The Bailout is Billions…Ten Specifically
The recent oil tax debate has raised more questions than answers for many Alaskans, including the majority of state Senators. Today, in a press release from Senator Bill Wielechowski, a few of those questions were answered.
BREAKING:
Data Shows Even As Companies Invest, Alaska Takes A $10 Billion Hit
For Immediate Release: April 13, 2011
JUNEAU: Senator Bill Wielechowski (D–Anchorage) said new analysis shows that, even with the potential investment mentioned last week by ConocoPhillips CEO Jim Mulva, under the Governor’s oil tax rollback proposal, the state would lose an estimated $10 billion over the next eight years.
Last Thursday, Mr. Mulva told an Anchorage audience that Alaska’s top three oil companies – ConocoPhillips, ExxonMobil and BP – may consider roughly $5 billion in additional investments on the North Slope should the governor’s oil tax proposal (HB 110) pass. He added that this investment potentially could generate up to 90,000 barrels of oil.
Sen. Wielechowski ran a preliminary cost-benefit analysis on the effects this potential investment would have both under the current ACES tax system and under HB110.
“I’m heartened by ConocoPhillips’ ongoing interest in Alaska,” said Sen. Wielechowski, “but we need to focus on the bottom line results under each scenario. After crunching these numbers, it appears passing the Governor’s proposal to induce this level of investment would cost the state billions.”
“Essentially, Mr. Mulva is proposing that Alaskans give up roughly $13.5 billion in oil revenue between now and 2020 in exchange for about $3.2 billion in new state revenues,” he said. “That’s a loss of $10.3 billion. I don’t know many CEOs who would be ok with a deal like that.”
Under Alaska’s current net profits tax with generous credits, Alaska would shoulder 60% of the potential $5 billion investment, Wielechowski said. That means the $5 billion investment is really a $2 billion investment for these oil companies, while $3 billion comes out of state coffers.
Wielechowski pointed out that under the current tax regime, known as ACES, this investment would result in roughly $3 billion in additional profits for ConocoPhillips, ExxonMobil and BP through 2020.
Estimated rates of return would be very strong, potentially over ninety percent, based on the preliminary analysis. This is consistent with statements made by ConocoPhillips executives to Wall Street analysts on March 23, 2011 that Alaska provides “very good returns” and “strong cash margins.”
“Most Alaskan businesses would be elated to get that kind of staggering return within a few short years,” Wielechowski said. “Shareholders should be asking these companies what’s stopping them from making these very profitable investments now.”
Dear Alaskan Oil Companies,
Times are tough. We get that. We feel your pain. This is why we are sharing with you the one secret the rest of America does to get through those rough patches when our revenue streams are only a few billion a quarter. Ready for this: bake sales. Have a good old fashioned bake sale and quit your bitching. We are not giving you billions more. If you don’t like the bake sale idea then leave, and take Parnell with you.
Sincerely,
Alaska
amen
But don’t come to Michigan – I mean Parnell and the oil companies. We have enough problems!
Are they smoking dollar bills in Juneau? I cannot understand how anyone could not see where Parnels bill is going.
We all have to pay much attention to WHO is running for, selectman,councilman,mayor. The vetting process must start here not when it is too late. They are in Juneau now. All we can do is cry.
ooohhh.. I wouldn’t call it funny or sad,,, but true? probably yes…. but there is more than local politics covered here on The Mudflats.. .. Palin has been local for quite some time,, Alaska oil policies DO affect the rest of the nation, and as we’ve seen with the events in Wisconsin, what happens on a state or local level , can become an issue for the rest of the country. If we only buried our noses to a local level, and didn’t watch what was happening in the rest of the country, we’d never see the trends that our Republican friends are doing… With their cries of ” Jobs is our number one priority if elected”… they got into office again… and as far as I can see , have not generated ONE PROGRAM that is creating jobs… In Fact, our esteemed “Boner” has stated “that if jobs go by the wayside, so be it”.. in his headlong dash to cut social spending and give tax breaks to corps and the top 1%… foreshadowing these types of events can be seen on local levels…Dan Sullivan a prime example, school boards around the country are re-writing history, and adding Creationism along side of science… watch what goes on at the local level outside of my state? you bet !! There is a trend nationwide that will bite us in the wazoo, if we aren’t at least aware of, and combat on our own local levels… and what can work against these trends in one locale, can be applied to other locales…..Wisconsin has been a real eye opener to many independents and Dems…
oooppss… “Palin HASN’T been local” brain thinking faster than my fingers can keep up… wish I could type with more than 2 fingers !! 🙂
I’m with you, benlomond2.
