Free Republic

Finally, the right naming decision.

For carrier buffs, the redesigned island-lift for CVN-78, earlier this year.

The overhead gantry crane at Newport News, largest in North America, has a 900-ton capacity. Carriers are constructed as modules weighing less than that and lifted into place in the building dock.

Here's the video of the island lift for CVN-78, Gerald Ford, earlier this year:

https://www.youtube.com/watch?v=6yo9bEKxKsk

As you may notice, the island is a completely new design from the Nimitz-class ships and sits farther aft.

Will DC notice?

No. McCain was asked about it this AM on Fox and basically said forget Egypt, Syria and arming the rebels there is the priority. He's all hot for another Libya in Syria.

The real reform movement in Egypt is SOL as far as any support from DC is concerned.

Thanks for the ping.

Prayers for a speedy recovery for your grandson and his dad, onyx. Best to you,

“may soon get” should read “may soon give back”

We can debate if the Royalty oil should be counted in the baseline which would lower the percentage, but I don't see how you can make that argument.

Once again, I've never said that royalties shouldn't be included in this debate. It does tend to confuse the issue with Alaskans, though, who are being asked to consider only taxes, not royalties. The oil companies know that Alaskans won't agree to touch royalties because then we're talking about the Permanent Fund.

In my ConocoPhillips analysis of concrete numbers, I'm forced to exclude royalties because they don't report them.

In your 48% number, you use the discounted price of oil after transportation costs. Alaska uses the ANS WC number in all their discussion and calculations about taxes, $94.49 for the time period you cite. Also, it's 4 fiscal quarters against the calendar data I'm using. I don't care that you're using that price ($87.32), but it makes it more difficult to compare Alaska's net-revenue system against gross value-based systems. It's already difficult enough with most companies operating on a calendar year.

What's the total state take including royalties in TX and LA? I haven't looked at that since I'm starting to lose interest in all this. I probably ought to, though. Might be very interesting.

Alaska seems hell-bent on another one-sided bargain with the Big 3. The Corrupt Bastards Club will soon be rejoicing. The most profitable place in the world for the oil companies and bought-and-paid-for politicians may soon get another huge chunk of $ so they can chase opportunities outside the U.S., where the FEDS have made it very unattractive to make bets despite the huge resources available.

In 2007 under Murkowski's PPT, CP paid taxes at a rate of 21.9% at $69.75/barrel. In 2010 under Palin's ACES, CP paid at a rate of 22.5% at $78.61/barrel. Yet I've never heard a peep out of you or the Big 3 complaining about PPT. That's...odd. LOLOL.

I'm responding now because nobody else chimed in.

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.

An honest discussion would go to why the oil companies aren't investing in Alaska no matter what the tax system is, as my analysis of 9 years of ConocoPhillips Alaska financials clearly shows. They've been pocketing large profits under all 3 tax schemes even though their capital investment is up modestly under ACES.

Wake me when that happens...LOL. Otherwise, good post. I'll defer to others at this point who may want to chime in.

Edit: BTW, Kay Cashman gave me the idea to really dig into the CP numbers when, in 2009, she wrote an article explaining that Alaska was a great place to make money in the oil business based on CP's outstanding performance in 1Q 2009 under ACES. I expanded her analysis to include CP's performance under all 3 tax schemes.

http://www.petroleumnews.com/pntruncate/936617849.shtml

Correction, Kristen Nelson not Kay Cashman. Same thing. They’re partners in reporting this stuff.

Based on the comments I saw in your post, it looks like the difference between Parnell/AK House and the Senate may be large enough to require some bit of time looking into the differences before a Special Session would actually be called.

Again not to be argumentative, but I can't resist one comment from your article posted here by Kay Cashman (who I pay a lot of attention to):

Referring to a slide benchmarking Alaska tax rates against other fiscal regimes, he said what PFC has said is at $100 per barrel ranges, government take under ACES is in the mid-70 percent, [emphasis mine] “and that is very, very high by OECD standards, second only to Norway and certainly in particular much higher than the levels of government take we see elsewhere in the Lower 48 which are the places in particular Alaska at the moment is competing with for investment capital.”

Too bad Mayer doesn't break that down. You and I both know ACES is only one component of that assuming the 70% is even true, which I doubt. Mayer certainly wanted to leave the impression that it was only because of ACES, which is disingenuous. Another example of why Alaskans aren't getting an honest discussion of the problems up there.

Thanks. I'll refrain from arguing for now but as I mentioned yesterday, SB 192 was currently deadlocked in the Alaska Senate:

Senate deadlocked over oil tax rewrite

"The oil tax bill, SB192, was pulled from the Senate's floor calendar Thursday after it failed to garner the votes needed from within the bipartisan caucus."

This is a far more modest bill than Parnell and the Big 3 want (they want to gut ACES as you well know), and even this bill is totally deadlocked. Maybe it will get off the snide before tomorrow night, but it's looking iffy.

