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CBO report finds 'drill baby drill' in practice produces little revenue or oil (barf alert)
examiner ^ | august 18, 2012 | Lou Colagiovanni

Posted on 08/19/2012 9:44:13 AM PDT by lowbridge

It has been confirmed in a new report by the non-partisan Congressional Budget Office that the benefits of opening up and leasing protected federal landsforthe development of oil and natural gas are next to nothing. The estimated profit would be as little as $500 million a year which is only 0.7% of the total gross take of revenue of $150 billion that is expected to be generated over the next decade from leases already in place.

A favorite cheer of the Republican party has been "drill baby drill." Some would now say that talking point has been proven impotent.

The analyzed issue was the opening of ANWR, The Arctic National Wildlife Refuge, and off-shore drilling sites between 5 and 200 miles away from both coasts. Certain parts of the Outer Continental Shelf were also included in the analysis.

The United States allows individual corporations and private businesses to bid on leases for resource development already, with 70% of these areas already in use.

Once operational, which in some areas may take as long as 25 years, the report finds a revenue of $2 billion a year may be possible but not sustainable.

(Excerpt) Read more at examiner.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: cbo; chi; oil
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1 posted on 08/19/2012 9:44:24 AM PDT by lowbridge
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To: lowbridge
A favorite cheer of the Republican party has been "drill baby drill." Some would now say that talking point has been proven impotent.

Is this the same CBO that told us that Obamacare would save us money? Yeah, I guess once they say something, it is proven, case closed. What a putz.

2 posted on 08/19/2012 9:48:20 AM PDT by fhayek
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To: lowbridge

The cbo report:

http://www.cbo.gov/publication/43527


3 posted on 08/19/2012 9:49:22 AM PDT by lowbridge (Joe Biden: "Look, the Taliban per se is not our enemy.")
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To: lowbridge
If this is all true, why when there is a problem in the Middle East the price of oil sky rockets? If supply increases don't lower prices, why not just eliminate all oil imports & eliminate the gas tax? After all the Moron who wrote this article said that our own oil supply, now proved to be as substantial as Saudi Arabia or more, has NO EFFECT on price OR revenue from gas taxes.

Absolute Financial and Economic Sub-Moronic Idiots.

4 posted on 08/19/2012 9:50:16 AM PDT by Jim from C-Town (The government is rarely benevolent, often malevolent and never benign!)
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To: lowbridge

CBO needs to take one of those chartered government planes to North Dakota and see how the real world actually works.


5 posted on 08/19/2012 9:51:40 AM PDT by ilgipper
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To: lowbridge

That’s why ND has 3% unemployment? Riiiiight.


6 posted on 08/19/2012 9:53:06 AM PDT by struggle (http://killthegovernment.wordpress.com/)
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To: lowbridge
Also, lets not forget that It could take 10 - 25 years to bring that oil on line. The perpetual lie has been used for the last thirty years that I can remember, probably longer. The same was said during the Iran Hostage crisis and the oil embargo!

Just sick to death of the idiocy?

7 posted on 08/19/2012 9:54:21 AM PDT by Jim from C-Town (The government is rarely benevolent, often malevolent and never benign!)
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To: struggle
‘That’s why ND has 3% unemployment?’

And the ability to eliminate ALL property taxes if desired!

8 posted on 08/19/2012 9:55:41 AM PDT by Jim from C-Town (The government is rarely benevolent, often malevolent and never benign!)
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To: struggle
Excepting for Military and Federal buildings and parklands, there should be...."0"....Federal Lands.

The Feds have usurped both lands and fees from the states.

9 posted on 08/19/2012 9:58:54 AM PDT by Sacajaweau
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To: lowbridge
Government Bureacrat A: Drilling for Oil could not possibly make a profit...

Government Bureacrat B: There is no way we could have known Solyndra would not make a profit...

10 posted on 08/19/2012 10:00:50 AM PDT by douginthearmy
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To: lowbridge

Somebody should tell that to the State of North Dakota. They are suffering under the delusion that they’re in a boom.


11 posted on 08/19/2012 10:02:26 AM PDT by katana (Just my opinions)
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To: lowbridge

The most important thing us how it effects the US Government, not jobs, or the oil that’s pumped out.


