Price of gas is high? /Cost of oil stupes

[b2r]

The Alaska Permanent Fund is a constitutionally established permanent fund, managed by a semi-independent corporation, established by Alaska in 1976, primarily by the efforts of then Governor Jay Hammond. Shortly after the oil from Alaska’s North Slope began flowing to market through the Trans-Alaska Pipeline System, the Permanent Fund was created by an amendment to the Alaska Constitution to be an investment for at least 25% of proceeds from some mineral (such as oil and gas) sales or royalties. This does not mean the fund is solely funded by oil revenue. The Fund does not include either property taxes on oil company property nor income tax from oil corporations, so the minimum 25% deposit is closer to 11% if those sources were also considered. The Alaska Permanent Fund sets aside a certain share of oil revenues to continue benefiting current and all future generations of Alaskans. Many citizens[who?] also believed that the legislature too quickly and too inefficiently spent the $900 million bonus the state got in 1969 after leasing out the oil fields. This belief spurred a desire to put some oil revenues out of direct political control.

The Alaska Permanent Fund Corporation manages the assets of both the Permanent Fund and other state investments, but spending Fund income is up to the Legislature. The Corporation is to manage for maximum prudent return, and not—as some Alaskans at first wanted—as a development bank for in-state projects. The Fund grew from an initial investment of $734,000 in 1977 to approximately $28 billion as of March 2008. Some growth was due to good management, some to inflationary re-investment, and some via legislative decisions to deposit extra income during boom years. Each year, the fund's realized earnings are split between inflation-proofing, operating expenses, and the annual Permanent Fund Dividend.

In 2008, Jeffrey Scott took over as Chief Investment Officer (CIO). Much of the assets are managed by five external managers: Pacific Investment Co., Bridgewater Associates, AQR Capital Management, GMO and Goldman Sachs Asset Management.[1]

Dividends and spending
While the Permanent Fund generally generated large surpluses even after payment of the Dividend [PFD], the state general fund operated at a substantial deficit. However, the consolidated account of both General and Permanent Funds usually shows a surplus. The Funds' ultimate uses were never clearly spelled out at its inception, leaving no current consensus over what role Fund earning should play in the current and expected state budget shortfalls. However, some people argue that the original intent was to fund state government after the temporary oil riches ceased, while others note that the Fund's intent changed from its 1976 origin when in 1982 the Dividend program began. Public opinion strongly favors the Dividend program. Indeed, in 1999, with oil prices going as low as $9 per barrel and Alaska's oil consultant Daniel Yergin forecasting low prices "for the foreseeable future", the State put an advisory vote before Alaskans, asking if government could spend "some" part of Permanent Fund earning for government purposes. Gov. Knowles, Lt. Gov. Ulmer, and many other elected officials urged a "yes" vote. Campaign spending greatly favored the "yes" side. The public voted "no" by nearly 84%. (Oil prices rose dramatically, starting about two weeks after Yergin's prediction, to above $60 per barrel, though the quantity produced continues to fall.) Many Alaskans now think of it as a "permanent dividend fund", much to the dismay of "original intent" advocates. Perceived support of the dividend program is so universally strong that it ensures the dividend's continuity and the protection of the Fund's principal, since any measure characterized as negatively impacting dividend payouts represents a loss to the entire populace. That is, legislators willing to appropriate the Fund's annual earnings are constrained by the politically suicidal nature of any decrease in the public's dividend.

www.google.com/url?sa=t&source=news&cd=1&sqi=2&ved=0CDIQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FAlaska_Permanent_Fund&ei=Ruc5TZv6OJS4sQO8qr2DAw&usg=AFQjCNFCNlB2-Qre0TvqIuHmCsHSdoLoUg

[b2r]

Last week's spill along the 800-mile (1,280 kilometer) line was measured at just 317 barrels, but it provided a glimpse at how a future winter shutdown might snowball into calamity.

The incident quickly led to nearly 5 million barrels of oil being shut in. It was the second-longest outage in the line's history, and the second major unplanned shutdown in eight months, after a much larger spill idled the line last May.

Crude futures rose 4.4 percent in three trading days after the outage, and Brent oil surged to 27-month highs just shy of $100 a barrel.