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?

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.

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.

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.

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.

The article you link was written by a former paid BP lobbyist to the Alaska legislature. I’ll give it its due consideration.

When you look at the ND state and private landowner take in ND, it's about 33%. Amanda Coyne at the Alaska Dispatch made the case that ND's 33% compares to Alaska's 39%. She states that there is a discrepancy but it's not the wild-eyed 85% vs 11% that some of the Big 3's proponents make.

She also makes the case that Alaska's state take on oil compares very favorably to other places in the world, including TX and LA when you factor in the private landowner take.

Myth-busting claims in Alaska's oil tax debate: Part I

There's also a Part II lined in the above article.

I don't like taxes period, but there should be an agreement between rational people based on truth when it comes to sharing profits between resource owners and operators. I certainly agree that the marginal curve under ACES probably needs changing to further incentivize operators when prices are high, but nothing like the giveaway that the Big 3 are demanding in exchange for....nothing but words.

Cannot you not look at those two statements and see how they contradict each other.

No I don't, in light of the fact that you and others have been trying to pin all of Alaska's oil problems on Palin's ACES. That's what this and other discussions on this topic around here have always been about.

I fully recognize there are some systemic problems in Alaska which need to be understood which, at least for CP, seem to be independent of a particular tax system. To try and pin this on Palin's ACES is disingenuous to the max. When you stop doing that, I'll know we're making progress on understanding the problem, at least on FR.

I recall some posts from you not too long ago remarking about the ridiculously high prices being paid for ANS crude by West Coast refineries in 2011. At the time you were wondering whether the anomalous situation would hold. :)

At any rate, if you take CP's consolidated Alaska revenues for 2011 ($8,142K) and their taxes paid in Alaska ($2,721K), it's still only 33.4%.

You are also using the price of oil sold in the L48.

Nope, comes from page 155 of the SEC 10-K filing.

It is 24% when you only count E&P.

Correct. I said "E&P profitability". That's the way to look at it, considering the miniscule effect of other CP businesses in Alaska.

Significant part of higher profit is the lack of new investment in Alaska.

I actually agree with that. And getting to the real answers to the problem actually needs some adult conversation, not a bunch of "It's Palin's fault" BS. At least she tried to address it with significant tax breaks under ACES for exploration.

ConocoPhillips has been coining money in Alaska for decades under 3 different tax systems. And they've been spending a far smaller relative amount on capital investments and exploration under all 3 tax systems. Capital expenditures are actually UP under ACES, although clearly not enough.

Alaska has some built-in disadvantages to new exploration but also some existing infrastructure advantages. I'd like to get to the bottom of it, but the debate up there has turned poisonously political. Fat chance to get at the facts in that environment. And with all due respect, thackney, you're not helping with some of the sources you quote. The Big 3 has long since demonstrated that they have not earned the "trust me" seal of approval in Alaska.

You're looking at the wrong year. You're quoting 2010, the worst year of the 4 ACES years for CP's Alaska E&P profitability. I was quoting from 2011 figures.

The 4-year average under ACES for CP is 22.9% of E&P profits on 15.6% of production. You'll have to do some spreadsheet math to get to the production figures. The raw daily production numbers come directly from CP's financials, though.

Nope, I haven't read the fine print in the 10-K's (if any) to know where royalty payments are applied. The tax line simply says "Taxes paid in Alaska". I'll try and dig into this later. Royalties may, in fact, be rolled into production costs which, in CP's case, were a TOTAL of $12.45/barrel in 2011 for AK oil.

Do you think royalties paid to Alaska make up the difference between 31.2% (from the 10-K's) and the 50% you claim? Please.

BTW, CP's profit/BOE in Alaska in 2011 was $24.15 vs. $8.16 in the Lower 48 vs. $17.86 overseas.

Alaska's take on all taxes, royalties and other fees averaged about half of the oil selling price in 2011.

Not for ConocoPhillips. The 31.2% was ALL TAXES paid in Alaska in 2011, a year with record oil prices, and comes directly from their 10-K report ($33.11 per barrel in taxes paid in Alaska, $105.95 avg. selling price). My comparison to ND excluded federal taxes in both cases. Are you saying that federal taxes are the determining factor in whether AK is competitive? I doubt you're trying to make that argument. I know the Big 3 aren't. They're blaming it all on Palin, as you have in the past.

As for your link, you can quote all the crap you want from groups managed by Big 3 suck-ups like MSI Communications (Lisa Murkowski's PR firm). I'll stick with numbers I can confirm. That's the problem with this debate....too much smoke, mirrors and snake oil.

When total taxes and governmental take reached 85%, it is hardly surprising that international companies have been spending their investment dollars elsewhere.

Total taxes and governmental take in AK have never been 85% and you know it. Your corporate PR buddies and the Corrupt Bastards of Alaska will keep spinning the lie, though, as long as Alaskans are too weak and uninformed to push back.

