DEMOCRATS ASK OIL COMPANIES
FOR HONEST ADVERTISING
Gara, Crawford: "Show Alaskans your profit margins"
October 11, 2007
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.
Crawford, Gara letter to oil
companies on ads [pdf]
2006 Conoco Profits [pdf]
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Representative Les Gara (D-
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