Pipeline operator Alyeska, whose top stakeholder is BP Plc, faced "major risk" during the incident, Barrett said, but its highly-trained crews responded effectively this time.

Alaskan oil fields, including the largest U.S. oil field, BP-operated Prudhoe Bay, are in decline and now pump less than a third of 1988 peak levels above 2 million barrels a day. That has cut the flow of crude on TAPS by 75 percent since its peak, to around 630,000 bpd this year.

Volumes should thin another 15 percent by 2019 to 524,000 bpd, according to a state government estimate. Some say the decline could be even faster.

www.google.com/url?sa=t&source=news&cd=1&sqi=2&ved=0CDUQqQIwAA&url=http%3A%2F%2Fwww.reuters.com%2Farticle%2FidUSTRE70K4KW20110121&ei=S-s5Tcp1juSxA4_ridUD&usg=AFQjCNHe9kyN8oEY6fzFExHPCn94517PkA

[b2r]

Eric Lidji

For Petroleum News


The state of offshore drilling in Alaska’s Arctic can be summed up in one word: uncertain.

It’s uncertain if the U.S. government will allow oil companies to drill exploration wells in the Beaufort and Chukchi seas, located off the northern and northwestern coasts of Alaska, respectively. If that drilling does go forward, it’s uncertain if it will yield discoveries large enough to justify the high cost of Arctic development. Should that drilling go wrong, it is uncertain if the response systems in place will work as intended.

One thing is certain, though: offshore northern Alaska, particularly the outer continental shelf of the Beaufort and Chukchi seas, is one of the most promising undeveloped oil and gas provinces in the United States.

The complexity of proving and developing those resources is breeding conflicting interests.

Oil companies like Shell, ConocoPhillips and Statoil see a chance to replace reserves, increase domestic production, offset declining throughput in the trans-Alaska oil pipeline and improve the economics of frontier areas like the National Petroleum Reserve-Alaska.

www.google.com/url?sa=t&source=news&cd=1&sqi=2&ved=0CDQQqQIwAA&url=http%3A%2F%2Fwww.petroleumnews.com%2Fpntruncate%2F614419950.shtml&ei=Pe05Ta61OYe4sAOxmb3ZAw&usg=AFQjCNGb_HOHnQTki6SI-DQtcNtjTofF-Q

[Value Buy]

Jan 21, 2011 9:43:34 GMT -5 floridayankee said:

There are very few consumer products whose price is driven so overwhelmingly by the price of the commodity behind it, as is the case for gasoline and crude oil.

What am I missing here? I'd imagine the retail price for a lot of products is driven mostly by the cost of the raw materials used to produce them.

IE: If corn tripled in price, wouldn't one expect the cost of corn flakes to reflect that increase?

Watch the Gasoline futures. whatever price they are trading on the most recent contract month, look for retail prices to trend about 65 to 70 cents a gallon above the futures price.
This represents the profit of the wholesalers and the retail outlets, plus the federal and state taxes that are charged to the public.
This is not 100% accurate, but will give you a good idea if the retailers or refiners are gouging you.

[deziloooooo]

I am just reprinting a post of mine from the other oil thread..prices of a barrell of crude over the years. ....
I am going to use this atricle in both this and the other oil thread..it fits. Interesting article , actually just the facts mame just the facts, price of cost of barrel of oil going back to when they kept a record of these things..some where there is the beginning of OPEC, the nationalization of the assetts of the country by the country, thjen population growth aand industrialization of more countries, some quite hugh, see India and naturally China...my time kind of when got to be on my own, it was $3 per barrel, LOL....

www.ioga.com/Special/crudeoil_Hist.htm

[handyman2]

My question is this, the price of a barrel of oil today will not reach the refinery for at least a couple of months at best? So why do the oil companies raise prices on todays gas at the pump when thay did not pay that price for the oil in the first place. Seems like gas should go up when that oil that is now higher is shipped to the stations.

[deziloooooo]

Jan 21, 2011 20:51:26 GMT -5 handyman2 said:

My question is this, the price of a barrel of oil today will not reach the refinery for at least a couple of months at best? So why do the oil companies raise prices on todays gas at the pump when thay did not pay that price for the oil in the first place. Seems like gas should go up when that oil that is now higher is shipped to the stations.

They can get away with it?