In 2011 under ACES, the total AK take from ConocoPhillips (one of the Big 3) was 31.2% -- in line with ND when you factor in high royalties paid to private landowners, and a lot less that some other places. This, when the average price of Alaskan oil was a record $105. Additionally, Alaska remains the most profitable place in the world for ConocoPhillips to be in the oil business -- 24.1% of their worldwide profits on 15.9% of their worldwide production in the year 2011.

Just for the record, I think the ACES tax scale needs to be adjusted at the high end. However, the massive $2B/yr. give back currently being promoted by Parnell and the CBC, with no guarantees in return from the Big 3, is crazy. Thankfully, the AK Senate is balking once again as of this morning, so there's still hope for the citizens of Alaska.

Well done, mick. Unfortunately, I don’t share your renewed optimism about Palin as the galvanizing force for American conservatism in the future.

We shall see and all the best to you.

Front page of Drudge:

From the Palin lawyers' letter:

‘Further, as Mr. McGinniss waived the attorney client privilege and disclosed to third parties what “Random House Lawyers” told him (he needed sources and the book was not publishable without them), we will also be entitled to review your company’s legal correspondence with Mr. McGinniss and his responses thereto.’

I'm wondering if Random House has some wiggle room here.

If the case goes forward, we'll find out. Palin's lawyers -- in their letter -- stated that attorney client privilege has been waived by McGinniss's foolish statements in the email about what Random House lawyers were saying. Palin's lawyers specifically put Random House on notice about document preservation.

Mark Levin tonight on his show confirmed this -- that attorney client privilege has been waived by McGinniss's stupidity.

Ping!

Great to hear from you again, redpoll.

I’ve never seen a clear-cut case of proveable “actual malice” as this appears to be. If this thing goes forward, it also may be a way to get at people like that reprehensible Jesse Griffen (the recipient of the McGinniss email) and his connections to Democrat funding. Dan Riehl did some stuff on this a while back which indicated there may be a connection between him (and the Alaska blogging community) and Democrat money.

This could be fascinating although I suspect Random House will pull the book and issue some half-baked “apology.” That will probably end it.

I didn’t say a damn word about Cain’s qualifications but you didn’t hesitate with the belittling of Sarah Palin. Figures.

I happen to think Herman Cain is a fine man who has zero chance to be the GOP nominee.

Palin better get in before the conservative GOP majority coalesces around Herman Cain!

Thanks for the laugh! :)

She is learning from some of the mistakes of the 1976 and 1980 Reagan campaigns, which overspent early in both cycles and ran out of money both times, costing the Gipper the nomination in 1976 and very nearly derailing him in 1980.

Can't be emphasized enough and, at this point, would be the chief reason for Palin waiting until the last possible minute to enter this race. Christie will be no threat if he gets in but finances are definitely still an issue, as the GOP-E will obviously continue to work to shut off her access to big donors. Other than that, she can get in at any time from this point forward. Her call.

Great perspective as usual, BC.

There is no doubt Bristol is her mother’s daughter. Fearless young lady.

Ping...saw your ping to me on the earlier thread but I’ve been gone all day. Breitbart is on the warpath on this. Good on him.

Looks like Palin’s blind trust may end up in the publishing business. Hope she keeps this in mind when she appoints a trustee next year. :)

McGinnis is working with Roger Ailes at Fox.Google Gabriel Sherman Joe McGinnis.Get the picture.

McGinniss and Ailes have been buddies for 44 years.

McGinniss ‘too busy’ for Fox? [McGinniss and Roger Ailes friends for 44 years]

Great report, Jeff, and thanks for the ping. God bless you and your family.

Ping. dot dot...connect the dots.

Ping to the Big ‘H’ finally freezing over.

@ppppolls PublicPolicyPolling
Obama trails Palin by 14 with independents in North Carolina, that's when you know you're having a bad month.
8 hours ago via web

Link

Is anyone else seeing a pattern here?

Ten months ago, Gigot and his WSJ editorial staff were waxing eloquent about Palin's sophisticated understanding of monetary policy and the negative effects of QE2:

"The former Alaskan Governor showed sound political and economic instincts by inveighing forcefully against the Federal Reserve's latest round of quantitative easing. According to the prepared text of remarks that she released to National Review online, Mrs. Palin also exhibited a more sophisticated knowledge of monetary policy than any major Republican this side of Wisconsin Representative Paul Ryan."

Palin's Dollar, Zoellick's Gold

Now that the hour of her decision approaches, Mr. Gigot says if Palin had spent more time boning up on economics and how the world works, she may have had a shot.

Yeah, I see a pattern...panic.

Here ya go:

Perry's Egghead, Fox's pollster

Have a great trip, onyx!

Great job.

Headline now at the Daily Caller:

This is the deputy campaign manager. Two in one day if the report is accurate. There was a direct quote from this person in the article but, we’ll see.