Who was it that said, “All politics are local”?
Nicely well put written.
As citizens of the U.S., it’s our responsibility to be aware of government sponsored “gobbeldygook” because it can “bite us in the wazoo”. Sharing information, the truth in most cases, is a great way to keep ahead of the control freaks.
The funniest part about local politics at Mudflats is that most of the posters here aren’t even from Alaska… Sad but true..
What’s sad about that? Alaska is part of the United States, in case you’ve forgotten. Issues here aren’t the concern of Alaskans alone. Thank goodness.
I agree with mo. Alaska is no longer out in the boonies yet we have people thinking they can continue to get away with CBC stuff!
You might be right, Bob. And then, sometimes, a few of the Alaskans who DO respond say some mighty curious things themselves. It’s a strange world, isn’t it?
An additional thought I have is that your basic run of the mill progressives and independents from the outside might actually be interested in The Flats here, more so than the stereotypical rightwingers who need to be given their talking points from fox poop and their local conservative politicos like the Sullivan boys.
Oh well, I’m one of those outsiders up past my bedtime, so I will leave the heavy ruminations about all this in your hands. Good night.
Not sad nor funny . Interesting, useful, sometimes frustrating or irritating but not sad or peculiar.
Am remembering my ma shaking her head and saying “Alaska’s greatest failing is assuming it is immune from making the mistakes people have all over the rest of the country ”
We have peculiarly Alaskan twists to questions everyone else faces elsewhere and will (and do) have some solutions which look mighty strange to those Outside but we do stand to gain by tapping into experience elsewhere.
At whatever level we have a tough time trying to get folks to actually understand that our state was accepted into the union with it’s Constitution providing that resources be managed for the benefit of all Alaskans , which has morphed into financing most of our state government with oil taxes, we have much to learn from communities across the rest of America.
The post WWII development to rebuild jobs mentality long ago morphed into a catering to big business so it/they will spend /locate/develop . Look around at how that has shaken out elsewhere.
Big business has too many of the seats at the table now in too many places, has taken charge of too much of the conversation, has framed so many of the questions towards it’s own interests for so long , it’s hard to shift reference points to include all the other issues communities, states, all of America have.
When we talk about not ticking off the job-givers to the point they just hold onto their money or pack up and leave we have handed our whole voice over to a pack of strategists for corporate gain without any guarantees they won’t do it anyway.
Ask our visitors to MF from Outside about how that has worked out with all the offshoring, mergers for “consolidating services ” which drop a gob o jobs and so on.
We are not immune from falling for the same old gobbeldygook here.
And we have fallen for it on and off.
Let’s not do it again.
Alaska is what I’d be if I weren’t short.fat and ugly!
Why is the state suddenly willing to give everything away? This is just a business negotiation and apparently the people who are negotiating for the state (the People) are making a very bad deal for the people of Alaska. Something smells very fishy to me.
Welcome to the Politics of Fear. Its always been with us. In recent history, it gave us the internment camps for Asian Americans, the McCarthyite blacklists and likely both the Vietnam and Iraq Wars. No need for data, discussion, debate or even consideration. Just be afraid, be very afraid. Don’t think, just react. Are there problems? Sure. Are there ways to encourage responsible resource development? Sure. But Boehner, Ryan, Parnell and Palin aren’t interested in thinking, working, cooperating, creating. Why bother when a cheap scare will boost you right into office. When the time comes to pay the bill, you’ll be retired and working as a lobbyist or talking head, anyway.
