State's oil shouldn't be given away cheaply

Posted: Tuesday, November 06, 2007

Alaska and former Rep. Vic Kohring, the wannabe champion of the oil industry and free enterprise, have irreconcilable differences.

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Kohring's free-market point of view apparently means that Alaska should provide the oil industry with free or nearly free petroleum inventory, so that it may return to its shareholders record profits, year after year.

This windfall is historically due to the largess of elected officials such as Kohring whose motives may lean more toward self-interest than the ideology they espouse. Whether motivated by material gain or political theory, this largess is at the expense of the owners of Alaska's natural resources, the state's citizens.

This really shouldn't be called a tax, as the oil companies are buying oil in the ground at wholesale prices from the state of Alaska.

The industry is, and should be, compensated well for moving this oil to market. That Alaska's citizens derive revenue and its benefits from the state's oil shouldn't mean the Legislature should give it away at liquidation prices. The time has come for our elected officials to discontinue this genial looting of Alaska by the oil industry.

While the producers need to know with certainty what crude oil will cost them. Alaska needs to know with the same certainty that the revenues we receive for every barrel that comes from every wellhead on our property is a fair and equitable share. If certainty is truly the benchmark needed for industry participation, it seems that a fair percentage on gross production lays it out plainly without unforeseen consequence or confusing administrative contortions required.

Make no mistake, these companies are renting, not buying, and when the resources are gone, so are they. That's not bad, it is the nature of Kohring's free-market system and one with which I can agree.

All of the industry's spin and public relations firms in the world can't put the oil back in the ground for us (or them) to sell again; it's simply gone.

It's time that we raise the rent against the day that our oil fields will sit vacant.

Philip Rolfe


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