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Oil incentives

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Posted: Monday, November 26, 2012 11:58 pm | Updated: 12:06 pm, Mon Jan 21, 2013.

Nov. 25, 2012

To the editor:

Here we are again, record high prices for gasoline and heating oil. Record high profits for oil companies.

Gov. Parnell cannot do anything about the high prices for residents in this state. We already produce oil in-state, have several in-state refineries and boast of very low taxes at the consumer pump. So why are gasoline and heating oil sometimes cheaper to purchase from Outside and deliver to Fairbanks? Remember how expensive it is for transportation to Alaska? Flint Hills certainly doesn’t have a clue.

Now Gov. Parnell and others have a plan. Give the oil companies billions more in tax credits so they do not become angry and go away. No guarantees of increased production, just the good will from the companies that have failed to make any significant progress in Alaska hire for more than 30 years.

These same companies sit upon proven reserves of oil and gas currently without any type of production. Why should they produce anything until the profit margin is higher and the taxes lower? You see, these companies can afford to wait us out. Each year they continue to make record profits and we continue to pay record prices. Why change anything? They also make healthy contributions to certain political candidates.

What we need are strong incentives for production and strong deterrents for a lack of production. A simple solution would be to increase the cost of the resource every year it sits in the ground without any production. Too costly? No problem. Give it back and we will thank you for your contribution and sell the resource to someone else. Someone who will actually produce it. This would reward a company for rapid or increased production and punish a company for a lack of action.

Now I realize our governor has some previous experience on this subject. After all, he used to work for the oil companies a few years back. I guess he still does.

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