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OIL COMPANIES ARE CRYING FOUL

Submitted by Rocky Goodwin
May 14, 2006

GREETINGS, SOMEONE SENT THIS TO ME AND THOUGHT I'D PASS IT ON SINCE THE OIL COMPANIES ARE CRYING FOUL.      ROCKY

Very interesting information something to think about when you see the TV ad with the oil companies crying about taxes. Pass it on.

The Legislatures hired one of the worlds top oil consultants and that consultant told the legislature:

* *The world average government retention of proceeds when oil was selling at $20.00 per barrel was about 67%. Now that oil is selling at $60.00 per barrel, on average, host governments around the world keep 92% of the sale proceeds derived from a $60 barrel of oil.*

See attached is a chart clipped from his report to the Legislature that verifies the above statement.

The chart is a public document paid for by the state of Alaska and available for reprinting in a quarter page adds in Anchorage, Fairbanks, and Juneau, should someone choose to do so.

The chart makes more since when it is pointed out that from an owner state prospective, it is upside down. It was developed to show oil company executives what countries offer the highest return on investments through low taxes.

According to Alaska's leading oil economist, Richard Fineberg, Alaska keeps 33% of a $53 barrel of oil and the feds take an additional 13%, for a total of 56%, making Alaska the lowest taxing major oil producer in the world.

If Alaska were on this chart, at $60 per barrel, Alaska would appear just above New Zealand and below the United Kingdom.

If the Governor's proposal is adopted Alaska's chart position would appear somewhere between Mongolia and the Philippines, locking Alaska into an agreement to sell it's oil 35% below the world's average profit retention for the next 50 years.

A mistake future legislatures could not un-do if the governor gets his way.

The Governor's arguments would not wash with the public if the public simply had a reference point to apply his insinuations. High taxes? Compared to what? Compared to who? Without out such a reference and therefore is unable to ascertain whether to sympathize or call bulls---.

There are several ways to say it.

Most owner states pay about $4.80 per barrel to get their oil produced and delivered to market. We currently pay nearly seven times as much or about $32.40, for the same service to BP, Exxon and Conoco Phillips.

If our 33% of take taxes were doubled to 66% and the feds continued to keep 13%, for a total of 80%, we would still be 12% below the world average retention of profits and one of the lowest taxing major producers in the world.

The increased state revenue would be sufficient to restore revenue sharing, eliminate 100% of all local sales and property taxes, restore power equalization, and pay every man woman and child in Alaska a $3,000 dividend.

Alaska's future well-being depends on the general public's grasp of the subject contained in Daniel Johnston's report to Alaska's Legislature and I think if the information in the attached chart were printed and explained in every Alaska newspaper, a title wave of opposition to the governors plan would soon hit Juneau.


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