12 posted on 08/19/2012 10:05:37 AM PDT by DesertRhino (I was standing with a rifle, waiting for soviet paratroopers, but communists just ran for office.)
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To: lowbridge
Why don't the CBO folks compare that with North Dakota?

At least there, when you lease mineral rights, the owner doesn't yank your permits to drill.

When you tell people they can't drill somewhere every time there is a Democrat in the White House, they are going to look elsewhere to make a living.

13 posted on 08/19/2012 10:05:45 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: lowbridge
From someone who worked 30 years in the oilfield (exploration and production), "FUCBO".
Nuff said.
14 posted on 08/19/2012 10:06:07 AM PDT by The Cajun (Sarah Palin, Mark Levin......Nuff said.)
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To: katana

http://www.startribune.com/business/166656556.html


15 posted on 08/19/2012 10:08:42 AM PDT by scooby321 (AMS)
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To: lowbridge

The CBO is about as non partisan as the Justice Department, the State Department, ATF , ICE, and the IRS.

Who are they kidding?


16 posted on 08/19/2012 10:09:21 AM PDT by Venturer
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To: lowbridge
“that the benefits of opening up and leasing protected federal landsforthe development of oil and natural gas are next to nothing. The estimated profit would be as little as $500 million a year which is only 0.7% of the total gross take of revenue of $150 billion that is expected to be generated over the next decade from leases already in place.”

If you define “benefits” as only what the Government collects in royalty taxes, and forget about the 150 billion in GDP and the high paying jobs that go with it.

Also don't forget that they are only scoring the Alaska national wildlife refuge.

Add in a stable domestic oil supply and any honest person can find more benefits that what they claim here.

17 posted on 08/19/2012 10:09:58 AM PDT by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: lowbridge
The author is correct that the ANWR royalty goes 90% to Alaska and 10% to the feds. But, if it is drilling on federal lands in other states, the royalty split is 50-50.

Certainly, some members of congress resent that Alaska gets 90% when their state gets only 50% and that plays a part into the question of opening ANWR up to drilling.

As for offshore, any new drilling will include royalty sharing with the state.

In GOMESA 2006, TX, LA, MS, and AL were given royalty sharing. Offshore drilling Virginia will be predicated on royalty sharing. Likewise N Carolina, Maryland, and Florida if and when those states get drilled offshore

18 posted on 08/19/2012 10:12:25 AM PDT by Ben Ficklin
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To: Sacajaweau
Not quite correct. The United States acquired vast territories that were then organized, surveyed and put up for sale.

As those lands and resources were sold, the area then fell within the state domain.

As you may have noticed, people didn't buy an awful lot of it!

Every now and then someone will claim that many Western states that were brought into the union didn't get the same deal as the older Eastern states.

Actually, Virginia and other states relinquished their Western land claims to their new federal government. It organized and surveyed those lands ~ then awarded them to Revolutionary War patent holders and to private individuals who bought vast tracts with the idea of developing them with roads and trails, and then selling them to new settlers.

The same thing was done with much of the Louisiana Territory, and it's at that point they discovered there's some stuff that you just can't get people to buy!

In fact, some of the later territories acquired directly from Spain and their successor, Mexico, and Russia, were of little use beyond testing nuclear warheads ~ not exactly one of your more regular civilian pursuits eh!

So, no, the new states were treated the same as the original states, and by the ones organized in the 1800s. It's just nobody bought stuff.

Currently were in a situation where technology is allowing us to make use of a lot of the more desolate areas ~ but even then the folks who want the oil aren't buying it ~ they want to rent it!

Not likely folks in the Eastern states would be happy with the federales just giving that land away to those Western states ~ not only wouldn't be prudent, I'd like my money back first ~ just give me a piece of the Bakken Formation ~ I'll be happy!

19 posted on 08/19/2012 10:16:18 AM PDT by muawiyah
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To: lowbridge

One of the things I’ve learned since Barack the Kenyan rose to power is that the CBO is made up of a bunch of incompetent buffoons.


