get there share there is some scraps left.
Like the guy that thought he had hit the lottery and it would never end, if he had put it in the bank he could have built a nice house for his wife and him. Two hundred thousand dollars doesn't go a long way in today's economy you can go through that quick. It doesn't buy a great big house here.

There are four pages of clauses that go into my lease agreements. Caustic is correct. You can also be assessed for the pipe line and delivery charges as well. That knocks a huge hole in your royalty payments. Get the right clauses/amendments.

The problem I have at the house (only 16 acres) is that I only own half the mineral interest there. I cannot come to terms with the company and they won't accept the amendments. Most of the neighbors all signed and most bit on the chum money. They have all gone through that now. The companies will up the chum money (they are offering up to $4K an acre in Tarrant County now) in order to get you to sign. Royalty is forever and now matter how small, it is accumulative.

It is okay to be froggy. Just don't jump too quick. I've been studying this for a few years now and realize that I know enough to know I don't know squat.

 

[skyline]

I am not all that smart would some one tell me how the corn farmer is going to be all that much richer this fall with the price of fuel and fertlizer seed and chemicals.

I'll be the first to say I don't understand all the economic impacts of corn based ethanol, but the corn farmer's product (corn) is now over $6 per bushel, more than double a few years ago - in large part due to the new demand for corn produced by over $5 billion per year in federal and state subsidies to the ethanol industry. Compare that to the cattleman, whose product price is declining, at least in some part due the high price of feeder corn. He's paying the same increases in his inputs.