Thursday, September 22, 2016

Thursday, April 19, 2012

Federal study says Alaska's tax on oil profits below international averages!

Because Advertising Revenues Have Bought Their Silence

The Alaska Oil and Gas Association (AOGA) has a TV ad running that says “Alaska has the highest oil tax in North America.” — To see the ad, Google: AOGA - Latest News and click on the guy with the white hard hat. According to the U.S. Department of Interior, AOGA’s statement is false! For confirmation, see the Department of Interior’s publication attached below or Google: Average Government Take, PI, and IRR Indicator . Facts are, Louisiana’s tax on oil is 9% higher than Alaska’s.

ConocoPhillips’ VP of Finance falsely stated, “the tax on North Slope oil production is one of the highest in the world.” (KTUU News March 29, 2012 ) (To confirmation the statement: Google: A Tale of 2 Taxes - ) According to the U.S. Department of Interior, the Conoco VP’s statement is False! The U.S. Department of Interior says several oil exporters tax oil profits at 90% to 95% and the international average tax on oil profits is 79%. The U.S. government says Alaska’s North Slope oil profits are taxed at 76%, or 3% below the international Average. See excerpt from federal report below, or to see full federal report Google:    Average Government Take, PI, and IRR Indicator          

According to Mexico’s Government owned oil company PEMEX, Mexico’s tax on oil is 94%. See PEMEX’s published announcement of its last three bid awards and mathematical analysis attached below. Mexico was omitted from the U.S. Government’s study of oil tax systems but its tax rate leaves Alaska and Texas tied for third and fourth place out of North America’s eight oil exporters studied here. For more information on Mexico’s last bids Google: Mexico Pemex Aug 18, 2011 bid awards.

According to AOGA, the oil business is booming in Texas thanks to good tax policies and dying in Alaska due to bad tax policies. (See Attached) According to the U.S. Department of Interior, the tax rates in Alaska and Texas are the same. (See Attached)

AOGA says local, state, and federal taxes on profits from North Slope oil equal 76%. The Department of Interior agrees and points out that a 76% tax on oil is below the worldwide average. (See Attached)

In a comparative attempt to make Alaska’s tax on oil profits look excessive, AOGA says that the U.S. Governments tax rates on oil in federal waters in the Gulf of Mexico are only 43%. According to the U.S. Government, AOGA’s statement is false.  The U.S. government says its tax on production coming from the Gulf of Mexico is 79% in shallow water, and 64% in deepwater. (See Attached)

In a comparative attempt to make Alaska look bad, AOGA says the Alberta taxes oil at 55%. The Federal study on international oil tax policies says Alberta taxes at 64%. (Note: Alberta oil is not drilled and pumped, it is dug up from tar pits and heated to separate it from sands. It is a very low quality oil and enormously more expensive to produce.)

Thanks to the integrity of a few reporters in Juneau and Fairbanks, few voters outside of Anchorage are buying into oil company fairy tales.  Unfortunately the Anchorage Daily News, KTUU Television News, and several other news outlets in Alaska’s largest city have chosen to leave their listeners and readers in the dark and like magic, AOGA keeps sending them checks for advertising; –­­­­ just not a lot of difference between them and the legislators Bill Allen bribed.

The Fairbanks News Minor, The Juneau Empire, and The Alaska Dispatch have all told an entirely different story and they deserve recognition for being truthful with their readers in this matter.

Sincerely, Ray Metcalfe
Chairman of Citizens for Ethical Government, Inc. — Email Tel: 907-344-4514

Friday, April 13, 2012

KTUU in question?

While airing "we have integrity" KTUU is knowingly broadcasting false claims of oil industry executives and advertisers.

1.       TV ad featuring Don Gray of ASRC Energy, said:
“Alaska has the highest oil taxes in North America.”False!
·           According to the Government owned oil company PEMEX, Mexico has North America’s highest tax on oil at 94 %. To verify see calculations below and Google: Mexico Pemex Aug 18, 2011 bid awards.
·           According to the U.S. Department of Interior, the second highest is Louisiana at 85%. To verify Google: Average Government Take, PI, and IRR Indicator and drop down to page 62. And,
·           The U.S. Department of Interior says, Texas and Alaska are tied for third and fourth place at 76%. To verify Google: Average Government Take, PI, and IRR Indicator and drop to page 60.

