Viewpoints: Letters / Opinions
Legislature Gives Your Dividend to Oil Producers
By Ray Metcalfe
April 10, 2020
Friday AM
Alaska's oil producers are running TV ads saying that they are spending $4 billion each year in Alaska. So let me help you with some perspective. If true, then last year they spent $21.92 to produce each barrel of oil. That's the lowest oil production cost in North America. After paying out $21.92 per barrel, they had an additional $26.00 per barrel as profit. That's the highest per-barrel net profit any producer made anywhere in the world last year.
A $26.00 per barrel profit equates a 118% return on their $21.92 investment. BP's stated international average rate of return is 19%, which calculates to a normal return of $4.16 per barrel.
In other words, your Legislature gave what should have been your dividend to BP, Conoco, and Exxon's shareholders. They buy bigger yachts and you get screwed.
Had the Legislature taxed them an additional $14 per barrel, cutting their profits to $12 per barrel Alaska's income would have increased by about $2.5 billion. Full dividends could have been paid without cuts to the university or the ferry system. BP, Conoco, and Exxon's remaining $12 per barrel profit would still make Alaska their highest profit source on earth.
Do you think maybe it's time to get out the pitchforks?
Ray Metcalfe
Anchorage, Alaska
About: Ray Metcalfe is a politician and political activist in Alaska. Metcalfe has served in the Alaska House of Representatives as a Republican, and later ran unsuccessfully for the United States Senate as a Democrat.
Editor's Note:
The text of this letter was NOT edited by the SitNews Editor.
Received March 23, 2020
- Published April 10, 2020
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