Why do you think that people whose election is dependent upon the money provided by lobbies would have any concern for the welfare of the general populace?
To expedite the transfer of wealth from bottom to top(trickle down voodoo), the major players have evidently decided to save time and money by eliminating the middlemen-the people who work for a lining,the households who spend every dime to stay alive,the little people who have the foolish notion that bills need to be paid in a timely manner,you know, YOU. With out the poor and middleclass having the temerity to want and use the “Wealthy’s” money the transfer is completed much faster with more benefit to the top. C’est la vie.
This isn’t the only “fishy” thing going on with our State managers right now.
Thank you Senators for asking for data and asking questions.
President Obama gave a great speech. I imagine the Republicans started frothing immediately, and we’ll hear their whining going forward.
I’m still gobsmacked Alaska uses Diebold machines.
Interesting and curious, isn’t it..? Makes Wisconsin look odd…
Your elected officials are doing a great job at getting the facts out (well, except for your governor). I’m impressed.
Jobs Jobs Jobs
Not rolling back the oil tax is really a tax increase on job creators (bad).
The solution: Roll back the oil tax- a rising tide lifts all boats!
If things don’t work out for the best, the 10 billion loss in revenue can be offset with spending cuts which will create even more jobs (in addition to the jobs created by the original tax cuts).
Everybody wins. It’s really quite simple!
bovine scat ! trickle down does not work, besides its just a trickle. stop drinking the koolaid.
Ivan, I hate to say it but I think BigPete Poed you. He should have added a visible sarcasm tag.
Parnell, as subtle as ever, wanted this blatant give away to prove his conservative bona-fides and prime the corporate cash cows for a run for Begach’s senate seat. He is no more interested in governing the state than was the half term disaster. The focus is in how to cash in and personally profit.
What, only ten billion? Whew! For a minute there, I thought we were talking about serious money.
Sounds like we have a new generation of “Beat” poets. The “Beat” goes on and on and on-give us now,give us now-we can’t wait,we can’t wait. Trust us and give,give give. Time is not on your side. Don’t look for answers,just give.
Let’s look at the arguments. Bill Wielechowski crunches a bunch of numbers that tend to indicate a tax reduction to the oil conglomerates is, at best, corporate welfare. Les Gara publishes stats showing the oil patch is doing just fine. I don’t pretend to understand all the math, but its obvious there is an issue. Now, what’s Parnell’s reply? – a TV where an unidentified guy frantically pleads he’s going to have to fire a bunch of his employees RIGHT NOW unless you give the oil companies alot of money RIGHT NOW. Did I mention it has to be done RIGHT NOW? (No, don’t read the fine print, just sign here.) …. Where did this all come from? Why, when some people are saying that oil is headed for $200 a barrel? Does any of this ring a bell? Does this sound familiar? “Social Security is going bankrupt!” “The federal government is broke!” “We need to privatize Social Security RIGHT NOW!” We need to fix the deficit RIGHT NOW!” What, let the Bush tax cuts expire? Have high income folks contribute to Social Security? ARE YOU CRAZY? No, don’t read those reports by the Congressional Budget Office! Just sign here RIGHT NOW! I mean, would you buy a car this way? Would you run a government this way?
We have so many problems now because we allowed people who firmly believe there is no value whatsoever in government to, well, run our government.
That’s a lot of popcorn.
Can’t have surpluses, no sirree! Then we couldn’t convince people we’re broke and have to take their Medicaid away. Look to start hearing that little gem in the near future.
I’m so tired of stupid politicians sabotaging our government.
oh. well that’s awright then so long as it is only a measly ten mil…..uh bill ARRRRGGHHH!!!!???
A lot is good, more is better – such is the mantra of the gluttonous big corporations, and to be expected. What is particularly disgusting is the fact that Parnell is actively working on their behalf, not Alaska’s – yet there seems to be a blind following of supporters behind him…..unbelievable.