Exxon’s Point Thomson Lease: Murkowski 1 Palin 0

Red County ^ | February 12th, 2010 | Thomas Lamb

[theanchoragedailyruse]

This is a follow up to a commentary that I had written earlier on Red County.

In the previous commentary I had pointed to former Governor Sarah Palin’s actions of denying Exxon their due process rights when Point Thomson leases were yanked from them. And then I compared her actions to the same actions taken by Hugo Chavez when Chavez yanked Exxon's leases in Venezuela.

Since the posting of the commentary, former Governor Sarah Palin in her Facebook commentary seems to be taking credit for one oil well being drilled in Point Thomson.

[Onerom99]

She had absolutely NO BUSINESScoming in and stepping on that lease.. NONE.

[MrRobertPlant2009]

Is it the role of government to direct companies to do something that they do not want to do?

What reason did Exxon have for not drilling?

What was the best busisness decision for Exxon?

(I’ll be honest. I don’t understand Alaskan politics. It seems to be one large fusion of business and state. The government can force an oil company to drill so that Alaskan citizens can get a bigger check. The whole thing sounds like something a Swede would come up with).

[RRTJSP...........]

I agree.........Exxon was being a jerk........Sarah called them on it......Drill baby Drill..............

[proud_yank]

From lower taxes than anyone else,

IIRC, in 2008 AK took ~45% in taxes, before fed taxes. Total taxation on AK oil puts Alaska in some of the highest tax brackets globally.

to public funded joint projects. Palin came in and broke the monopoly and removed the public funding of projects forcing the oil companies to raise their own capital

Can you please give specific examples of publicly funded 'projects' that are occuring on the north slope? Aside from a handful of state police officers in Deadhorse and regulatory personnel there (which are not projects) I can not think of any. Since oil revenues account for about 85% of the state's budget, I'd say those minimal expenses are more than covered.

[proud_yank]

These oil companies take out cheap leases and sit on the land and unless you threaten them they will do nothing until forced.

What kind of a business model is that? Numerous drilling applications had been submitted for the Pt Thompson lease that were denied by the state.

If lease development is held up, it is either because it is deemed uneconomical to do so or because of frivilous lawsuits and regulations. Which of those would you guess accounts for more 'hold up'?

[proud_yank]

It seems to be one large fusion of business and state. The government can force an oil company to drill so that Alaskan citizens can get a bigger check. The whole thing sounds like something a Swede would come up with).

Bingo. That is one of the most intelligent posts on this thread.

[proud_yank]

Oh, and please explain why it was a good thing (or made any sense) that governors preceeding Palin allowed Exxon to sit on the oil for all those years. Be specific if you can.

Pt. Thompson is a gas lease.

[proud_yank]

ping

[thackney]

Looks like you covered it well.

[ASOC]

Exxon had the lease for years

Each year they filed a plan with the Stateof Ak - which approved the plan.

Note...there is no gas market now, and there has not been up to now. Why would Exxon spend bucs to drill for gas, then have no market? The best would be to add it to the gas already used to boost oil production.

So, nobody wins or loses....

[lonestar]

Didn’t some people go to jail over some of the corruption in Alaska? Was Murkowski one of them?

[dools007]

Doesn’t change the question’s premise. And the answer is?

[dools007]

Exxon leased the land from Alaska. The State expected the company to extract the gas and bring it to market. Since the gas is a state asset Exxon would pay Alaska a percent of the take—which, in turn, would be distributed to Alaskans.

Of course the question remains: Why did Exxon lease land it did not intend to use? Could it have been simple greed? Keep the gas off the market and you can charge more for the reduced supply.

You are correct about the cozy relationship between Alaska pols (Demrats and Pubbies alike) and the energy companies. Gov. Palin refused to play the game. She forced rebidding the lease. A Canadian company, TransCanada won. It is already moving gas to the lower 48.

[MrRobertPlant2009]

So, in Alaska, the government makes all business decisions in relation to the energy markets?

How is this in anyway shape or form a conervative principal?

Wouldn’t it be easier to just create “The Alaska Oil Company” - owned by the government - and extract the oil that way?

[dools007]

That’s interesting. Exxon leased the land containing natural gas from Alaska. The gas is Alaska’s property. Alaska expected Exxon to extract the gas and bring it to market. Alaska expected to get a percent of the take which it would redistribute to Alaskans. This has been happening for years with oil in that state. I realize giving the money to its citizens is a revolutionary concept for many of us who live in other states.

Nevertheless, Exxon chose to sit on the lease—probably to keep the gas off the market so more could be charged for gas that was being sold. Of course the other consequence was to keep America dependent on foreign energy.

There has been a very cozy relationship between Alaskan pols (both Demrat and Pubbies) for years. I’m sure there was a game afoot whereby Alaskan pols agreed not to force Exxon to “use it or lose it”. I suspect that some Alaskan pols’ bank accounts were enriched accordingly. If memory serves me some of them went to jail.

What ever the case, Gov. Palin chose to break up the game. She forced a recompete of the contract. A Canadian company, TransCanada, won the lease and is already moving gas to the lower 48.

I would be very interested in hearing what part of that may have been illegal. Also, do you think Alaskans and Americans are benefitting from Gov. Palin’s initiative?

[Onerom99]

The part where she forced a recompete of a signed contract.

Alaska should retain better lawyers before they draw up these contracts.

[proud_yank]

Doesn’t change the question’s premise.

No, it does not. However it does shed light on your lack of knowledge on the matter.

A Canadian company, TransCanada won. It is already moving gas to the lower 48.

This is way off. No gas line has been built yet, and no gas is being exported off slope. Plans for open season are only now being submitted to FERC for development of a pipeline, which is a long ways off from development, if it even happens. If it does go through all stages to completion, it will be the largest engineering project in American history. Exxon is only drilling exploration wells, and is still trying to find possible ways to export gas to *local* markets. Again, no gas has left yet.

A little tid-bit, TransCanada and Exxon are partners in their bid for a pipeline. How's that for irony regarding some of the posts here?? (snicker)

I don't mean to be too abrasive, but where do you get some of your information?

And the answer is?

The answer, as I've stated on this thread, is that many applications to drill that lease have been filed to the state. The state denied them.

a percent of the take—which, in turn, would be distributed to Alaskans

Socialism 101..... Production companies buy the mineral rights to a lease, as they do in any other state when it is public property. Nowhere in Article 8 - Natural resources, of the AK state constitution does it spell out anything resembling a state-run business on behalf of 'the people'.

Furthermore, if what you are saying is true, why are mines not treated (taxed) the same?

[proud_yank]

If memory serves me some of them went to jail.

Who? What was done illegally regarding pt. thompson?

Also, do you think Alaskans and Americans are benefitting from Gov. Palin’s initiative?

No. There has been a very visible decrease in investment in Alaska, and work has slowed as a result. Most new oil exploration is occuring in off-shore federal leases because the tax burden is less.

[proud_yank]

So, in Alaska, the government makes all business decisions in relation to the energy markets?

Currently, its pretty close to that.

How is this in anyway shape or form a conervative principal?

It is not, at all, in any way possible. It is very nice to finally hear someone asking that question on this forum.

Wouldn’t it be easier to just create “The Alaska Oil Company” - owned by the government - and extract the oil that way?

It's close to that, and I hope they don't get ideas to pursue that idea further.

[deport]

Here's 'ol Tom's previous article of two day ago

Sarah Palin's Commonality With Exxon: Hugo Chavez