I feel a factual response is needed to the letter by Phyllis Mains (Journal, Oct.).
Mains incorrectly states that because oil sells for $50/barrel and costs $90/barrel to extract it in the Arctic, that there is a loss of revenue for the taxpayer. In fact, the taxpayer receives an overriding royalty (typically 16.7 percent) for the value of the oil and gas produced.
The higher the price for oil and gas, the more royalty we, the taxpayers, receive. Obviously, only oil companies and their shareholders lose revenue when extraction costs exceed revenue. Income tax on any profit is 35 percent, benefiting us, the taxpayers.
She also incorrectly states the taxpayer pays for all of the expensive infrastructure needed for drilling, like roads, well pads, etc., “increasing the burden to taxpayers.” There is no taxpayer burden.
Oil companies pay for everything from conception to production.
On federal lands, before drilling, oil companies are required to hire archaeologists, biologists, etc., to study the potential drilling area and submit their reports to the federal government for approval and further potential restrictions.
In some cases, a complete environmental study is done, also paid by the oil companies. There is a fee required for just filing the drilling permit and another competitive bid fee paid to us taxpayers for the right to drill in the first place.
It seems people on both sides love to insinuate their emotional opinions are facts.
Rick Corbitt
Dolores
