Gas deposit

[Non-Believer]

I don't know whether there is gas there or not.

But I'd wager there's a thick film of Snake Oil over whatever is there.

[A fool and his money.....]

2 hours ago, Stu Peters said:

But let's not make the mistake of paying an early adopter premium.

We would be early adopters of renewables in the same way North Korea is an early adopter of democracy.

Let's not make the mistake of paying the premium (environmental and economic) of listening to the sales patter of a private company without having all the figures set in stone. If it sounds too good to be true, it generally is. And this sounds too good to be true.

[b4mbi]

5 minutes ago, A fool and his money..... said:

It's fine to let Crogga find out what's there, at their own expense. But before a spade goes in the ground we should have water tight contracts detailing;

How much will it cost the Manx Government?

How much will the Government pay for the gas?

How much gas will the Government be able to export?

How much will Crogga make from it?

How much will the Manx consumer pay for the gas vs. what we pay now?

What will the environmental impact be?

How long will it be before we can switch to renewables with the income from the gas vs. how long would it be if we left it in the ground?

 

These are all logical and reasonable questions to be asked - and the answers should be binding, backed up by huge fines if they're significantly wrong. Extracting fossil fuels flies in the face of our "climate emergency" ,it's only right that we therefore need to know what we're getting into.

I wouldn't mind betting if these questions were asked and the answers made contractually binding, one or more likely all the interested parties (Crogga, IoM GOV and GMP) would lose all interest in the idea.

Sadly I doubt they're unlikely to be asked, let alone answered.

I agree with your sentiment, but my understanding of the mechanics of how it works is the gas would be crogga's (they retain the economic interest) but government

A) charge them a hydrocarbon tax on the volume they extract

B) recieve income tax from any profit the company makes

C) are able to raise VAT receipts on sales of gas that has been cleaned on island (hydrocarbons are excluded in the Vat sharing agreement, so IOM keeps all revenue)

Separately to that, the government should be able to put conditions on extraction license (e.g. EIA required, carbon neutral, decommissioning costs etc) and could perhaps also contract with crogga to supply mua at a favourable discount rate to market price.

 

 

[AcousticallyChallenged]

1 minute ago, b4mbi said:

I agree with your sentiment, but my understanding of the mechanics of how it works is the gas would be crogga's (they retain the economic interest) but government

A) charge them a hydrocarbon tax on the volume they extract

B) recieve income tax from any profit the company makes

C) are able to raise VAT receipts on sales of gas that has been cleaned on island (hydrocarbons are excluded in the Vat sharing agreement, so IOM keeps all revenue)

Separately to that, the government should be able to put conditions on extraction license (e.g. EIA required, carbon neutral, decommissioning costs etc) and could perhaps also contract with crogga to supply mua at a favourable discount rate to market price.

 

 

How much corporation tax is there on the Island? I’m sure that 0% would be a big revenue. 

[A fool and his money.....]

2 minutes ago, b4mbi said:

I agree with your sentiment, but my understanding of the mechanics of how it works is the gas would be crogga's (they retain the economic interest) but government

A) charge them a hydrocarbon tax on the volume they extract

B) recieve income tax from any profit the company makes

C) are able to raise VAT receipts on sales of gas that has been cleaned on island (hydrocarbons are excluded in the Vat sharing agreement, so IOM keeps all revenue)

Separately to that, the government should be able to put conditions on extraction license (e.g. EIA required, carbon neutral, decommissioning costs etc) and could perhaps also contract with crogga to supply mua at a favourable discount rate to market price.

 

 

If it's decided that that is the best way to do it then that's fine. It doesn't mean the questions I suggested couldn't be asked or answered or binding. We need to know exactly who benefits and what those benefits are and how we're going to 100% guarantee them.

We're potentially doing the world and future generations a massive disservice by extracting this carbon rich fuel, it's not something we should give away lightly and without being very clear as to the guaranteed benefits.

[b4mbi]

17 minutes ago, AcousticallyChallenged said:

How much corporation tax is there on the Island? I’m sure that 0% would be a big revenue. 

20pc for extractive industries.

