October 11, 2007
Thursday

Today two Anchorage Democratic Representatives, Les Gara and Harry Crawford, called on the oil industry to be truthful in its current advertising campaign aimed at preventing fixes to Alaska profits-based oil tax law.

"Advertising should inform, not mislead the public," Gara said. "It would be nice if the oil companies would reveal the truth ­ that Exxon, Conoco Philips and British Petroleum earn higher profit margins in Alaska than almost anywhere else in the world." Gara, along with Crawford, cites Conoco Phillips' own 2006 Annual Report.

Crawford and Gara wrote to ask the major oil companies, and their industry associations (The Alaska Oil and Gas Association and The Alliance), to reveal what is shown in Conoco Phillips 2006 Annual Report: that Conoco's profit margins are higher in Alaska than they are in Africa, Russia, the Middle East, Europe, the Lower 48 and Canada. While profit margins in those areas range between 0 percent and 30 percent, Conoco's Alaska profit margins hit a staggering 35 percent in 2006.

In reviewing Conoco's profit report, Crawford noted, "If a 35 percent profit margin wasn't enough for Conoco to increase investment, why did they invest in the Middle East and Africa, where they report profit margins of just 7 percent? Just how much would Conoco want to increase investment in Alaska?"

Instead of revealing their high Alaska profits, industry association ads have aimed to create the impression that the companies aren't making enough money in Alaska, and that the flawed PPT oil tax law, adopted last legislative session, doesn't need to be fixed. Gara and Crawford, with other Democrats, asked Governor Palin to call a special session the day after the federal indictments in the current corruption scandal were issued, and Palin announced the special session a week later.

Exxon and British Petroleum, also co-leaseholders at the highly profitable Prudhoe Bay oil field ­ North America's largest ­ do not report their Alaska profits publicly. Gara and Crawford have asked those companies to share that information.

It is believed most of those profits came from Conoco's operations at highly profitable fields like Prudhoe Bay, Kuparuk and Alpine. Crawford and Gara have stated that those fields should pay a stronger tax than new, less profitable fields, and they are pushing a proposal to do that during this coming special session.

Related:

Crawford, Gara letter to oil companies on ads [pdf]
http://www.sitnews.us/1007news/101107/101107_Crawford_Gara_letter.pdf

2006 Conoco Profits [pdf]
http://www.sitnews.us/1007news/101107/2006_Conoco_Profits.pdf

Source of News:

Representative Les Gara (D- Anchorage)
www.gara.akdemocrats.org

 

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