Sunday, March 10, 2013

Alaska Oil| An interesting exchange with Jack Roderick ...

There are few Alaskans more experienced in the oil industry and few books from which I have learned more about that industry than Jack Roderick and his book Crude Dreams.  If you are interested in the topics I discuss on these pages and haven't read the book, you should.

As a result, it came as something of a surprise over the last couple of days that Jack and I have become engaged in a debate in, of all places, social-media outlet Linked in, on Alaska oil tax policy.  It began when I posted there and elsewhere a comment on a recent Anchorage Daily News editorial that I thought was particularly short-sighted, but which Jack thinks is well grounded.

Linked in is not the perfect forum to host a debate because of the space limitations imposed on comment boxes, but sometimes you can't pick your forum.  Because our exchange echoes a debate beginning to build statewide as the legislature heads toward the last half of the regular session, I post it here for whatever interest others may find in it as well.  I will update if the debate continues.

(Note:  Unlike other social media, Linked in posts the most recent comment first, so in order to read the discussion in order, after reading the initial entry (mine) its best to go to the bottom comment (Jack's initial comment) first and then work up.)



4 days ago
  • Bradford (Brad) Keithley
    Bradford (Brad) Keithley Jack ... The reason the state needs to act now is to correct what, in retrospect, was an overreach that occurred in 2007. The move that year from a production tax approach comparable to that used elsewhere in the US to the current system has made most Alaska investments -- including those necessary to increase the ultimate recovery rate inside existing fields (and regardless of whether made by current or future producers) -- much less competitive with alternative opportunities. The state is not "helping" investors by changing the existing tax structure. Instead, the state is helping itself by reducing Alaska's government take a level necessary to reignite needed levels of investment.21 minutes ago
  • Jack Roderick
    Jack Roderick I COULDN'T DISAGREE WITH YOU MORE. THE MAJORS HAVE KNOWN FOR DECADES THAT THEY WOULD EVENTUALLY HAVE TO PRODUCE THE KNOWN RESERVES IN THE "LEGACY FIELDS." WHY SHOULD THE STATE HELP THEM DO THAT NOW? OIL WILL BE PRODUCED BY THEM OR OTHER COMPANIES THE SELL TO. NEW OIL, BY OTHER COMPANIES, IS THE LONG TERM ANSWER FOR ALASKA.1 day ago
  • Bradford (Brad) Keithley
    DeleteBradford (Brad) Keithley Jack ... The reason the ADN is wrong is because it misses the point that the best near term opportunity for developing additional production is through additional investment in the existing fields. As I have explained elsewhere, there is more oil remaining in the existing fields than outside them, but it is largely economically challenged oil. See, "Alaska Oil Tax Policy| Ships Passing in the Night," http://bit.ly/Yh98vZ. We need to adopt competitive tax rates within the existing fields in order to attract the investment necessary to develop it.2 days ago
  • Jack Roderick
    Jack Roderick The ADN is right!3 days ago