[Gladys]

35 minutes ago, b4mbi said:

I agree with your sentiment, but my understanding of the mechanics of how it works is the gas would be crogga's (they retain the economic interest) but government

A) charge them a hydrocarbon tax on the volume they extract

B) recieve income tax from any profit the company makes

C) are able to raise VAT receipts on sales of gas that has been cleaned on island (hydrocarbons are excluded in the Vat sharing agreement, so IOM keeps all revenue)

Separately to that, the government should be able to put conditions on extraction license (e.g. EIA required, carbon neutral, decommissioning costs etc) and could perhaps also contract with crogga to supply mua at a favourable discount rate to market price.

 

 

Just one proviso, no funding from IOMG. 

[b4mbi]

 

42 minutes ago, Gladys said:

Just one proviso, no funding from IOMG. 

Correct. Government are not being asked in any way, shape or form to fund this.

At the moment all they're being asked to do is to extend a licence they've already granted for 3 years by another year and half, due to the extenuating,:extraordinary circumstances during those 3 years.

That's it. 

[Andy Onchan]

8 hours ago, A fool and his money..... said:

It's fine to let Crogga find out what's there, at their own expense. But before a spade goes in the ground we should have water tight contracts detailing;

How much will it cost the Manx Government?

How much will the Government pay for the gas?

How much gas will the Government be able to export?

How much will Crogga make from it?

How much will the Manx consumer pay for the gas vs. what we pay now?

What will the environmental impact be?

How long will it be before we can switch to renewables with the income from the gas vs. how long would it be if we left it in the ground?

 

These are all logical and reasonable questions to be asked - and the answers should be binding, backed up by huge fines if they're significantly wrong. Extracting fossil fuels flies in the face of our "climate emergency" ,it's only right that we therefore need to know what we're getting into.

I wouldn't mind betting if these questions were asked and the answers made contractually binding, one or more likely all the interested parties (Crogga, IoM GOV and GMP) would lose all interest in the idea.

Sadly I doubt they're unlikely to be asked, let alone answered.

Believe it or not the multi-trillion global energy industry already has answers to your questions in the form of Production Sharing Agreements (PSA). It's not as if IOMG would be doing all of this for the first time, ever. It's all been done before. PSAs have been around for 50/60 years.

[Gladys]

45 minutes ago, Andy Onchan said:

Believe it or not the multi-trillion global energy industry already has answers to your questions in the form of Production Sharing Agreements (PSA). It's not as if IOMG would be doing all of this for the first time, ever. It's all been done before. PSAs have been around for 50/60 years.

Promenades and docks have been around considerably longer. 

[Happier diner]

9 hours ago, A fool and his money..... said:

 

We're potentially doing the world and future generations a massive disservice by extracting this carbon rich fuel, it's not something we should give away lightly and without being very clear as to the guaranteed benefits.

Not sure on your theory here.

Surely 'doing the world and future generations a massive disservice by extracting this' is not correct.

The damage is proportional to how much gas is burned and not influenced by where it comes from.

[Boris Johnson]

17 hours ago, Non-Believer said:

How much, if any, gas is there is yet to be proven.

But - if it is there - can anybody imagine the scale of the squanderfest and troughery that will ensue once revenue hits Govt coffers?

What will be put in place to ensure that the benefits are distributed beyond Govt, its politicians and employees and their wild ideas?

This

It is the main reason why it should be left in the ground and I say that as someone who tries to reduce their footprint.

[Andy Onchan]

1 hour ago, Gladys said:

Promenades and docks have been around considerably longer. 

There is absolutely no shortage of commercial lawyers in the UK specialising in PSA's that the AG's office can call on to help draft one.

[Gladys]

Just now, Andy Onchan said:

There is absolutely no shortage of commercial lawyers in the UK specialising in PSA's that the AG's office can call on to help draft one.

No, I know, it was a tongue in cheek comment. 

[A fool and his money.....]

9 hours ago, Happier diner said:

Not sure on your theory here.

Surely 'doing the world and future generations a massive disservice by extracting this' is not correct.

The damage is proportional to how much gas is burned and not influenced by where it comes from.

Ah but you're assuming that how much gas is burned is not influenced by how much gas is available and at how much that gas costs.

Basic economics would suggest you are wrong in that assumption.