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Recently, across Alaska, there has been a media ad blitz, plus legislators, contractors, and others speaking for Alaska oil producers, and all have the same message theme - namely, "don't let the state tax the oil producers out of business!" Fat chance.
The Alaska oil producers' profits have skyrocketed in eight years. They were making a profit of $2 to $3 per barrel when oil was selling for about $9 per barrel in 1998. Using the oil producers' numbers of 900,000 barrels of oil being produced per day (today) at $60 a barrel, that's an annual profit of approximately $17 billion in 2006. They say they need to invest about $1.5 billion annually to keep the oil draw down decline to less than 10 percent. So, if they do invest $1.5 billion for exploration and new oil extraction methods, and the oil pumping still declines 10 percent, their profits will be only about $14 billion-plus in 2007. They'll be crying all the way to the bank, along with their lobbyists, legislative shills, and other hangers-on.
And, while the oil producers are paying out a few million dollars to blitz the media to complain about their state taxes in 2006, the same oil producers are sitting on a multibillion-dollar reserve of natural gas, which they will not market until they agree on a new natural gas pipeline to the Lower 48 (more mega-profits).
For all who are involved, to try overtly to convince (or coerce?) the constitutional owners of these resources (Alaskans) that the oil-gas producers will be hurt by sharing a reasonable percentage of their inordinate profits over the next 30 to 40 years, is an insult. The implication that they could no longer afford to explore for new resources makes no sense at all, when new exploration and research and development are how their worldwide business is sustained.
In addition, every Alaskan should publicly demand an all-Alaska natural gas pipeline be built now in the existing, Alaska-owned trans-Alaska pipeline to Valdez. Marketing our natural gas out of state and utilizing it in state is critical to Alaska's future.
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