20 posted on 08/19/2012 10:17:36 AM PDT by FlingWingFlyer (Had enough of the freaks running the show yet?)
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To: lowbridge
The only thing one needs to know about CBO studies is that they are done based on the assumptions given them by the requester, making most studies worthless political propaganda.
21 posted on 08/19/2012 10:19:47 AM PDT by gov_bean_ counter (Too many thinking Freepers have left the building...)
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To: katana; struggle
In ND the drilling is on private land so neither the feds or the state earn a royalty.

OTOH, that is economic activity that generates income and the feds levy an income tax on that.

22 posted on 08/19/2012 10:21:03 AM PDT by Ben Ficklin
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To: Ben Ficklin

And one reason gas is so prices are so high? not enough refineries. all the oil in the world won’t do you any good if you can’t process it.


23 posted on 08/19/2012 10:24:13 AM PDT by Mmogamer (I refudiate the lamestream media, leftists and their prevaricutions.)
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To: Ben Ficklin

And one reason gas prices are so high? Not enough refineries. All the oil in the world won’t do you any good if you can’t process it.


24 posted on 08/19/2012 10:24:59 AM PDT by Mmogamer (I refudiate the lamestream media, leftists and their prevaricutions.)
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To: Mmogamer

As you may or may not know, the oil companies/refiners are exporting record amounts of gasoline and diesel. The most since WW 2.


25 posted on 08/19/2012 10:29:20 AM PDT by Ben Ficklin
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To: Ben Ficklin

Royalty no but the state does get a severance tax per barrel of oil and unit of gas produced on private land.


26 posted on 08/19/2012 10:31:47 AM PDT by Dusty Road
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To: lowbridge

Good. I don’t want drilling done to benefit the gov’t. I want it done to benefit our economy.


27 posted on 08/19/2012 10:38:55 AM PDT by vbmoneyspender
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To: lowbridge

Tell that to N Dakota.


28 posted on 08/19/2012 10:50:39 AM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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To: Georgia Girl 2

CBO says pregnancy unproductive, cites hundreds of examples of women who have been pregnant for half a year with no babies to show for it...


29 posted on 08/19/2012 10:57:59 AM PDT by null and void (Day 1308 of our ObamaVacation from reality - Obama, a queer and present danger)
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To: lowbridge

Directly from the Mineral Management Service(MMS)

Revenues collected from onshore and offshore Federal lands by MMS are one of the largest sources of non-tax revenue to the Federal government. In 2009, MMS disbursed $10.7 billion in mineral revenues to States; the Office of the Special Trustee for American Indians
for distribution to Indian Tribes and individual owners; other Federal agencies; and U.S. Treasury accounts.

• $2.0 billion directly to states and eligible political subdivisions, such as counties and parishes
• $6.05 billion to the U.S. Treasury
• $538 million to 34 American Indian Tribes and 30,000 individual American Indian mineral owners
• $1.53 billion to the Reclamation Fund for water projects
• $892 million to the Land & Water Conservation Fund
• $150 million to the Historic Preservation Fund


30 posted on 08/19/2012 11:53:55 AM PDT by smartyaz
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To: lowbridge

Same old stupid argument: “Once operational, which in some areas may take as long as 25 years,...”

So its not worth it because it take a long time to make money on this. What about caring where we are in 10 years?

So it cant solve the whole problem, so lets not even try to make it part of a biger solution?

Its funny, but we heard these lame arguments back in 1990s over ANWR. The naysayers said it would take 10 years so it wasnt worth it; it would only be 1/2 million barrels a day and that’s just 3% of our energy use ... that was 15 years ago. We could use that oil right about now.

I do hope we get smarter about this so in 2024 we are energy independent instead of having dumb arguments that stop us from doing the obvious right thing. Drill here, drill now!


31 posted on 08/19/2012 12:03:18 PM PDT by WOSG (REPEAL AND REPLACE OBAMA. He stole America’s promise!)
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To: lowbridge
What is this guy's deal?

Production from newly opened areas over the 2023–2035 period would be far less than the amounts produced by current operations in the Gulf of Mexico.

That's what is on the CBO website, that's not in the report...
Potential Budgetary Effects of Immediately Opening Most Federal Lands to Oil and Gas Leasing

Here is the only instance of "newly" in the pdf...

