You are hereAlaska, where no one takes advantage of nobody
Alaska, where no one takes advantage of nobody
By Dan Fagan
Publisher
The Alaska Standard
Alaska, where no one takes advantage of nobody. There’s your new state motto.
We’re standing our ground in the final frontier. There is no way no how that the evils in Big Oil are going to get one over on us. In Alaska we have, if you will excuse my language, made the oil industry our bitch.
We’ve let the industry know who is boss by becoming one of the highest taxing oil and gas places on the globe. Our marginal rate can be as high as 87 percent at certain prices.
Big Oil: You mean I only get to keep 13 cents of every dollar I earn?
State of Alaska: That’s right and you’ll like it. Now go get me some coffee!
And then there is ACES which says to the industry you must commit to investing hundreds of billions of dollars to build a pipeline but you have no say in how the pipeline is run or built. In fact we won’t even tell you how much our take will be over the years.
Big Oil: So we pay for the pipeline and take all the risk and we get no say and you won’t even tell us how much it will cost us to take this risk?
State of Alaska: Where’s my damn coffee?
Our crusade to make sure no one gets one over on us has not escaped the attention of media covering business and investment.
Forbes magazine recently ran a story entitled “Alaska Suffering From Cutbacks”
The December 1st story reports,
“Although Alaska has been blessed with an abundance of oil and natural gas that has supplied the markets for generations, the exploration and production industry has shifted its capital spending to other areas.
“BP and Conoco Phillips have reduced their budgets for upstream development in 2010 in Alaska. BP cut its capital expenditures from $1 billion in 2009 down to $850 million for 2010. Conoco Phillips is also cutting back, and has no exploratory wells planned for 2010. A recent lease held by the state for North Slope properties drew little interest."
The Forbes story goes onto to report high taxes are one of the major reasons the publicly traded oil and gas industry has lost interest in Alaska.
The Forbes article concludes,
“Alaska has billions of barrels of oil and natural gas waiting to be developed, but unfortunately for residents of that state, the exploration and production industry has found other areas it would rather use its precious capital to invest in.”
So in our quest to make sure no one gets one over on us we have driven away our only significant taxpayer from investing in the future of our state.
Governor Sean Parnell says he needs to see demonstrative evidence the state’s high taxes are driving away investment before changing things.
Mr. Parnell, maybe you should pick up the latest copy of Forbes magazine.
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The oil companies are doing well in the lower 48. Bemidji, Minnesota is having housing shortages trying to accomodate pipeline workers who are building a line that will bring oil sands oil from Alberta to the Midwest. They're extracting gas from all over the country. It's close to major markets. Why does anyone need distant Alaska gas and oil?
For too long too many Alaskans have enjoyed benefits that oil companies have provided. Why so many Alaskans hate them is beyond me. I remember the days when the major employment for Alaskans was Vietnam and forest fire fighting. If anyone has benefitted from oil money, it is the raging liberals. Fancy ski trails, PERS/TERS, COLA raises, outrageous labor agreements and the list goes on and on. Why do they hate the oil companies so much? It has to be mental illness. Spend the last of the oil revenues on nut houses and commit all the liberals!
It's not just the liberals who are insane. Consider Palin and her rabid followers and Parnel continuing her anti-oil company policies with Irwin and Rutherford. Consider Republicans in the legislature like Carl Gatto, Gene Therriault, and Mike Kelly. Plenty of blame to go around.
i think you might be the biggest idiot ever to post on a blog.
Alaska's resources are world class. that means you can't just pick up your toys and go somewhere else to get the same economic opportunity.
and if, as you say, when "private industry spends money in this state it translates into actual goods and services being bought and sold which creates jobs" but (again according to the acorliss brain trust) "when government makes the same purchase they do so at a premium" and somehow, through the wizardry of acorliss, that "reduces the amount of goods or services being rendered", well I just don't know which level of elementry school to refer you back to.
spending by industry = goods and services spending by gov't = MORE money ("premium"), but somehow LESS goods and services. hmmmmmmm.
and Dan, Gov. Parnell has told them that they need to demonstrate (mathematically) the need for modification of the tax. that doesn't mean make a bunch of noise about reducing workforce or drilling fewer wells. it means stop the rhetorical crap and have an adult conversation about numbers.
just go home, go back to Louisiana or wherever you're from and leave us to sort out our business
Ah, so you can't actually refute anything I've said with facts so you simply resort to slander. Since you appear to be a bit slower than most let me spell it out for you.
If private industry spends $1 million on some miscellanious widgets you can be sure they'll get more widgets for the dollar than if the government spends the same amount. I've witnessed this countless times during procurement processes in the military. Governments are typically more hamstrung with who they can do business with due to contractual or political obligations. All of which reduces competitive pressures on the selling company to offer a much better price to the government.
