Really? It doesn't matter what the tax penalty is? The companies should just be happy to pay it and go on?
as my analysis of 9 years of ConocoPhillips Alaska financials clearly shows
What has the production rate done in that time period? You are comparing a time period where the major investment for the capital cost to build infrastructure was already spent and mostly operations and maintenance was the expense. If they are not investing dollars to replace declining production, then they don't have a long-term future.
The oil business requires significant capital investment before you get a return. Those dollars don't happen in the same year or the following.
It doesn't matter what the tax penalty is? The companies should just be happy to pay it and go on?
I didn't say that. I'll say my words. You say yours. OK? I said that lack of investment in Alaska has been going on far longer than ACES has been on the scene, covering all 3 tax systems. That is a fact. I've further stated that capital investments are up modestly in Alaska under ACES. That, too, is a fact. I've also stated that CP's profitability in Alaska has been strong under no matter what the tax system is. That is also a fact.
You, OTOH, continue to pin all the problems on ACES and Palin. You've been making that case for a long time. You've also asserted, as you did yesterday, that the effective governmental take was 85% at current price levels. I assumed you were talking about Alaska since it dovetails on some of yours and Paul Jenkins' numbers that have floated around here, which is a crock. When you clarified your remarks, you went to a 48% number for Alaska's take. Now in this article today, you say 70+% for the total governmental take. You're a moving target.
As for the 48%, I disagreed with it and pointed to CP's effective Alaska tax rate of 31.2% in 2011 on an avg. price of $105.95. I realize that doesn't include royalties to the state. That's kinda murky from my research. The AK Dept. of Revenue says that the majority of fields are charged at a 12.5% rate but then says that only a fraction of the oil is charged royalties. They further compound the problem by lumping oil royalties in with rents in their revenue summary. I don't know how to figure that all out. Do you?
Amanda Coyne, who you dismiss (BTW she hates Palin, too), calculates the total AK take, including royalties, at 39%. From looking at the ACES effective tax rate curve at $100 oil, it looks like she just added the 12.5% average royalty number to the ACES effective rate at $100 to come up with the 39% total take number as compared to ND's 33%. Whether she's precisely right or not on royalties, that's a far more real comparison of the actual competitive situation between AK and ND than you or the oil companies have been making to Alaskans. And yes, obviously there are other factors involved than taxes, possibly disadvantageous to Alaska
As for your overall remarks in the post I'm responding to, everybody understands that production is declining up there and nobody likes taxes. I know I don't. That said, I hope you agree that Alaska deserves a return on their state-owned resources that would continue to help wean them off federal dollars.
The oil companies want a $10B tax giveback in return for a guarantee of...nothing. They've talked about a $5B investment in return for the $10B but I've seen nothing from them that they would agree to put that number in the bill as a guarantee. Put it in the bill and you might be surprised at my reaction. Don't hold your breath waiting for that guarantee to happen. Their attitude is, show me the money and we'll do good things. If Alaskans want to buy into that again, good luck to them.
In terms of honest discussion, I'd like to hear further from the oil companies on what the $5B would go for, if they're willing to guarantee that investment (they aren't). For instance, some have said that taking TAPS back north of 1,000,000 barrels/day would require a major $ investment to upgrade the aging equipment. Is this true? If it is, I don't know why they're not making that case more vigorously. I think that would make their case stronger that Alaskans need to contribute to that. The bottom line, though, is the question of just how is the industry going to increase the flow of oil. If they're going to hit up Alaskans while pumping federally-owned oil through the pipeline (say ANWR), I say screw that. Hit up the feds for the money. They're the real problem in Alaska, anyway.