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 - KTUU.com ) 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 RayinAK@aol.com Tel: 907-344-4514

 http://tinyurl.com/cfeg-fed-rept

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 –– rayinak@aol.com