2.       ConocoPhillips’ VP of Finance, television news talking point:
“Total ‘government take’ on North Slope oil production is already one of the highest in the world.”False!
a.         According to the U.S. Department of Interior, the worldwide “Government Take” (meaning total local state and federal tax) varies from 57% to 99% and the worldwide average is 79%. Alaska’s total local, state, and federal tax or “government take” equals a below average of 76%. To verify, google; Average Government Take, PI, and IRR Indicator and drop to page 62.

3.       TV ad featuring Liz Galiunas of ConocoPhillips, said:
“There is an oil boom going on but it’s not happening in Alaska”False!
a.         According to Alaska’s Department of Labor, the Alaska Department of Natural Resources, and Petroleum News, North Slope Employment is at a record high. More exploration wells are planned for the coming year than at any time since the Prudhoe Bay oil discovery. To verify, Google; Petroleum News North Slope Booms.
Ray Metcalfe –– 907-344-4514 ––

Friday, October 21, 2011

The Gorilla in the room

We will be hosting another protest, blowing up our giant 26 foot tall inflatable rat for the second time, in front of the Anchorage Daily News this Friday October 21st 1:00 to 3:00 PM for selling out their readers in favor of to corporate interests. 
Like it or not, ADN is still the media gorilla in Alaska. A little fact checked front page news about oil taxes would discredit the claims of Hawker and Parnell and bring an abrupt end to any significant measure of support BP has for its campaign to avoid paying Alaskans a fair price for the oil they take.
Whether through campaign funds, or other means, want of money is the only logical rational for a fully informed legislator, or governor, or newspaper for that matter, to turn a blind eye and/or assist a resource extractor in a quest to take Alaska's resources for less than other resource extractors would pay if they were given the opportunity.
KTUU News argues that ADN is a private company and has the right to print, or not print as they wish. KTVA didn't see it that way and gave us good coverage two weeks ago. Click here to see KTVS's coverage of our last protest in front of the Anchorage Daily News.
"Sin of omission" is a term you've have learned in journalism. ADN's readers have a right to trust in ADN's truthfulness, and ADN has violated its moral obligation to be truthful with their readers. The  degree to which The Daily News has avoided factual reporting on oil tax issues is obvious and money for silence is only one logical reason.
Getting a fair price for Alaska's oil effects your dividend, your teachers salary, your tuition and just about every thing government service you depend on. Join us and make an impact on a local institution that has sold you out as it licks the boots of British Petroleum.
Ray Metcalfe 907-344-4514

Wednesday, October 12, 2011

Protesting the Anchorage Daily News Censorship

Three weeks ago I sent the following letter to the Daily News Room Boss:

Attached is a fact filled sheet designed to provide interested Alaskan voters with the information they need to make informed decisions about oil taxes.

After receiving a negative response to having brought similar articles to the attention of an ADN reporter on oil, I hand delivered two of the articles attached to Attention Patrick Doyle with the question:


“What would motivate the largest newspaper in an oil state to withhold widely published news stories containing readily available information about production costs and oil profits from its readers in the midst of a statewide debate about oil profits and production costs?”

While I have confidence in the integrity of most ADN reporters, I have lost confidence in the integrity and motives of ADN’s management, publishers and owners.

Oil producers and their supporters who claim they want to “make Alaska competitive again” have filled the airwaves and your pages with "facts" that have consistently proven to be fabrications. ADN has made no credible effort to retract, correct, or educate its readers on the world market norms for the taxation of oil.

Rather than provide its readers with readily available fact-filled articles, the ADN uses dueling editorialists to place Alaska’s oil tax issues into the context of a “he said she said domestic quarrel.”

In his Sunday August 14th column Paul Jenkins said that Alaska's high taxes are "forcing the oil industry to go elsewhere, to places such as booming North Dakota.” Clearly knowing the statement is false, ADN demands no correction and continues his column.

