Is climate change a fraud?

[Gladys]

12 minutes ago, HeliX said:

I very much disagree - the resource definitely belongs to the Island. I'd sooner see it unused than sold for a tiny fraction of its value.

The question is what percentage though... the licence should be made public. Then I can stop being a pest. Or at least be a pest with the right numbers.

It's only an exploration licence at the moment though  I think? 

I am not disputing it is a resource that belongs to the island, but it is a resource we have shown no interest in, probably because we do not have the knowledge/interest/belief/risk appetite to exploit it.  Then, someone comes along who does have those attributes, so sensibly we put the risk of success on them but we will get a payback from licence fees and tax.  Seems like a win win to me, particularly if it turns out to be an abortive venture.

Putting it very simply (and this is not meant to be condescending),  I have an old broken lawnmower in my shed.  It is my resource but I have no idea how to fix it and am not willing to pay to do it. My neighbour asks if they can take it and fix it and in return, they will mow my lawn.  Why would I not agree to that?  No risk to me,  I own the lawnmower but have had no interest or ability to fix it, so it is hardly an asset  and I have the promise that my lawn will be mown so no effort. They fix it and keep their side of the bargain, great.  They can't fix it, a shame, but I still have a broken lawnmower, for whatever good that will do me. However, I wouldn't expect my neighbour to paint my fence also, they must also have an expectation of benefit, even if the prime benefit doesn't materialise. 

[Gladys]

4 minutes ago, Stu Peters said:

My understanding is that around 50% of the profits from this will go into the IOM Treasury, plus we'll have energy security, and Crogga will reinvest some profits into alternative energy schemes - all at no cost to the taxpayer. At least until Comrade Helix launches a cappuccino coup and turns us into a totalitarian Marxist state funded by wishful thinking and grotesque taxes on anyone who earns more than him.

How does Treasury get 50% of profits? Through tax or licence fee?

[HeliX]

2 minutes ago, Gladys said:

It's only an exploration licence at the moment though  I think? 

I am not disputing it is a resource that belongs to the island, but it is a resource we have shown no interest in, probably because we do not have the knowledge/interest/belief/risk appetite to exploit it.  Then, someone comes along who does have those attributes, so sensibly we put the risk of success on them but we will get a payback from licence fees and tax.  Seems like a win win to me, particularly if it turns out to be an abortive venture.

Putting it very simply (and this is not meant to be condescending),  I have an old broken lawnmower in my shed.  It is my resource but I have no idea how to fix it and am not willing to pay to do it. My neighbour asks if they can take it and fix it and in return, they will mow my lawn.  Why would I not agree to that?  No risk to me,  I own the lawnmower but have had no interest or ability to fix it, so it is hardly an asset  and I have the promise that my lawn will be mown so no effort. They fix it and keep their side of the bargain, great.  They can't fix it, a shame, but I still have a broken lawnmower, for whatever good that will do me. However, I wouldn't expect my neighbour to paint my fence also, they must also have an expectation of benefit, even if the prime benefit doesn't materialise. 

If they fixed your lawnmower and sold it for several billion pounds, of which you saw next to nothing, you might feel a bit of a pillock. And it might have been better to hang onto it until you had had several tenders and more research...

[HeliX]

6 minutes ago, Stu Peters said:

My understanding is that around 50% of the profits from this will go into the IOM Treasury, plus we'll have energy security, and Crogga will reinvest some profits into alternative energy schemes - all at no cost to the taxpayer. At least until Comrade Helix launches a cappuccino coup and turns us into a totalitarian Marxist state funded by wishful thinking and grotesque taxes on anyone who earns more than him.

I would be a lot more comfortable if the arrangement that causes that 50% was made public.

If it was only taxes on people who earned more than me, you'd have no need to worry..

[Gladys]

Just now, HeliX said:

If they fixed your lawnmower and sold it for several billion pounds, of which you saw next to nothing, you might feel a bit of a pillock. And it might have been better to hang onto it until you had had several tenders and more research...

But they can't sell it as it is my lawnmower (barring fraud etc.) and I would be perfectly entitled to take it back because they had reneged. But, yes perhaps I shouldn't have jumped at the first offer, but really I hadn't thought too much about that old lawnmower and this seemed like the simplest solution. 

[HeliX]

Just now, Gladys said:

But they can't sell it as it is my lawnmower (barring fraud etc.) and I would be perfectly entitled to take it back because they had reneged. But, yes perhaps I shouldn't have jumped at the first offer, but really I hadn't thought too much about that old lawnmower and this seemed like the simplest solution. 

