Photo Credit: Minale Tattersfield Roadside Retail BP’s tankers occasionally return to Valdez with millions of gallons of Alaskan oil on board, reports The San Francisco Chronicle, the Houston Chronicle, and the Fairbanks News Miner. With Valdez holding tanks 90 percent full, tankers top-off and return again to West Coast refineries that are still too full to receive their loads, because BP’s refining and retail capacity is maxed. Clearly BP is prioritizing just-in-time delivery to meet the maximum market share and profitability of BP’s West Coast refined products.
Alaska’s oil has been BP’s cash cow since their subsidiary Sohio Petroleum became their face in Alaska, in 1970. Before acquiring ARCO in 2000, BP successfully asked Congress to lift the ban on the export of North Slope crude. If BP were truly interested in exporting crude today, tankers wouldn’t be returning to Valdez with oil on board. However, after acquiring ARCO’s West Coast refineries and retail stations, BP’s incentives changed to the more profitable business of refining and retailing.
In 1981, I was in the Legislature when the biggest tax break giveaway ever was voted on; — a tax system nicknamed ELF. Prior to voting, an oil lobbyist told me they were losing so much money on their Alaskan investments, they were considering shutting down and leaving. Sound familiar? Shortly after voting for ELF, I uncovered a well hidden letter to stockholders from Sohio’s president. He explained that Sohio was practically drowning in cash. The letter was written before we gave them their 1981 tax break. –– I copied the letter and distributed it to all legislators, and soon became the first political target of BP’s surrogate, VECO.
In the mid 1980’s it became obvious that other countries were getting far more for their oil than Alaska. Even countries with expensive deep water platforms were making more. Between 1980 and 2000, BP went from the 13th largest oil company in the world to the 3rd largest. They did it with profits that rightfully belonged to Alaska. Profits that would have built roads and fattened dividend checks had it not been for VECO’s bribery and fraudulent representations by oil lobbyists. Given the chance, a jury might find the oil companies owe Alaska a few billion dollars.
BP controls Alaskan crude from the well head to the gas pump. They take Alaska’s oil for the cost of production and transportation, plus local, state and federal taxes. BP’s crude costs add up to about 28 percent less than independent nonproducing refiners pay. The life of BP’s cash cow is extended by trickling Prudhoe’s production; and Governor Parnell’s tax cuts won’t change BP’s incentives.
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