"What Goes Around Comes Around" - Sinopec and COP Make Syncrude Deal

See Our Earlier Oil/Gas/Cruise Ship Tax Policy Comment

Alaska Dispatch by Rena Delbridge.  Senators may have tightened up the title of a gas tax bill to curtail monkey business in the House, but that hasn't smoothed the bill's progress before representatives.  Now an afternoon hearing is delayed until the full House Resources committee can meet with Attorney General Dan Sullivan (NGP Photo-l), who has briefed two members already with information panel chair Rep. Craig Johnson, R-Anchorage, thinks will smooth out disagreements.  (Our Comment: While well intended, this bill would have the effect of increasing Alaska tax on natural gas, thus indirectly decreasing the economics of a gas pipeline project and directly lowering the attractiveness of Alaska as an oil and gas investment destination.  -dh)

Associated Press by Becky Bohrer.  An agreement has been signed to settle a federal lawsuit over Alaska's cruise-ship passenger tax. ... The deal was signed Sunday by Attorney General Dan Sullivan and Alaska Cruise Association President John Binkley (NGP Photo-r).   

See comment below re: "What Goes Around Comes Around".

E&E News (Subscription required) reports, “As the administration prepares to raise royalty rates for federal oil and gas leases, two Interior agencies today announced they will review lease terms in other countries and compare them to the U.S. take. MMS and BLM will jointly contract for the competitive study, with a final report expected nine months after the contract is awarded, the agencies said. Comparison of the royalties "may reveal the potential for greater revenues to the federal government," they added. MMS Director Liz Birnbaum said the study comes in response to a 2008 GAO report that suggested the return from federal oil and gas leases is lower than what other resource owners worldwide are receiving. Interior does not routinely monitor the systems used in other countries, she said, but should consider international comparisons in setting the terms of its leases. "The administration is committed to ensuring that taxpayers receive a fair return from mineral production on their lands, " BLM Director Bob Abbey said. "This study will provide some common-sense grounds for comparison as we evaluate our royalty rates and our oil and gas fiscal policies in the context of global markets."  (Our comment: "What goes around comes around."  Alaska wants and desperately needs more federal leasing programs--and Federal revenue sharing.  On Alaska's own lands, Alaska produces a tax rate that is among the most investment-unfriendly in the world.  The Federal government--currently in control of environmental activists who wish to see less oil and gas activity--conducts a comparative study.  Surely, the study will find: "Alaska's high rates haven't deterred investment," saying this because no one can prove how it would have been the other way, "therefore, we'll raise our lease payment/royalty requirements which will enable us to pay revenue sharing to Alaska...which will assure Alaskan support for imposing more costs on 'big oil'".  This will result in less interest in Alaska exploration and development on Federal lands here, producing fewer Alaska jobs.  What goes around comes around.  -dh)

Vancouver Sun/Calgary Herald by Shaun Polczer.   Refining giant Sinopec more than doubled China's presence in Alberta's oilsands by paying $4.65 billion for ConocoPhillips' nine per cent stake in Syncrude Canada Ltd.