Skip to comments.Governor says he'll pursue oil tax cut to raise production
Posted on 05/31/2011 8:03:55 AM PDT by thackney
Gov. Sean Parnell said he plans to continue to "pursue vigorously" changes to Alaska's oil tax structure as a way to boost production in the state.
Parnell told The Associated Press he is currently working to get the votes needed in the Senate to advance the tax cut narrowly passed by the House during the regular legislative session. The bill stalled in the Senate, with leaders in the majority bloc saying they didn't have the information needed to make a sound decision, but the bill will still be in play when the Legislature reconvenes in January.
While Parnell said he's open to other ideas for stemming and reversing the trend of declining production, "we need to see it. At this point, what we have on the table to increase jobs, increase production and basically create a longer-term future for Alaska...
(Excerpt) Read more at adn.com ...
Sean Parnell, we welcome you as our newest member of the Corrupt Bastards Club.
It is the reason while Canada and the lower 48 are beginning to boom with oil/gas jobs, Alaska is still declining in those employed in the same industry.
Many people working in the industry left Alaska in the past few years for a better business future outside. I know, I am one of those.
we need to roll back all restrictions and start drilling our own oil and tell the arabs to go mess with themselves. we are DONE.
The oil tax increases that Palin pushed through in Alaska were confiscatory and unfair and, as is now obvious, counterproductive.
And not at all conservative!
Calling all Palin fans who think she is the greatest thing since sliced bread! These increased taxes had her blessing. She used the money to buy votes. It is what pols always do.
Shshhhhhhh, you are supposed to pretend they were the greatest thing ever done. Shussssssssh.
Why are you calling Mr Parnell a corrupt bastard. Palin was sure she leaving Alaska in good hands.
And not at all conservative!
This writer, having done the appropriate research, makes the case that Palin, after taking on the corrupt oil interests in her state, sought to reverse the special treatment oil companies were given. The revenues raised under the plan that was everntually passed by the legislature gave the funds previously taken from Alaskans, back to them.
Not that you'd be interested in reading it, but the writer also presents Gov. Palinn's plan before the legislature's revision and final bill.
From the website:
Governor Palin did what any conservative worth their own soul would have done. She gave tax dollars that were literally stolen from Alaskan taxpayers right back to them and appropriately reversed corrupt tax policy. Not only did she bring ethics back to the tax policy in regards to the oil industry in Alaska, she improved the policy itself in her proposal.
That is complete and utter BS. That's straight from the liberal playbook...tax big oil 'for the people'. Down with the evil corporations!
So by this logic any money made by any corporation that is not surrendered to the state in taxes is considered to have been STOLEN from the people of the state in which that corporation operates. Sounds like something Maxine Waters would promote.
When oil prices are $100 a barrel, the total marginal government take in Alaska is 82 percent. In Alberta, its 55 percent. In the Gulf of Mexico, its 43 percent. Alaska is simply not competitive under ACES.
Obvious to whom they are counterproductive? It is not current taxes on the oil companies stopping drilling, they want to drill in several areas, but Obama’s people won’t let them.
Cutting sweetheart tax cut deals with the oil companies is just a new start for the Corrupt Bastards revival. I worked for a major in AK about 40 years ago, the collusion between the oil companies and politicians was rampant then. Palin cleaned out that rat’s nest, and she was hated by them for it.
With Palin gone, it will soon be back to under the table dirty business as usual. Even some of Palin’s political enemies who cheered her departure, are now admitting Parnell’s deal will undo the good she has done.
Apples and oranges.
See my post #15.
Alaska has oil shale as well and companies like Great Bear wanting to produce it. But the biggest obstacle to production in Alaska today is commercial, not technical according to Great Bear.
Great Bear Petroleum told House Resources it hopes to drill 200-250 development wells every year for 20 years on the North Slope, but it must compete globally for investment capital. They are working with the legislature to make changes to HB 110 that are critical to its ability to secure funding.
Great Bear testified that its greatest challenges in Alaska are commercial, not technical.
Great Bear President & CEO Ed Duncan: Alaska has some of the best rocks in one of the best petroleum provinces in the world, but it also has some fiscal terms that are suppressing development.
