Exclusive Interview: Palin Talks Pain at the Pump Ahead of Fox News Special

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[Al B.]

I have no idea why that shop is empty and the article certainly doesn't answer the question for me.

Capital spending under ACES is UP, although not enough. Even you finally admitted that. Ask the oil companies why they're spending it outside the state and not with Alaska firms. I don't know.

[Al B.]

If you had bothered to read Coyne's well-sourced and linked article, you would have seen that the ND royalty rate she quoted was 20%. At $100 oil, that's $20. Add that to ND's oil tax (11.5%) and and corporate taxes, you would come up with 33% for ND oil compared to 39% for Alaska.

Your link says ND royalties are 18.75%. Ms. Coyne's numbers (20%) don't seem far off. She got them from the ND Tax Dept. and said they were the average for the state.

[thackney]

Capital spending under ACES is UP, although not enough. Even you finally admitted that.

You can confuse maintenance projects with investment for future production if you want. I'm actually doing work for them and I know better. The first two years were mostly spending for projects underway, it fell significantly after that.

Now ConocoPhillips is spending money to update pigging of the gathering lines before the get into the leaky pipe scenario that BP fell into. They are spending money to bring Fuel Gas from Prudhoe as Kuparuk supply dwindles. And the only new drill site that is planed at this time is CD-5 in NPRA on Federal Land.

Keep watching their production rate fall. Alaska will have plenty of folks watching and still not understand why they don't compete with Texas and others lower production tax.

[thackney]

Look at Alaska’s numbers from the department of Revenue.

http://www.tax.alaska.gov//programs/documentviewer/viewer.aspx?2524f

2011 data

$8,090,100,000 revenue from oil
191,260,000 barrels of oil
Alaska North Slope Average Price $87.32
Dollar Value in Alaska of all oil produced = $16,700,823,200

Percentage paid to the State = 48.4%

[Al B.]

LOL...we can go round and round on this all day. I have no idea how Alaska arrived at these numbers but I'll look into it, particularly the $87.32 price which your conclusion (48.4%)is based on.

CP's numbers as stated to the SEC clearly show that they sold Alaskan oil at over $100/barrel. Are they that much better than BP and Exxon? LOLOL. Are they telling the SEC and the State of Alaska different stories? That would certainly be major news.

[thackney]

they sold Alaskan oil at over $100/barrel.

Yes they did. You may also want to consider the Alaskan fiscal calendar is not the same as the SEC.

..the State of Alaska's fiscal year, which is July 1 through June 30

http://www.commerce.state.ak.us/dca/logon/finmgt/finmgt-budget.htm

A six month slide from Jan 2011 to July 2010 makes quite a dollar difference in oil.

Jan 2011 = $83.68
July 2010 = $68.51

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=F005071__3&f=M

[Al B.]

Fine, so we can't resolve AK's FY data with CP's calendar year data.

In calendar year 2010, CP reported their AK sales price at $78.61/barrel and their taxes paid at $17.65 barrel. That's 22.5% for AK's take of CP's oil.

[Al B.]

You can confuse maintenance projects with investment for future production if you want.

CP is spending more money to produce a barrel of oil in AK than ever before. You mean they're not spending any of that in Alaska either?

[thackney]

and their taxes paid at $17.65 barrel

And how much was the royalties?

[thackney]

CP is spending more money to produce a barrel of oil in AK than ever before.

Yep, it is mostly old fields and the cost of producing each continues to rise. As the original design life approaches, or gets exceeded, they spend more and more money just to keep the existing operating. No different than anyplace else. Without new production investment, the flow rate will continue to decline.

You mean they're not spending any of that in Alaska either?

I'm not claiming nothing is spent for new barrels. COP is adding water injection at Kuparuk to squeeze at bit more from the old field as well as handle the increasing amounts of produced water. The later requires the added injection, the former a benefit.

But as you can see from their capital investment dollars, they are sending more to places that produce less today. That is where their future is while the current choke-hold remains in Alaska.