For this analysis, CBO used EIA’s estimates of the potential for new areas to produce oil or gas after 2022. EIA expects that any initial production from newly opened areas in the Atlantic, Pacific, and eastern Gulf of Mexico would be far less than is produced by current operations in the Gulf of Mexico (see Figure 2).

And the report also says this about "after 2022"...

CBO does not have enough information to predict with specificity what would occur after 2022 either under current law or under the proposal. Under the proposal, income from royalties might be greater over the 2023–2035 period and smaller in subsequent years than under current law. But the proposal also might reduce the amount of bonus payments received between 2023 and 2035 because some of them would be collected sooner. Such long-term predictions are clouded by the inherent uncertainty surrounding market prices for oil and natural gas, state and local policies regarding resource development, and the potential impact of changes in technology.

One should really read the actual report before writing about it instead of reading a website about the report and writing about that.

Drill, baby, drill!

32 posted on 08/19/2012 12:47:24 PM PDT by philman_36 (Pride breakfasted with plenty, dined with poverty, and supped with infamy. Benjamin Franklin)
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To: lowbridge
BTW, regarding that one particular sentence in the actual report...
For this analysis, CBO used EIA’s estimates of the potential for new areas to produce oil or gas after 2022.
Remember this... According to estimates of potential resources by the Department of Energy’s Energy Information Administration (EIA) and taking into account a range of probable oil prices, gross royalties from leasing in ANWR would probably total between $25 billion and $50 billion (in 2010 dollars) during the 2023–2035 period, or roughly $2 billion to $4 billion a year. (By comparison, CBO estimates that under current law, gross receipts from all federal oil and gas leasing activities in 2022 will be about $12 billion, in 2010 dollars.) The projected royalties from leasing in ANWR are very uncertain, however, as they depend both on the amount of oil that might be produced and on future oil prices. Any royalties collected from development in ANWR would be divided between Alaska and the federal government according to a formula that would be set by the authorizing legislation.

This article sounds to me like somebody is "putting a thumb on the scale".

33 posted on 08/19/2012 12:56:41 PM PDT by philman_36 (Pride breakfasted with plenty, dined with poverty, and supped with infamy. Benjamin Franklin)
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To: lowbridge

BS!!!

Lou Colagiovanni, Detroit Liberal Examiner

Lou Colagiovanni is an activist, journalist, and political consultant from the motor city Detroit, Michigan. He is also the founder of the popular political discussion group, “We Survived Bush. You Will Survive Obama.” You may contact Lou at lcolagiovanni@consultant.com or wsbyso@activist.com.


34 posted on 08/19/2012 1:07:25 PM PDT by kcvl
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To: lowbridge

Garbage in, garbage out from pencil pushers and a liar who wrote this crap.


35 posted on 08/19/2012 1:23:26 PM PDT by kcvl
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To: lowbridge

Garbage in, garbage out from pencil pushers and a liar who wrote this crap.

first of all...Lou is talking about income to the GOVERNMENT not anyone else. and the 70% already leased doesn’t mean anything If the other 30% is where the oil is. Idiots...or think we are.


36 posted on 08/19/2012 1:26:15 PM PDT by kcvl
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To: fhayek

I’ve been saying this inconvienent truth. Drilling for oil benefits the oil company doing the drilling (not necessarily an American oil company) and does not make sure the US is oil independent because the oil is sold on the global market; not to the US. With China’s growing need for oil, it will probably be gobbled up by our enslaved friends who recieved our industry, jobs and economy. The lease charge is not worth giving up the oil.

Globalism needs to go. It’s humanity rush down the toilet to enslavement.


37 posted on 08/19/2012 1:47:49 PM PDT by SaraJohnson
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To: Beagle8U

Why do you say this oil supply is “domestic” when oil is sold on the global market-not in America. Also, the competition to drill our oil would be international - not necessarily American.

The way our politicans, government and elite operate and think within the framework of globalism, is not the way you assume it to be. We get the lease and the mess. We lose our resources. The “global” thing gets the profit and the oil.


