| April 7, 2006 Do the Math by Ray Metcalfe, Republican Moderate Party of Alaska 
Do the math. It’s not rocket science.Legislators hired one of the world’s top oil consultants to advise them. Unfortunately, they don’t appear to have heard a word he said. If you read between the lines of Daniel Johnston’s report to the Legislature, he said the Governor’s proposal would bind Alaska to a sales agreement that is 35 percent below what many other oil producers would be willing to pay for Alaska’s oil. According to Johnston’s report, the average host country kept 67 percent of the proceeds when oil was bringing in $20 per barrel. Now that oil is selling at $60 per barrel, oil-producing countries throughout the world keep approximately 92 percent of the sale proceeds. But don’t take my word for it. Check out the entire report, and do the math. According to Alaska’s leading oil economist, Richard Fineberg, Alaska's combined income from the oil, (royalty oil, severance tax, income tax and property tax) add up to a 33 percent taking from a $53 barrel of oil, and the feds take an additional 13 percent, for a total of 46 percent, making Alaska the lowest taxing major oil producer in the world. Effectively, we pay $32.40 per barrel to BP, ExxonMobil and Conoco Phillips for the same service most owner-states pay only $4.80 to obtain. Another way to say it: We pay seven times as much as the rest of the world to get our oil produced. If the Governor’s proposal passes, we will be locked into a deal to pay about five times as much for the next 30 years. If our Legislature did what it should and doubled our current 33 percent take to 66 percent, and the feds continued to keep 13 percent, we would still remain one of the lowest taxing major producers in the world — with a significantly different effect. The increased state revenue would be sufficient to restore municipal revenue sharing, eliminate 100 percent of all local sales and property taxes, restore power equalization, and pay every man, woman and child in Alaska a $3,000 annual dividend. Do the math. If the Governor’s proposal is adopted, Alaska will be locked into an agreement for the next 30 years to sell both its gas and its oil at 35 percent below the world average profit retention by oil producing host countries. This would be a mistake that, under the Governor’s proposed “Contract,” future legislatures could not undo. Alaska’s future well-being depends on the general public’s grasp of the points made in Johnston’s report to the Legislature. It is a publicly owned document. On page 47, you will find a statement in the middle of a chart paging the world average profit retention at 92 percent. As you view the chart, keep in mind that the chart is upside down from an owner state prospective. It was developed to show oil company executives what countries offer the highest return on investments through the lowest taxes. You can reprint and publish it for distribution in any way you wish. The Governor’s arguments won’t wash with the public if enough people are armed with a reference point by which to measure the Governor’s plan. High taxes? Compared to what? Compared to whom? Without such a reference point, the public is unable to determine whether to support or oppose the plan. With wide enough recognition of these facts, a tidal wave of opposition to the Governor’s plan might soon hit Juneau. So do it. Do the math. Ray Metcalfe is chairman of the Chairman of the Republican Moderate Party. He may be contacted at Rayinak@aol.com |
-
Columnists -
- related items -
www.repmod.info Republican Moderate Party of Alaska - also from this writer - The Case Against Ben Stevens When Alaska's Government Breaks The Law Corruption Is Killing The Alaska Dream |
||||||
| Copyright
2005
Insurgent Media. All Rights
Reserved. in-sur-gent (in sur'jent), n. 1. a member of a group which revolts against the policies of its leadership. |
|||||||
