So what is the problem? Alaska’s citizens own all its oil and gas resources which energy companies extract and sell under license for profit. If that profit isn’t profitable (no pun intended), you folks wouldn’t do business there, and your complaint would be moot!
You would do Alaska, and yourselves, better to lobby against unrealistic restraints by the bam regime on exploration and development of those resources. I wish you all the best in that regard!
JC
For full disclosure, I have a son and grand children in Western Alaska and the Alaska fund is critical in directly distributing proceeds from oil and gas sales to citizens throughout the state. I believe this type of fund is unique to Alaska and and benefits citizens directly, not the state which could merely exploit it for political purposes. Many natives that live the subsistence lifestyle absolutely depend on this for necessities like fuel oil, gasoline, boats/motors and such requiring cash to acquire. It’s a tough life, real jobs that pay wages are very scarce and it’s their resources to start with. I would demand more of a share myself!!
That is the point. While business is booming in Canada and the lower 48, the amount of investment for new projects has been dismal in Alaska. The projects here since 2007 were at first completing the ones already substantially underway (equipment already ordered, designs complete or near complete) and then a switch to maintenance type projects and not designed to produced more oil.
That is why the engineering and design groups that lay out new capital projects dwindled to less than half in size.
The problem is not that state ownership of the oil/gas minerial rights. The royalties for that are competitive with the rest of North America.
The problem is the excessive taxes on top of the royalty rights. Some tax is expected and necessary for the state to handle their part of that business.
But when it cost 45% in total taxes/royalties/etc to produce in the Gulf of Mexico and 85% in Alaska, you have got to recognize something is way out of whack.
Alaska fund is critical in directly distributing proceeds from oil and gas sales
The PFD is strickly from the royalties and the interest those investment earn. I am not talking about touching or changing any of that. I am strickly talking about ACES, the money from that is NOT distributed to the citizens, it is only for funding the government.
On of the primary reasons there is now a push to go offshore Alaska into federal waters is that none of ACES or the Alaskan Royalties that add to the Permanent Fund would apply.
Alaska has been strangling their golden goose. And the oil companies that feed that goose have been sending their feed to Canada, North Dakota, Texas and others. The return on investment is just too low under the present tax structure.
There is a lot of hope that enough Alaskans have recognized this. There are Alaskans I know that are now working in North Dakota because that is where the growth in jobs are.
I forgot to add a link I suggest to all that want to learn more about how ACES changed the tax structure, why it is not competitive with other locations, and how it does NOT touch the permanent fund or change the way and rate dollars flow into the fund.
http://www.makealaskacompetitive.com/learn-more/
If anything, getting the tax more in line with the lower 48 and Canada would increase cash flow to the permanent fund with increased oil production. The percentage of $/barrel would not change.