Low prices, new tax mean less petroleum investment in Alaska
Originally published Thursday, November 20, 2008 at 8:09 a.m.
Updated Thursday, November 20, 2008 at 10:39 a.m.
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Stumble It!ANCHORAGE, Alaska -- Executives of major petroleum companies say work on some Alaska projects will be dialed back now that the price of crude oil has dropped.
BP Exploration (Alaska) Inc. president Doug Suttles said lower oil prices, escalating field costs and the state oil tax hike last year led BP to shelve some projects.
Suttles spoke Wednesday in Anchorage at the Resource Development Council's annual conference.
One project held up is a $120 million natural gas "partial processing" plant in the western Prudhoe Bay oil field.
The project would separate gas from the oil, water and gas that comes out of wells. Gas would be injected underground.
"We've just indefinitely suspended the project," Suttles said
BP and its partners also plan to drill fewer development wells next year, he said.
North Slope crude oil closed Wednesday at $49.12 per barrel.
Despite the falling price, industry executives said they plan to stay on track with other projects, including three new oil fields in the Beaufort Sea.
Jim Bowles, president of Conoco Phillips Alaska Inc., said the company plans to drill two holes this winter on the eastern fringes of the National Petroleum Reserve-Alaska.
Bowles said rapidly rising construction costs also are a challenge to the oil industry these days.
"The fundamental cost of our industry has changed over the last few years," he said.
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Even though these Oil companies have had again, record profits and receive tax breaks and subsidies from the Federal Government. Just an excuse.
These companies are businesses, not your favorite uncle who some believe own them part of the wealth they have created for their stock holders. 27 oil companies world wide have announced they will hold back on new projects due to the global economy in the upcoming year. We have all seen what happens to a a major industry when they make bad decisions, look at the big three auto industry. So a business makes a decision and draconinslacker you want to personalize it. Looks like good economic sense in this economy. They are doing what they do for the benefit of the share holders who own the company. They are not non profits.
How predictable! Big oil is already working on getting a new crop of corrupt bastards in there in Juneau, and a new Bill Allen will emerge to orchestrate a new tax "relief" bill so the struggling oil giants wont be forced to pick up their toys and go home. Any ideas as to who the new Allen will be? I hear Frank is looking for a new job..
Alaska, how bouts we not go down the same tired road this time and call their bluff! Don't follow Franks Murkowski's lead and let Exxon get back into Pt Thomson and instead get somebody else in there who is hungrier and more willing to do something besides stall. When are we going to wake up and realize it is all to their advantage to drag their feet. They drag their feet when the prices are high so as to keep supplies tight and prices up. They drag their feet when prices are low to try to tighten up supplies and make it go up. Their simple formula is brilliant as they are some of the most profitable corporations anywhere. Everyone else suffers except for the newspapers with those full page ads promising brighter days tomorrow if only we get "big government" out of their way. It is the BIG LIE that has been fed to this state for 30 years. I often wonder if they do get invited into ANWR how much they will drag their feet yet again. The excuses will be the same, that being if we don't give them the oil for a song they will just tie it all up and sit tight claiming that it is unprofitable. How predictable!
"They are doing what they do for the benefit of the share holders who own the company. They are not non profits."
Of course they are. Exxon did what it should have done by taking the PWS case to the high courts. They owe to no one but the shareholders. However, it is NOT the state or fed role to help these corporations make yet higher record profits either. Balance needs to be struck or their profits will always be out of line with the amount of risk they take on..
The big question here will be if Palin can compromise and deal with the oil giants to minimize the impact on Alaska. She hasn't shown that ability in the past. The new budget will be a big test for her ability to see into the future and adjust expenditures accordingly.
the real question is if alaskans are going to start allowing other forms of tax before our government has to tap the Permanent fund, or worse, collapses. it's funny the same people who are for no taxes, also want free money from the feds through uncle Ted!.... AND THEY CLAIM TO HATE WELFARE!
HA HA HA
hypocrites
Burn coal.
The stock market has lost 13 trillion dollars in the last few months. It fell again today to 7,550. Exactly how many more billions of dollars has the permanent fund lost with the market continuing to crash. How much has been lost in value of it's real estate holdings. Hopefully she will look at the future rather than ride it out with the surplus. The time to begin trimming the fat should start today, not a wait and see what next year will bring attitude. However, I doubt that she or the legislatures will have the guts to do it. They will most likely ride out the 90 days on the surplus money and wait till next year and see what the economy looks like then.
If you believe this story, then I would love to sell you this prime downhill ski resort, that is open year round. This prime ski slope property is nestled in the awesome ski hills of the alligator mountain range. A new log lodge with lounge & dining, dancing all night. From the lodge you will have breathtaking views, of the Everglades cascading down its steep slopes. See salmon & orca's spouting... Truly one of Florida's finest resorts.
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