When the government is typically paying a higher per-unit cost how does that benefit the economy as a whole? That only benefits the profit margins of a single company (typically the retail layer). But when you're actually transferring actual wealth (in the form of a commodity) you benefit the entire pipeline, from retail all the way through manufacturing and raw materials development. That means real multiple jobs rather than a single sales job.
I'm not sure how much more clearly I can say this. I've tried to idiot-proof this concept, but as you certainly prove, there's always a better idiot right around the corner. Step away from the shallow end of the gene pool.
you're still an idiot.
are those "facts" that you shared with us? in my end of the gene pool that's called "an example" and it uses completely fictional numbers.
private business does not spend money on infrastructure, government does. giving away one dollar or a million dollars to industry because they whine and whimper and threaten to go play somewhere else doesn't do a thing to help fund government (read that as schools, hospitals, roads, police, fire departments).
you're welcome to pay more taxes in order to subsidize the wealthiest companies on earth if you like, i just don't think it's necessary. the resources themselves are the issue - we have them here and we are making sure we're treated fairly. not sure what it is about that concept that you're struggling with.
i'm certain you can't say it any more clearly. but that's okay, little is expected of you. as for idiot proofing, that may be the perfect occupation for you.
If you are an oil company and you have 10 billion dollars to invest in drilling for oil this year, where would you spend it? If you are a rational business person you will spend it where you can get the best return for each dollar invested.
If you have one location where the lift cost (that is the total of everything to get the oil out of the ground) plus the transportation cost is $45.00 per barrel and the comparable cost of getting that same barrel of oil from another location is $25.00 per barrel, you would invest in the cheaper location. Your boss, your management and your company's owners would demand that of you.
Every oil province in the world has taxes of various types to pay. Alaska is no different except that it is the highest tax in the world. At $90.00 per barrel the government take is about $70.00. That means the government gets $70.00 per barrel and the oil company that produced it gets $20.00.
When you add that to the very high Alaska lift cost (relative to the rest of the world), it makes no sense as an oil company to invest in projects where the costs are multiple times higher than other locations. At the end of the day, it is the same oil; ours (Alaskan) just costs a hell of a lot more.
I can't help you if you don't see it this way, but like it or not that is our reality. Alaska is by far the highest cost oil province in the world, (lift cost + transportation + gov take) and until we make ourselves more competitive to other places, we will not get the investments required to develop our world class resources.
Wake up people, unless you want to go back to the way things were before the pipeline came online, we need to create an environment where the oil companies can actually win.
Don't waste time argueing with goofy guys like Andy.
He has got to be a school teacher, state employee, muni employee or IBEW based on his anger and lack of understanding of how the market and economies work. I suspect he is a member of one of these groups as they typically dont understand the free market they are not part of the private sector, they live in a la-la land of special treatment and job security. These folks tend to have no independent spirit and use the worst aspects of our political and legal system to suck the life out of the hard working and job producing sectors of our state and country.
At the very least I promise you that Andy has never worked in the private sector or he would not continue with his silly big government worship.
You're hopeless, but perhaps you can pull your head out long enough to consider something: if the government drives an industry out then there's no or less money going into the government coffers, at which point they'll come after us, the citizens. You'd think self interest would be enough for you to get a clue.
And, gee, my wife and I pulled my daughter out of ASD last year because of their poor academic performance and social indoctrination. Real great bang for the government buck there... And, oh, yeah, both hospitals I've used over the years are both private entities... Huh. All those taxes I pay are really benefiting me...
Given how I can't seem to get you to see the light, I'd say I'm an abject failure at idiot proofing. You're a far better idiot than I am equipped to deal with.
Now that I think about this, let's call a spade a spade. Your kind is very quick to call those of us who question Palin's record as "haters", but isn't that exactly what you are? You simply hate industrialists and capitalists, and you are obviously all for bigger, more wasteful government.
Well, that settles that. You're definitely not a conservative of any stripe. You fit in well with the pro-Palin crowd.
and so there you have it, it took you several rounds to get there but you finally did. this is all about Palin for you. i didn't mention Palin once, but you...well, eventually everyone's true colors come through.
until you and others like you ratchet back the emotion, stop the rage and anger and look at things strictly with regard to what's best for this state, you're condemned to the echo chamber of fagan / halcro / ram-her-ass / and rydell.
i'm conservative. i have a lengthy history in the private sector. i have amassed a considerable net worth. i am old (read- not idealistic). and i've never in my entire life used the ridiculous street slang "haters".
