January 08, 2014
Palin backs TransCanada pipeline plan
Abercrombie and Fitch Pants Of all the major runescape gold fashion retailers Abercrombie and Fitch Tees who have suffered in the past year, Abercrombie and Fitch Shorts none have suffered quite like Abercrombie Fitch. Sarah Palin. She is clueless. When will all you people realize that she wants to give away the $100 a month to all PFD receipients, to buy her bad decisions. Why do you think it was announced just before this brainless decision was announced? And most of you bought it. There is no pipeline without the "Big 3" onboard. Do you really believe the state will be able to take back the Pt. Thompson leases and do it on timely matter? It will be tied up in court for years. The 1.7 Billion she is going to give away between TC and the "Socialist giveaway" could fund half of a bullet line which could bring down oil and gas prices for all Alaskans. The oil companies have only signed two year leases "with clauses" on everything they've done so far. They know that their chances of dealing with this clueless administration aren't to good. Funny how Alaskans have the greedy "give me the money" attitude. Definitely something to be proud of.
It is too bad that people that clearly don't understand what they are talking about are allowed to blog as though they do but I guess that is what makes America great. But just because you know how to type does not make you an expert or more clearly said does not make you right!
First let's talk about fairness. Fayce says the marginal rate is 93%. I not sure what school he graduated from so let's do the math. The tax is based on profit. This means before any Alaskan production tax is paid the producer has recovered 100% of their costs. Then the tax is only 25% for the first $30/bbl of PROFIT. From $30 to $92.5 PROFIT per barrel the tax increases 0.4% per $ such that the tax is 50% at that point. It then increases 0.1% per $ so that at $110 PROFIT per barrel the production tax is 51.75%.
For those interested in numbers, the maximum marginal state tax rate occurs when the price increases from 91.5 PROFIT/bbl to $92.5 PROFIT/bbl and is 86%. If you then apply federal and state income tax the over marginal rate is 92%. However, this is NOT the highest in the world. I can name at least 4 countries that are higher (in general) and some countries with special taxes can get too this level and higher. But a funny thing about ACES, once the slope changes so does the marginal rate. For a one dollar change from $100 to $101 PROFIT/bbl the state production tax marginal rate is only 61% and with income taxes the overall marginal rate falls to 76%.
For comparison, if the PROFIT was small such that the state production tax rate is only the base 25% a $1 change in PROFIT has a marginal rate of 55%. This is the starting point. Some countries that only charge a top marginal rate in the 80's% also tax the first dollar of profit at 80+%. So which is better? I won't even get into cost recovery mechanisms, uplifts, special allowances, investment tax credits and all the other items that are necessary to make a country to country comparison.
Oh yes back to the profit. At $125 oil, with total costs of $25/bbl the PROFIT is $100/bbl. Given about 700,000 bbls of post royalty production, the 3 big oil companies are generating $70 MILLION per DAY of PROFIT to share. That is just shy of $26 BILLION PROFIT per year to share. The total tax rate (state production, federal income and state income) is roughly 70%. That means the oil companies, if oil averages $125 in 2008 would be "Exporting" from the state of Alaska $7.8 BILLION!!
Now let's turn to the gas the big 3 have at PBU. They are already producing almost 9 billion cubic feet every day. What they don't need for operations they reinject into the reservoir. To redirect that gas to a pipeline would have a very minimal unit cost, some speculate less than $0.50/MMBtu. With Gas now selling for over $11.00/MMBtu, even with $5 tariff and $0.50 cost the oil companies would be making a PROFIT of about $5/MMBtu. With projected sales of 4 billion cubic feet per day, that translates into $20 MILLION per day PROFIT to share. Since $5/MMBtu is roughly the same as $30/bbl the production tax would be the minimum of 25%, overall tax 55%. So, the oil companies would stand to "Export" from the state $3.3BILLION per year.
At that kind of profit one has to ask on what grounds the oil companies could refuse to ship gas on Trans Canada. Certainly not because it is "Marginal" or "Risky"! Oh wait, they will want to ship it on their own pipeline where value is shifted from petroleum operations to downstream entities. Like with TAPS, shifting a dollar from the upstream to the midstream takes that dollar from roughly a 55% take rate to a 39% tax rate and the state gets sced! Incentives someone tell me why they will need incentives!! Fiscal certainty? What developed nation offers that? The big 3 invest BILLIONS of dollars in places with no fiscal certainty!
Let's hope that during the special session the oil companies won't hide from the facts, refuse to engage in open dialog or have spout misinformation through their puppet loby arm called AOGA.
1. No ELF because ELF no longer applies.
2. Rate of return is important during ACES is was noted the big 3 are aking ove 100% on their current investements I know many fellow Alaskans that would love to double thier money every year!!
3. What do you think is fair for the oil companies? How much of the $26 billion profit do you think they should get to take out of the stae and invest elsewhere?
4. Now if you know your math (and ACES) at current prices and marginal rates, if you add a 20% investment tax credit the state would essentially fund near 100% of any new investments and so investing at little ot no cost to then receive income for many years to jordan 11 bred come translates into a VERY LARGE rate of return.
(Note to Sarah: Don't mind the liberals as we used to say in 'Nam, "You know you're over the target, when you start getting heavy flak.")
Liberal whiners specialize in leaving out pertinent facts, and then spew out frothing at the mouth opinions and confusing generalities which educate nobody. The phrase 'blowing chunks' comes to mind.
Something like this: "If you disagree http://www.fx-order.com with my slanderous rant, instead of honestly debating the matter like mature adults, I'll PUKE on your viewpoint and slander your reputation."
Anyway, YuJump, keep up the good work. I find your level headedness very refreshing, and the facts are quite understandable.
Please continue with this quality of communication. You can expect a lot of meaningless flak from the libs, but that only means you're spot on. The public at large, needs to know this info.
"TransCanada Alaska President Tony Palmer said his company's proposal to move Alaska gas through its Alberta pipeline system and onto Eastern Canada and the continental United States, would allow ConocoPhillips, BP and Exxon Mobil Corp to take an equity stake in exchange for committing to pipeline space."
Also, the COP/BPX project is already underway, spending their own money, with surveyors starting to work. TransCanada might have one little problem with right of way through Native lands. Tanana Chiefs Council is the contractor for ConocoPhillips/BP surveyors, though, since it's their lands that need to be crossed. Things that make you go "hmm".
The Legislature passed the bill because their hands were tied by corruption and Palin's popularity. That doesn't make it right, BTW.
Angry at CP and BP? No way. They have the right to have fiscal certainty as this is the largest project of it's kind, ever! If you were about to build a mansion wouldn't you want to know what your mortgage rates would be for the next 30 years? A smart person would.
AGIA has done nothing. These companies have been I'm sure working on this project for quite a while. A house doesn't get built overnight. Remember, gas has only been profitable enough to ship for the past 5 years, not the 30 this clueless administration wants you to believe.
Wonder what Hickel is thinking right now? Does he regret doing all those ads for Palin? And what about her "It's Alaska's Gas" she touted during her campaign? Typical politician? Promise what you really can't deliver?
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January 06, 2014
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January 04, 2014
Michael Jordan Said bred 11s to Ask
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January 02, 2014
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