[andrewb]

I hear a few people suggesting windfall taxes or higher taxes for energy companies. Obama wants to do it in the US.

It might be popular with the public, to attack those nasty rich shareholders and energy companies, but its the public who get hit in the long run. Energy companies already get taxed a massive amount. To increase supply, to meet demand, and lower prices, energy companies have to drill for more oil. Currently fields are only around 10/20% used and it costs a fortune to drill further. It is often a very, very risky investment to search for oil and dig in new places. These places often don't give a return on the investment.

If we windfall tax these companies, who exactly is going to have the money to search for new supply or spend more drilling deeper? Supply will drop, and prices will increase. The taxed money will only be wasted by our government anyway. Who loses out?

For those who are going to suggest nationalisation. That's where the problem lies, 90% of oil produced is by nationalised companies bumping up prices through inefficiency and bureaucracy.

We need to start looking more seriously at lowering our energy consumption, as this problem is not going to go away. Perhaps with government nudging through massive reductions in taxation on energy saving goods.