Big Oil has writer convinced he's wrong

Letter to the editor

Posted: Tuesday, May 16, 2006

Well, after getting my third or fourth anonymous recorded phone call urging me to call my legislator and ask him to support a 10 to 15 percent petroleum production tax, after getting a flyer in the mail from Alaska's Future (whoever they may be) asking me to do the same thing, after seeing countless pleas in the newspaper and on TV to the same effect (from the oil companies and their supporters), I've decided that Big Oil must be right!

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Taxes are bad for oil production! So why stop with what Big Oil is asking for? Why not repeal the production tax altogether, as well as the corporate income tax (at least as it applies to oil production companies)? Why not give the oil companies our royalty oil? Surely, if they have to pay us nothing at all to take our oil, they will come running and create thousands of jobs.

But two things puzzle me. Oil prices are at an all-time high. I paid $3.20 a gallon to fill my tank this morning. And the oil companies' production costs remain stable even as the price that they get for our oil skyrockets. Indeed, I heard something about ExxonMobil making $8 billion in profits in the first three months of this year. (Maybe that was $8 million. No company could earn $8 billion in three months, could it? That's more than the yearly gross national product of many countries.)

So why shouldn't the state ask the oil industry to share its largesse with the people who own the oil? And if the price of oil is so high, aren't the companies going to come and explore even if they do have to pay the state more money?

But Big Oil has convinced me that my doubts must be wrong! I know now that Big Oil has only Alaska's best interests at heart.

John Gaguine


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