We should demand top dollar for oil

COMMENTFebruary 11, 2012 

Sometimes I have to boil things down. Bear with me on this one.

Al is my imaginary friend. For years, Al and his family have owned an apple orchard. Years ago Al hired three of the best apple-picking companies in the world to pick his apples.

Al and the Pickers bought a big truck to ship the apples to market. They told Al he would need to pay for the gas. Al asked, "How much will that cost?"

"We'll let you know," they said.

The next day, the Pickers talked it over. "Al's desperate to get his apples to market," one said. "He needs us. We can charge him whatever we want."

And so they did.

Al got mad and stomped his feet. "We had a deal!" he cried.

But after shipping some apples, the Pickers decided they needed even more money. Until they got it, the truck Al helped pay for would sit empty and the apples would hang on the trees.

"You need us, Al," they said. "You could take us to court, but we'll just go pick apples in someone else's orchard and wait you out. Now be a good fellow and give us a bigger cut of the harvest."

Al thought to himself, "These Pickers act like my apples belong to them. They're supposed to work for me -- those are my apple trees!"

Al started asking questions. He found out he'd paid more than his share for the truck and gas. He realized apple buyers were begging for more apples while his went unpicked. He discovered that other orchard owners weren't paying their Pickers as much as he was paying his. What should he do?

That's pretty much the question sitting in front of the Alaska Legislature right now.

Alaska is not like other states. Our constitution makes all of us the common owners of the state's natural resources. Like Al, we depend on those resources to pay almost all of our expenses.

There's no reason for Alaskans to feel guilty about trying to get top dollar for our resources. We know the Pickers are going to squeeze us for every buck they can.

This week the Senate Resource Committee took testimony from two attorneys who worked on the recent pipeline property tax litigation between several local governments and the trans-Alaska pipeline owners.

The attorneys provided the senators with several documents not previously available to the public.

The first was a confidential memo dated May 20, 1977. In it, BP Pipelines said, "All the TAPS owners should want to file the highest possible tariff." Why?

"File a high tariff in order to minimize the combined government income from the field and the pipeline."

Here's how that works: The pipeline owners charge themselves a high price to move oil from the North Slope, the high transportation cost lowers the value of the oil, lower-value oil means less taxes -- more money for the producers and less for Alaskans.

In a memo dated Feb. 9, 2004, BP said, "Alaska's role in BP's portfolio is to provide a stable production base and cash flow to fuel growth elsewhere in the business while improving margins and returns." Put more simply, we're a cow and BP is a milkmaid.

The oil companies do what they're supposed to do -- grab every apple they can for their shareholders.

I'm tempted to blame state government for not standing up for us, but the plain fact is that our public servants are mismatched against these multinational heavyweights. And they're not going to fight if Alaskans don't demand that they hang tough.

Shannyn Moore can be heard weekdays from 11 a.m. to 2 p.m. and 6 p.m. to 9 p.m. on KOAN 1020 AM/95.5 FM radio. Her weekly TV show can be seen Saturdays and Sundays at 3 p.m. on KYUR Channel 13.

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