I don't think our Govt should jump to do something just because it's the first and/or simplest option. My main concerns are any impact to environment/ecology, and if that's OK/tolerable, then my concern is that we don't short change ourselves on a finite resource. I don't think those are particularly "out there" concerns to have! Seems like good due diligence to figure out both.

[Gladys]

Just now, HeliX said:

I don't think our Govt should jump to do something just because it's the first and/or simplest option. My main concerns are any impact to environment/ecology, and if that's OK/tolerable, then my concern is that we don't short change ourselves on a finite resource. I don't think those are particularly "out there" concerns to have! Seems like good due diligence to figure out both.

You are right and that is why the terms of the extraction licence will be very important. 

I don't know how we are expecting 50% of the profits though.  Perhaps tax on 50% of the profits ( for some reason, bearing in mind the 0% corporate tax rate)  which would be 20% on 50%.  Or is it because 50% of the individual shareholders are IOM resident (again 20% of 50%)?  Or is it some kind of duty? 

[HeliX]

1 minute ago, Gladys said:

You are right and that is why the terms of the extraction licence will be very important. 

I don't know how we are expecting 50% of the profits though.  Perhaps tax on 50% of the profits ( for some reason, bearing in mind the 0% corporate tax rate)  which would be 20% on 50%.  Or is it because 50% of the individual shareholders are IOM resident (again 20% of 50%)?  Or is it some kind of duty? 

If it were public (like it ought to be!) we wouldn't have to speculate.

[Gladys]

2 minutes ago, HeliX said:

If it were public (like it ought to be!) we wouldn't have to speculate.

No, but are these terms of anything or an expectation? 

[The Bastard]

Does need some diligence. 50% of the profits sounds great, but it makes me think of the unfortunate creative owners and investors in "Return of the Jedi" "Men in Black" or "Forrest Gump", some of the most popular films in history, that have never officially earned a profit thanks to creative accountancy. It would be naive to sign up to an arrangement where billions could be earned without an actual profit being declared, and no net benefit for the IOM.

[Gladys]

4 minutes ago, The Bastard said:

Does need some diligence. 50% of the profits sounds great, but it makes me think of the unfortunate creative owners and investors in "Return of the Jedi" "Men in Black" or "Forrest Gump", some of the most popular films in history, that have never officially earned a profit thanks to creative accountancy. It would be naive to sign up to an arrangement where billions could be earned without an actual profit being declared, and no net benefit for the IOM.

Indeed, but still forgetting how profits in companies are taxed here - 0%. Unless natural resource extraction companies are taxed differently, like banks or propety rental companies.  

[The Bastard]

37 minutes ago, Gladys said:

Indeed, but still forgetting how profits in companies are taxed here - 0%. Unless natural resource extraction companies are taxed differently, like banks or propety rental companies.  

I'm presuming that it would be via a commercial agreement rather than taxation. Like any agreement though, still would need careful diligence in case it would leave open a possibility that the billions of pounds could disappear into overpayments for services from third parties, and end up recording a net loss, whilst these mysterious third parties disappear with the cash. Not saying it would happen, but best to be diligent.

Edited June 20, 2022 by The Bastard

[b4mbi]

6 hours ago, Gladys said:

Indeed, but still forgetting how profits in companies are taxed here - 0%. Unless natural resource extraction companies are taxed differently, like banks or propety rental companies.  

Pretty sure extractive industries taxed at 20% income tax.

Further, in this case a hydrocarbon tax applies

The licence fee may vary also in accordance to volumes extracted.

Of course the actual agreement is private, but with all of the noise around this project, government will actually in this instance have negotiated a good deal, I'm sure. Though completely understand the pessimism!!

 

[Gladys]

1 minute ago, b4mbi said:

Pretty sure extractive industries taxed at 20% income tax.

Further, in this case a hydrocarbon tax applies

The licence fee may vary also in accordance to volumes extracted.

Of course the actual agreement is private, but with all of the noise around this project, government will actually in this instance have negotiated a good deal, I'm sure. Though completely understand the pessimism!!

 

Thanks Bambi, and there may well be other taxes or government revenues than just traditional corporate tax.  I just got a little twitchy when someone says 50% of profit will end up in Treasury. That seems a very high figure that needs to be verified if it is to be used as a reason to support the project. 

[Happier diner]

8 hours ago, HeliX said:

I hope the licence does that too, but since it's not been made public...

It matters how much the investors make because if we let a private company take 90% of the revenue, that's not a great deal for Manx people. It is effectively giving away a huge amount of our natural resources to private investors. Shouldn't do that with any finite natural resource.

AFAIK the licence is merely for exploration. One it is ascertained if/how/when gas can be extracted then all the environmental impact studies start (along with the protests). I honestly can't see it happening, but you never know