1) Fiscal certainty (i.e. stable taxes); and
2) The right to keep sitting on the natural gas reserves until the optimum time for development. They've been banking these known reserves for 40 years, and they're perfectly content to wait another 40 years if that's what it takes. The oil companies have lots of large natural gas projects around the world to choose from, and they wish to prioritize these according to their own business needs.
That does cut right to the heart of the issue.
I can understand their desire for stable tax rates. But when have they ever been stable? Cannot any government can change tax rates at nearly any time, with the public's only recourse to throw their elected officials out of office?
The natural gas projects around the world don't do much to help supplies in the U.S. other than via LNG. Right now the world price for LNG is higher than in the U.S. so tankers are delivering their loads to other destinations. It's going to take higher prices yet here to change that situation.
The Alaska energy issue forcefully brings home to me something that I have long thought about.
Corporations have 5 different constituencies that they need to try and satisfy.
...Stockholders
...Customers
...Employees
...Suppliers
...Communities in which they operate
If you wish, "communities" can consist in a larger sense of the states in which they operate or even the national interest. Think General Motors during WWII, for example.
Everybody can pretty much decide for themselves the order of importance. Rather often, the needs, wants, and desires of these different constituencies can conflict. Successful companies find a way to somehow balance these needs. But public policy issues sometimes create conflicts wherein the interests of one or more of these constituencies must take a back seat. That seems to be the case now wrt energy issues. It may be in Conoco Phillips best interests long term to defer development of Alaskan gas reserves. But if high energy prices are creating a negative effect on the national economy, should they not develop these reserves ASAP? My answer would be yes, they should. But I agree the issue is debatable.
In a way, it is analogous to which interest an elected official owes his primary loyalty. As a member of the House, should you vote for and support what you perceive to be the best interests of the residents of your Congressional District? Or your State? Or the country?
It seems that Sarah Palin doesn't have any conflicts about supporting what she perceives to be the interests of the citizens of Alaska. Which, I believe, accounts for her huge popularity there. |