I renew my charge that you are an idiot. you don't think for yourself. everything you think you do understand has been spoon fed to you by people like the folks listed above, but you're too dense to understand that those guys all have a vested interest in keeping you angry. they're not educators and they're not problem solvers. they're motivated by their economic self interest.
step outside the echo chamber, kid. talk to someone that disagrees with you so that you can test the merits of your arguments. you (you specifically) would find that your position has no legs, no traction outside a room full of people shouting "hell, yeah!" everytime you use the word "liberal" or "palin" or "taxes" in a pejorative way. you're terrified to learn that the ideological world view handed to you by the folks that do your thinking for you is built of tissue and doesn't snap neatly in place here in Alaska where frankly it's just different.
what works in texas or nevada or louisiana doesn't work here. if it's that type of set up you're looking for, don't change the way we do things here in my home, just haul you bones down to one of the places that does things your way and leave the rest of us to work through what's best for us.
You can renew your charge all you want, but you've done nothing to support your argument. If anything, you continue to prove your own ignorance. I'm not exactly a spring chicken myself, but at least I seem to have learnt a few things in my time, unlike you. I've given you the basis for my argument that our community is better served by keeping money in the private sector rather than let government waste it for much less effect, and you have no answer for it. So, who's not thinking for themselves?
Step outside of your limited, moronic perspective. Based on your arguments there is no way you can be considered conservative. No conservative believes that government has an innate right to dig into our wallets without check. What our state government is doing goes way beyond simply funding basic infrastructure, and what they're doing to the oil industry is borderline extortion.
And, yes, this is about Palin. Since the topic concerns legislation that she personally championed with the support of Democrats that should be obvious. And it also concerns Gov. Parnell who is continuing the idiocy. Pardon me for being bitter. I supported her and was ultimately betrayed when her actions failed to match her rhetoric.
You keep trying to guess where I'm from, and you still haven't got it remotely close. I came to Alaska in '96 from New Hampshire, Live Free or Die. Unfortunately for NH, they've been infiltrated and poisoned by the surrounding socialist states of Maine, Vermont, and Massachusetts. Even more unfortunately for me, however, now Alaska is starting to descend into the same death spiral. And with your help, from what it sounds like.
None of which changes my point one iota. You cannot claim to be a conservative and be supportive of a large, wasteful, intrusive government that's slowly destroying natural resource development up here. You cannot claim to be a conservative and think that it's okay for any government to levy that heavy a tax on any free market or capitalist. You're a socialist. You're okay with redistribution of wealth as long as the redistribution is out of someone else's pockets. But, mark my words, when the oil industry departs and the state starts trying to extort those same percentages from *you*, you'll suddenly get a clue.
where is the industry going? the resources are here. the resources aren't going anywhere. if the girls at bp want to take their barbies and go home, they can. the resources aren't going with them.
aging basins usually experience a drop off in investment from the large producers. that's okay. little guys will come in and pursue the opportunities that the big girls decided to bypass.
yeah, i'm a socialist. a registered republican, high net worth, socialist
and you are still an idiot that lets others do your thinking for you.
If I invest $1 and get 13 cents in return, that's a 13% return. I can't make that in bank, in real estate, or the stock market (maybe if things keep going up). In other words, a 13% return is damn good, but my question is how much should they keep? 25%, 50%, 75%....should they get taxed at all? If the oil companies are making 13%, I'm fine with that. Dan, your argument just got shot.
Your post shows some incredible short-sightedness. What margins you find acceptable is hardly relevant, and not applicable to the apples to apples comparison Dan is making here.
The only thing that should matter to Alaskans is whether our resources are being developed, and competitively. The reality is that under the current environment everywhere else is more attractive to the industry than Alaska. Our overhead is not competitive.
Ask yourself: would you pay a premium to buy something at Fred Meyer that's 50% cheaper at Walmart? That's exactly what we're talking about. You're likely to make the wiser, more cost effective choice, and that's precisely what the industry is going to do. They can get access to the same resources elsewhere for less. Which means Alaska gets left behind.
Now, for the whiners claiming that ACES, et al, is getting them their fair share, ask yourself this: how have *you* gotten your fair share? Do you honestly believe that money that falls into the state coffers actually gets filtered down to you? When it does get spent in state, do you honestly believe its spent to good effect?
I have no doubt that when private industry spends money in this state it translates into actual goods and services being bought and sold which creates jobs. I also have no doubt that when government makes the same purchase they do so at a premium which reduces the amount of goods or services being rendered. That means less jobs for Alaska.
You certainly have the right to maintain your own ill-concieved notions, but don't expect the rest of us to sip the same koolaid.
The whole "kool-aid" insult has to stop, its way over played. Get something new.