Skip to comments.Alaska's per-capita GDP is 50% higher than US average
Posted on 10/26/2011 9:11:49 AM PDT by thackney
Alaska had a $49 billion economy last year, with the largest single piece of that coming from oil and mining.
... oil and gas represented 25 percent of Alaska's GDP last year. He says this shows how far-reaching an impact that oil has in the state, given direct employment by the oil and gas industry makes up just 4 percent of total employment in the state.
(Excerpt) Read more at adn.com ...
That is the big part of the reason Alaska oil/gas isn't booming like Texas, North Dakota and Pennsylvania.
Taxes are part of it, and Obama Admin obstructionism is part of it as well.
Yes, they have been under a double-whammy since the feds control ~60% of the land.
But the areas like the foothills and expanding the Cook Inlet and North Slope to source rock like what has happened in the Permian Basin is more held back by taxes.
Report has harsh criticism for Alaska’s tax structure
Oct 23, 2011
An independent study critical of Alaskas oil tax structure as well as efforts being made to overhaul it has received mixed reviews from some lawmakers leading the debate.
includes strong criticisms for the current tax system, stating it has serious shortcomings that include poor incentives for extracting heavy oil and natural gas.
It also notes that Alaska has boosted its take from oil production taxes while other countries, such as Canada and Greenland, have lowered theirs.
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Alaskas oil tax is among the highest in the world. 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.
Considering the cost of drilling in the hostile onshore and offshore fields, Alaska had better be careful. They are getting dangerously close to the law of diminishing returns.
Was this the case (82%) under Palin or was it changed since she left?
Then she signed the law.
Now we have higher unemployment.
Just a side note - over half (50+%) of the population works at a tax-support job - Feds, State, Local.
Another reason it is so expensive to live here.
Palin is the only Gov I've seen hold Big Oil's feet to the fire and lock up a few of our corrupt Republicans and I thank her for doing so.
I think most Alaskans would say leave the taxes alone for once, brings in too much corruption into state politics. If the oil industry doesn't want our oil, then they don't want it; they sure keep trying to change the tax structure awful hard year after year.
I read all the figures stating what the oil industry is paying in oil taxes around the world (AK is not the highest) ect but figures often lie. I think most Alaskan Republicans also realize the truth, been watching the game too long.
I really think the problem is that the oil industry can't accept the fact that Alaska and the Alaskan People own the oil wealth, the only state set up that way in state constitution. I do think most Alaskans agree with what I'm saying. Even if we gave the oil away for free, they'd want the state to be paying them to get that filthy oil out of the ground. So no offense TH, I just don't see the same picture (after 20 years living here) that you see.
I don't see any of them complaining that the royalties are too high. That is the fee paid to the owners of the oil regardless where it comes. Alaska royalties are in line with other areas.
The problem is that taxes on top of the royalties. Those are taxes paid even if the oil is owned by federal or by the natives.
Taxes and Royalties are not the same thing. Royalties are selling a commodity, price to exchange ownership. Taxes are paying extra for the privilege of supporting the state.
There are 497 drilling rigs working in Canada, there are 9 in Alaska. You do the math. The people that invest their dollars in producing oil have already done theirs.
Alaska doesn't lack for resources, but there are limits to how much you can choke the golden goose.
ACES tax plan was put in place by Governor Palin with the help of the legislature. It was one of the main items she run on.
The current governor, Parnell has been trying for a while to get it reduced down to reality.
I know our perspective differ. Mine came from working in the Alaska Oil industry while the ACES tax went into place. First the clients pulled the jobs still in the planning and engineering phase, then we started laying people off. I moved back to Texas and hired some of the people that worked for me in Alaska.
(I know we have been through this before, it is more for anyone one else reading the thread) We disagree on this topic but I respect your opinion.
I would ask that you consider however, what is going on in the lower 48 oil industry and why it is not happening in Alaska. What is different? More than cold because North Dakota is not a summer beach for half the year, South Texas ain't much more pleasant the other half.
Here is what the rest of us are seeing:
I know the feds put a lot of restriction on exploring new area under their control. But Alaska has as much non-fed land as California, North Dakota and Pennsylvania combined.
Concerning your chart, is there a generally accepted ratio of holes made to producing wells?
I ask because dry holes and wells with too little potential to complete are almost as costly as those that produce. This adds greatly to the cost of a barrel of oil and affects the “obscene” profits of the oil companies. It also enters the tax picture when we talk about deductions.
As technology has improved, so has the ratio of productive versus dry holes.
If you want to see how that has changed, I would look at the ratio of exploratory wells versus dry holes only.
The development wells are from only after the field is determined. With the advances in steerable horizontal drilling, the number of wells required to cover an area has gone down greatly.