Not until after Petroleum News’ “North Slope Booming” article reached ADN’s readers did ADN bother to print anything contrary to Mark Hamilton’s “Starving North Slope Workers Moving to North Dakota Advertising Campaign.” Attached is a Juneau Empire article which explained the same issue eighteen months earlier. It was one of the articles delivered by me to the attention of Patrick Doyle. It preceded Mark Hamilton’s advertising campaign; but ADN's Anchorage readers had no way of knowing they were being misled.

On Saturday August 20th, the ADN gave Representative Hawker a platform to tell Alaskans that "Alaska's Production taxes are the highest in North America." That is also not true and its falsity is easily verifiable.

In a state that relies so heavily on getting world market values for its resources, few issues are more important. The ADN has a lengthy track record of keeping its readers in the dark on such issues. On Thursday of this week, at noon, I will be delivering a power point presentation to the Anchorage Democratic Bartlett Club's weekly forum at Denny's at 3950 DeBarr Rd., Anchorage, AK. My focus will include the ADN’s refusal to educate its readers on this issue.

Please be assured that I do not believe the above sins of omission rest on your shoulders or those of your reporters. I believe its rests squarely on the shoulders of ADN's management.

You are invited to come and listen on Thursday. The Bartlett Club has agreed to leave the following Thursday’s lunch speaker schedule open should ADN wish to respond.

Ray Metcalfe 907-344-4514

The Daily News did not show and has offered no meaningful response. If the Voters knew the facts about oil taxes; Parnell's push to roll them back Alaska's oil tax wouldn't have a snowballs chance in hell of going anywhere. In fact, some people might even begin to think he smelled a lot like Bill Allen.
Political activist Ray Metcalfe led a demonstration against the Anchorage Daily News along Bragaw Street that featured a 25-foot rat this afternoon. Metcalfe and his supporters said ADN refuses to publish the truth about oil taxes.
 Ray Metcalfe and Citizens for ethical Government outside the ADN Offices
Political activist Ray Metcalfe led a demonstration against the Anchorage Daily News along Bragaw Street that featured a 25-foot rat on Friday, October 7, 2011. Metcalfe and his supporters said ADN refuses to publish the truth about oil taxes.
Local political activist Ray Metcalfe is leading a protest against the Anchorage Daily News. Metcalfe says ADN is sandbagging its readers and withholding information about Alaska's oil tax facts.

Friday, February 19, 2010

"Faces of ACES” in the Shadows of Veco

Former BP spokesman Paul Laird is now doing through Alaska Support industry Alliance what he can no longer get Veco to do for BP. The Anchorage Daily News is rehabilitating Paul Jenkins, the author of Veco’s Daily News Column the FBI shamed them into removing. And the same bunch of Veco backed Alliance backed legislators are lining up to collect the rewards of pretending there is one scintilla of truth in Bill Allen’s “Paul Laird’s Faces of ACES” campaign.

Fact: Every major oil producer in Alaska has bid for the right to take over production of Iraq’s poorly maintained and under-producing oilfields in exchange for payment of less than $2 per barrel for their services. Even after a big tax increase, Alaska’s largest producers still average about $20 per barrel for providing the same service.

BP partnered with a Chinese oil company to win the bid to re-develop Iraq’s largest oilfield, the Rumaila field. BP will effectively be working under a service agreement that pays BP and its partner $2 per barrel for oil produced in excess of the Rumaila field’s current 960,000 barrels per day. BP will be penalized if it does not hit its 2.85 million-barrel per day target within six years. On closer scrutiny, Wood Mackenzie, the same oil consulting firm Ralph Samuels hired to advise Alaska’s Legislature in 2004, reviewed the contracts and estimated even lower returns for BP and partner. Wood Mackenzie suggests an ultimate net of approximately $3 billion for 16 billion barrels of production. (Source: Business Week July 24, 2009)

Wood Mackenzie also told Business Week BP has admitted finalizing a similar contract in Abu Dhabi which would ultimately pay BP approximately $1 per barrel to produce their oil. (Source: Business Week July 24, 2009)

John MingĂ©, President of BP Exploration, no doubt at least vaguely familiar with the above, when asked about proposals to roll back Alaska’s new tax on oil, told The Anchorage Press; “it’s a good start, but it’s not enough to sustain Alaska’s oil and gas industry.”