38 posted on 08/19/2012 1:53:21 PM PDT by SaraJohnson
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To: Jim from C-Town

That is correct. This story is nonsensical. There are about 5000 wells in the Bakken and they cost 6 to 12 millions a pop. They are doing 240 wells a month - will do 40,000. Do the math.


39 posted on 08/19/2012 4:38:52 PM PDT by Titus-Maximus (Light from Light)
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To: lowbridge

This just in from the King, this month is not August but actually December.


40 posted on 08/20/2012 4:43:03 AM PDT by jmaroneps37 (Conservatism is truth. Liberalism is lies.)
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To: Ben Ficklin
The author is correct that the ANWR royalty goes 90% to Alaska and 10% to the feds.

Any link for more information on that? Thanks

41 posted on 08/20/2012 5:32:22 AM PDT by thackney (life is fragile, handle with prayer)
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To: lowbridge

I have invested in a decent road ready travel trailer to haul from Alaska to North Dakota because of the lack of decent wages here in Alaska, since the start of the year I have only grossed $15k, nowhere near my normal yearly wages.

The problem is that you need affordable lodging there. I can tolerate the winter if I had to, its all about going to where the work is.

I used to be an oil field mechanic in Texas back in 1984.


42 posted on 08/20/2012 5:37:12 AM PDT by Eye of Unk (Vote for Sarah Palin, she is the cure to the disease and infection of socialism.)
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To: Ben Ficklin
The CBO report states the following:

http://www.cbo.gov/publication/43527

As with bonus payments, between 50 percent and 90 percent of those receipts would be paid to the state of Alaska, if specifications in the authorizing legislation were similar to those in recent legislation.

This legislation has not happened yet.

43 posted on 08/20/2012 5:39:21 AM PDT by thackney (life is fragile, handle with prayer)
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To: SaraJohnson
If the mid-east falls apart with wars etc we can control any export of domestically drilled oil.

It is foolish to argue against domestic drilling by using the ‘global market ruse.

There is a global market for timber too, but we still control our own.

44 posted on 08/20/2012 5:43:23 AM PDT by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: Ben Ficklin
In ND the drilling is on private land so neither the feds or the state earn a royalty.

They don't collect a royalty but the oil industry pays a 6.5 percent extraction tax and a 5 percent gross production tax to the state.

45 posted on 08/20/2012 5:45:11 AM PDT by thackney (life is fragile, handle with prayer)
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To: Mmogamer
And one reason gas is so prices are so high? not enough refineries.

The US has a surplus of refinery capacity. We refine more petroleum than we use.

Number and Capacity of Petroleum Refineries
http://www.eia.gov/dnav/pet/pet_pnp_cap1_dcu_nus_a.htm
Current Refinery Capacity in in US = 17,322,178 Barrels per Day

Petroleum Product Supplied (sold) in US
http://www.eia.gov/dnav/pet/pet_cons_psup_dc_nus_mbblpd_m.htm

Current US consumption of refined products = 16,539,000 BPD

We haven't built any new refineries lately, but we have been expanding and upgrading the existing ones for decades.

46 posted on 08/20/2012 5:49:24 AM PDT by thackney (life is fragile, handle with prayer)
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To: Ben Ficklin

Sorry, I forgot my link on the tax rates.

http://www.nd.gov/tax/misc/faq/oilgas/index.html


47 posted on 08/20/2012 5:53:56 AM PDT by thackney (life is fragile, handle with prayer)
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To: gov_bean_ counter

Correct and with the manipulative benefit of the words “non-partisan” tacked on.

Many of the CBO requests for study are simply to confirm what the requester knows and are designed to give an answer that the politician wants.


48 posted on 08/20/2012 9:10:36 PM PDT by 1010RD (First, Do No Harm)
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To: thackney
"Any link for more info?"

I got that from you. You probably don't remember that but a couple of years I quizzed you about Alaska's share of royalties.

49 posted on 08/21/2012 5:28:26 AM PDT by Ben Ficklin
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To: Ben Ficklin

No. That is not true. That 90% was based upon applying laws more recently enacted for the Gulf Coast and “hoping” the same would be done for Alaska.

Read above for the current basis.


50 posted on 08/21/2012 5:32:10 AM PDT by thackney (life is fragile, handle with prayer)
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