There's a widespread perception that declining oil production on the North Slope, which is lower than previous expectations, is due to depleting reservoirs. There's another explanation.
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The major North Slope oil producers are covertly suppressing production volumes to give credence to their rhetoric that lower taxes are needed to provide incentives for further investments in oil and gas exploration, development and production on the North Slope to increase domestic oil reserves and supplies. The state does not have the expertise or insight to apprehend or counteract this slick undercover strategy.
Because of the much higher prices they have been gouging consumers for petroleum products over the past couple years, the major oil companies are able to absorb lower self-imposed production volumes on the North Slope without compromising their obscene profits. Deliberately lowering supply in order to raise consumer prices is a long-standing industry practice.
At the same time, they are able to conserve the withheld production for the future, when oil prices will be even higher, but their taxes lower, assuming the state Legislature succumbs to their crafty strategy. One wonders whether the Murkowski administration is naively oblivious to, or callously complicit with it.
North East, Pa.
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