Low Oil Price and Alaska Economy Thread (2014, income tax)

[mitgreb]

Originally Posted by mongazid

Just a side note. I paid $3.19 for gas today. Cheapest I have ever paid since I have been in Alaska.

Welcome to Alaska!

[NomadicBear]

Originally Posted by JasonAnc

Isn't this really a two-part equation?

There's the cost to explore for, develop and extract from a new field... Always quoted in the media as something pretty high... $70, $90, $110 a barrel...

And then there's the cost of maintaining production at an existing facility... Which is naturally going to be lower. That's the number you hear where like the Saudis supposedly can keep pumping until oil is below $30 a gallon, And the N Dakota frackers supposedly will keep going until it's around $50, and Slope stuff until it's around $45 or so.

I think the reason that nobody is stopping exploration or anything like that yet is because everyone knows this is now due to market manipulation, not natural market forces. As in, it will be short term, so there's no reason to shut down the exploration 'pipeline' of work. I think the Saudis/OPEC are going to have to carry on like this for quite a while longer before they start impacting things the way they apparently want to.

The problem is I think you've got it backwards. These lower prices ARE the natural market forces, and $100 per barrel oil was based upon speculation and little else. The massive amount of oil on the market could no longer be ignored, and that's why prices are crashing. Too many of these hedge funds and investment banks got on the wrong side of the bet- high dollar oil- and now they're getting crushed just like in 2008. Oil was in a massive speculative bubble, and that bubble just popped- again.

[NomadicBear]

Originally Posted by JasonAnc

Isn't this really a two-part equation?

There's the cost to explore for, develop and extract from a new field... Always quoted in the media as something pretty high... $70, $90, $110 a barrel...

And then there's the cost of maintaining production at an existing facility... Which is naturally going to be lower. That's the number you hear where like the Saudis supposedly can keep pumping until oil is below $30 a gallon, And the N Dakota frackers supposedly will keep going until it's around $50, and Slope stuff until it's around $45 or so.

I think the reason that nobody is stopping exploration or anything like that yet is because everyone knows this is now due to market manipulation, not natural market forces. As in, it will be short term, so there's no reason to shut down the exploration 'pipeline' of work. I think the Saudis/OPEC are going to have to carry on like this for quite a while longer before they start impacting things the way they apparently want to.

The problem is I think you've got it backwards. These lower prices ARE the natural market forces, and $100 per barrel oil was based upon speculation and little else. The enormous amount of oil on the market could no longer be ignored, and that's why prices are crashing. Too many of these hedge funds and investment banks got caught on the wrong side of the bet- high dollar oil- and now they're getting crushed just like in 2008. Oil was in a massive speculative bubble, and that bubble just popped- again.

OPEC doesn't control the price of oil like they once did, and they're finding that out the hard way. They can cut production, and all other producers will say "thank you, we'll continue pumping as much oil as we can produce, and sell it all." They are between a rock and a hard place. They NEED the money badly, because they've got their social obligations. If they voluntarily cut back production, they're cutting their own throats.

[richelles]

Originally Posted by Dakster

In a way I thought that, that is what we were doing - until of course - I found out that we are exporting GAS and that is our #1 export. I am not sure how much oil we export, but we still need imports of oil to "survive". Even if we export it, we still need to import it. I guess buying low and selling high, I hope...

Fracking, IIRC, was supposed to bridge the gap between what we produce domestically and what we import.

I just heard on the news that our beloved Congress is going to remove the ban on exporting American Oil which brings me to a serious question. Is it possible those dummies with too much vacation time are secretly reading this forum and acting on what we are arguing about? They want to raise by a factor of 100 how much an individual can give to the politicians without creating a problem for excessive contributions. Is there a connection between the people who want to export oil and the congress people who want to get money given to them? I think it is a mistake for the US to export oil since we'll need all we sell now in the future and once we sell what we have we wont have it any more. Seems like we could see the future without oil for us and wishing we hadn't sold what we had.

[NomadicBear]

Whoa, how come my edit showed up as two posts? Weird.

[Dakster]

I was wondering that myself NomadicBear about your double post. May want to email Rance about it, he can get rid of double posts.

Anyways, your post makes sense to me and OPEC is in a rock and hard place. ALTHOUGH, if they would have saved money for a rainy day and/or done something else with it, they wouldn't be hurting as much. Really, Venezuela and I'l go out on a limb and say Russia will hurt much more before the middle east will.

Richelles - See that just ticks me off. Once we produce more oil than we can use and our SPR and whatever other storage facilities are full - then maybe. Until then... IT shouldn't be allowed. Then again, that starts to sound like a communist society rather than capitalistic.

[NomadicBear]

Originally Posted by richelles

I just heard on the news that our beloved Congress is going to remove the ban on exporting American Oil which brings me to a serious question. Is it possible those dummies with too much vacation time are secretly reading this forum and acting on what we are arguing about? They want to raise by a factor of 100 how much an individual can give to the politicians without creating a problem for excessive contributions. Is there a connection between the people who want to export oil and the congress people who want to get money given to them? I think it is a mistake for the US to export oil since we'll need all we sell now in the future and once we sell what we have we wont have it any more. Seems like we could see the future without oil for us and wishing we hadn't sold what we had.

Do you really have to ask? And yes, it is a huge mistake to export oil. But, the powers that be DO NOT want anything affordable for the masses. They're hell bent on high prices for food, housing, fuel, education, and everything else under the sun. They want a populace which is hopelessly in debt up to their eyeballs, with no hope of ever getting out.

[RayinAK]

If the trend continues, say goodbye to the PDF, and welcome an income tax:
Alaska faces $3.5 billion deficit amid lower oil prices - Fairbanks Daily News-Miner: Alaska News

[Music_Man]

PFD not PDF, They have been trying to get their hands on it for a long time. When I moved here there was a income tax, and after the oil money started rolling in they dropped it.

[NomadicBear]

Oil is tanking again today. It's trimmed its losses, but is still down $1.75 per barrel to $58.19 right now. It was as low as $57.34.

I think real estate prices in places like Alaska, North Dakota, etc. will get slaughtered if this goes on for quite some time, just like in the Texas oil bust of the 80's. You almost couldn't give a house away. If that happens, I'd be interested in picking up a small cabin on some land somewhere at a good price. I have no interest in expensive houses and land in Alaska as it would likely only be part time I'd ever use it.