Cutting sweetheart tax cut deals with the oil companies
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You have an interesting description of a 21% total tax rate as a sweethart deal. That does not include all the taxes paid to the federal government. Comparing the year before to the year after the ACES change, tax rates more than doubled.
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In 2006, oil companies paid 21% of the selling price of their oil to the Alaskan Government.
Spring 2007 Revenue Sources Book, Alaska Department of Revenue Tax Division
Page 4 in the Excutive summary, Figure 2-2
First Column, Historical numbers for 2006.
Total Oil Revenue (including all taxes and royalties) $4,358.9 million
Alaska Department of Revenue, Tax Division, Fall 2008
Crude Oil Production-History
2006 Total Alaska Oil Production = 0.858 million bpd = 313.2 million barrels
Total taxes, fees and royalties paid were $11.81 per barrel
Alaskan Crude Oil selling price in 2006 = $56.86 per barrel
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In 2008, oil companies paid 47% of the selling price of their oil to the Alaskan Government.
In 2008, Total Alaskan Oil Production was 266.45 million barrels of oil.
In 2008, Alaska collected 11,288.1 million dollars from the oil companies.
Page 2, 2008 History
Royalties were only 29% of the total they collected.
That is $42.36 per barrel that the Alaskan Government collected. That does not include any of the taxes collected by the Federal Government.
In 2008, the average price for Alaskan Crude Oil was $90.10.
You have no way to prove what you say is true or that Sean Parnell is a corrupt bastard. Sounds like he is trying to do what is best for the decline in production in the State.
Calling the man corrupt is a stretch.
Oil field flow rates in Alaska have been on the decline for years. Because flows are low, companies have technical challenges getting to the oil and are understandably nervous about risking leaks. They are probably years away from offshore sources of oil.
25 percent tax on net profits, or the value of the oil minus operating expenses and pipeline and tanker charges. That compares with the 22.5 percent Petroleum Profits Tax passed in 2006. The tax rate rises when oil prices are high.
Protection when oil prices are low. The big fields of Kuparuk and Prudhoe Bay would pay at least a 10 percent gross tax on the oil's value. This tax on the gross -- before operating expenses are deducted -- would be instead of a tax on net profits, not in addition to it.
Palin raised the tax on oil companies from 22.5% to 25%. But it should have stayed exactly the same as it was under Murkowski? Those companies took huge advantage of corrupt politicians. They took money out of the state and from the people.
Unlike in other states, each Alaskan actually benefitted from the oil tax increase, in the form of an annual rebate of at least $1200, and a state government that had a surplus. Alaska does not have a state income tax or a sales tax. So they should lower the oil tax and then institute an income tax or a state sales tax? The oil industry in Alaska funds everything. Oil and all natural resources in the state are owned by Alaskans.
And you see this as a good thing???? This is how socialist states operate all over Europe. Europeans don't get a direcr payment however, they get guaranteed welfare from cradle to grave. No wonder oil companies are pulling out of Alaska and investing in the lower 48. Alaska is being run like a socialist state.
The only reason? No, certainly not.
They are probably years away from offshore sources of oil.
There are offshore fields already in production in Alaska. But they are built with artificial islands and/or extended horizontal reach from land.
Palin raised the tax on oil companies from 22.5% to 25%
Palin proposed that increase in the profit tax and it was accepted. But that was not the only change to ACES. Many parts of it changed resulting in a much higher total tax rate as the Alaska Department of Revenue clearly shows. It was not a 2.5% increase.
Unlike in other states, each Alaskan actually benefitted from the oil tax increase, in the form of an annual rebate of at least $1200
Not all had a net benefit. Some, like myself, left to find employment in a more business friendly state. After moving back to Texas I hired a couple other people from the engineering department I had in Alaska. Within 2 years after the ACES changes, our depart was 1/3 the size it had been in early 2007.
It was more than just oil industry that is affected by those job losses. I don't buy pizza at Moose's Tooth anymore, I don't hire a fishing charter or go on a river cruise up there either.
Getting Alaska taxes more competitive with the rest of North America is important to Alaska's future, unless the population is ready to start paying an income tax, their future sources of revenue are in jeopardy under the current tax code.