You could also say the gravel under ground belong to us.

No you can’t. You only own the top few metres of any plot of land you have. The rest is the property of the state. Not the same argument, I’m afraid.

Where would you explore.

Norway, of course, and that’s the way it ought to be. The oil and gas isn’t going anywhere and leaving it in the ground until it becomes economically viable is just good business sense. However, by offering the extraction rights at low, low prices (i.e., nothing), the government is, well, throwing away perfectly good money.

This is why pretty much no other country in the world uses corporation tax as a device to return the value for extracted minerals to the country from which they are extracted.

Of course different countries set different royalty levels depending on the value of what is extracted, and the difficulty of extraction. This is the normal operation of a market – lower your price and you sell more. Any rational seller sets their price at the level that they expect to make the most money – too low and they’re losing money, too high and they’re losing customers.

Now, can you tell me, is there any market in the world where the seller sets the price to zero?

I find it very difficult to believe that this behaviour is that of a rational seller. It seems far more likely that the minister negotiating on behalf of the seller (Ireland) was, in fact, acting on behalf of the seller.

Couple this with the fact
a) the minister is now a convicted criminal as a result of taking bribes in other areas
b) those bribes were given by businessmen in return for commercial advantage
c) individual businessmen who benefited from the zero-price of Irish resources are known to be personally close to the convicted minister

and it doesn’t seem all that unreasonable to say that Ireland just might have been the victim of a rip-off

The standard rate of corporation tax is 12.5%. Extraction companies pay 25% or double what normal companies pay. They do pay to extract it. They pay 25% of the money they make from extracting it.

You could also say the gravel under ground belong to us. But do people give out about people quarrying for top soil? It is the exact same argument as for oil save for the profit margin and the fact that the success rate of extracting oil is less then that of extracting top soil.

The rate of finding comerically viable sources of oil in this country is a little over 1 in 30. Most companies no longer explore in Ireland as the likelihood of finding comerical oil is so low. In Norway it is 1 in 3 . Remember no sources of oil are being extracted in Ireland. Only 1 gas source, with Corrib being like it is. So if you were a company and you had to pay the same price for exploring in ireland as in Norway and you were over 10 times more likely to make money in Norway. Where would you explore.

This debate really has been done to death around the internet. I was just highlighting the fact that is rarely highlighted that 25% of the profits from oil go to the state.

Almost all contries charge large royalties for the right to take out the fuel, precious metals or other natural resources, and _then_ they tax the profits. The royalties are due regardless of whether the extraction company makes a profit or not – because the profit can easily be moved around to low-tax locations with transfer pricing.

It is utterly extrordinary that foreign multinationals can extract oil and gas in Ireland without paying a cent for it, one might even think that this was the result of bribes changing hands, if it weren’t for the fact that the process was overseen by that upstanding pillar of honesty, Ray Burke.

This attempt to confuse corporation tax (paid by all compaines in profit) with royalties (paid by extraction companies) is pretty typical Fianna Fáil spin to cover up their corruption.