The oil companies, making huge profits in the state of Alaska are doing everything they can to convince the public and the Legislature that any additional tax would drive them out of the state.
Well, OK, let’s put the whole issue into perspective from a corporate standpoint, because it won’t be too long before we gear that whatever the oil companies are doing is for the benefit of and the responsibility to their stockholders.
Immediately after the Exxon Valdez oil spill, Exxon raised the price of a gallon of gas in the Lower 48 by 10 cents a gallon. There was an immediate public outcry and an investigation caused a rollback of that increase within 30 days.
During that time period, for every one-tenth of cent per gallon that the price was increased, Exxon made an estimated $1 million net profit per day. That equals $1,157.41 a second profit.
You only have to look at their financial statement in the recent past to know that their profits are considerably higher in today’s market. The oil companies claim their profits are driven by supply and demand, and I don’t disagree. Their cost of production certainly has not risen proportionately to the supply and demand or they would have left long ago.
There is absolutely no doubt that the Alaska oil producers are profitable, something even they don’t dispute. The state of Alaska has stockholders too in the form of its citizens. The state owes a duty to its citizens to properly manage its natural resources. I’m not necessarily an advocate of the permanent fund dividend, but by comparison, Kuwait has 350,000 more citizens than Alaska, but each Kuwaiti citizen gets about $20,000 more per year in dividends. If memory serves me right, Kuwait has at least a partially nationalized oil production system.
The oil companies are using scare tactics in an attempt to hold the state hostage regarding the PPT and the gas pipeline construction project. The fact is that the gas pipeline is projected to be a very profitable venture for all concerned and corporations don’t abandon profits. If they were to abandon those profits the void would be immediately filled by anther entity responsible to its stockholders.
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