Exxon and Shell have signed similar contracts with Iraq. According to The Wall Street Journal, Exxon and Shell signed a joint agreement to produce Iraq’s West Qurna oilfield. Exxon and Shell’s contract requires a $25 billion investment over the next seven years to ramp production up from 279,000 barrels to 2,250,000 barrels per day and another $25 billion for operating fees. They will be reimbursed for their pre-approved expenditures over the duration of their 20 year contract, not to exceed $50 billion. Exxon and Shell will operate the field on a break even (no profit) basis until the agreed increased production schedule of 2,250,000 barrels per day is reached. At that time, Exxon and Shell will be paid $1.90 for each barrel of daily production exceeding the original 279,000 barrels in production. (Source: Wall Street Journal JANUARY 18, 2010)

Shell won an additional contract on similar terms by partnering with Malaysia's Petronas Oil. Together they offered to redevelop Iraq's Majnoon oil field for $1.39 for each extra barrel they can extract above its current 45,000 barrels per day. (Source Wall Street Journal December 11, 2009)

In comparison, according to the Alaska’s Royalty Accounting Department, ConocoPhillips paid severance taxes to Alaska on 99,581,335 barrels of Alaskan oil in 2008. According to ConocoPhillips’ stated net earnings on their Alaskan investments, ConocoPhillips’ profited in the amount of $2.3 billion. Dividing ConocoPhillips stated net profit by the same number of barrels reveals ConocoPhillips’ net profit averaged $23.10 per barrel from its Alaskan interests in 2008.

By applying the same calculations to 2009, and averaging them in with 2008, we can calculate that ConocoPhillips has averaged about $19.62 per barrel in the two years following the Legislature’s increase in Alaska’s oil tax.

BP and Exxon refuse to disclose their profits from Alaskan oil, but a reasonably accurate estimation of their profit margin can be extrapolated by applying the same North Slope per-barrel profit margin to the number of barrels on which BP and Exxon paid taxes in 2008. BP paid taxes on 79,496,721 Barrels, placing their estimated profits for 2008 over $1.8 billion. Exxon paid taxes on 53,756,656 barrels, placing their estimated 2008 profits over $1.2 billion.

Alaska’s oil makes Alaska’s Producers about ten times the per barrel profit they’re hoping to get from Iraq. Iraq doesn’t beg them to spend for more production, they tell them to do it or get out. Alaska’s oil fields have never been nationalized as Iraq’s were when taken from BP in the 1970’s, Alaska’s oil is not in a war zone, and isn’t likely to become the subject of a civil war between religious factions fighting over who owns the oil.

Alaska’s three big oil producers spent between two and three billion dollars in 2008 and profited over $5 billion. If Exxon and Shell reach Iraq’s required production target, they will first spend and recover at least $25 billion for infrastructure and operating costs before receiving a dime of profit. Once their required production target is reached, they will be paid $1.90 per barrel on 1,971,000 Barrels per day for a total annual payment $1.3 billion. If they don’t meet their target, they may be sent packing.

Hardball works far better than caving to demands. Every company mentioned above was demanding Iraq pay two to three times as much for their service until Iraq said get moving or get out. Exxon holding Point Thompson as a strategic reserve to develop if their refineries ran short of crude. When Alaska moved to take Point Thompson away Exxon finally started drilling.

Perhaps the biggest story here is in why most of Alaska’s media has never provided their Alaskan readers and viewers with coverage of any of the above referenced widely publicized stories. In light of the advertising campaign by the Alaska Support Industry Alliance, such information would seem crucial to the decision making process of Alaskans. I hereby challenge Dan Fagan and the Industry Alliance sponsors of those “Faces of ACES” ads to debate the content of this article and their ads any time, any place, any audience.

Ray Metcalfe