Alaska Democrats Urge BP Not to Deduct the Cost of Fixinig Their Mess

[Whoozyerdaddy]

This is more of a national story than an Alaskan one. The story itself concerns a new oil tax package we just passed. It doesn't look like BP can deduct their way out of paying for the repairs they are making to their neglected pipeline system in Prudhoe

BUT...

What about federal taxes? Taxes on corporations are incurred on profits. Repairing those lines on the Slope will impact their profits. It's one thing to deduct routine maintenance costs. But to be able to deduct the costs associated with negligence and incompetence... Stupidity should be painful... and expensive. And you shouldn't be able to offset the cost with a tax deduction.

Apparently our new tax system up here took things like this into account and BP shouldn't be able to stick the state with the repair bill but they sure as hell could stick the american tax payer for it. (Or part of it anyway) So not only do they completely eff up our domestic oil supply but they could take a big fat tax deduction to offset the cost of fixing their negligence. The US congress should take the same action against BP that our legislators are up here.


Link

Don't deduct Prudhoe fix, BP is urged
DEMOCRATS: Lawmakers seek a pledge not to write off cost of repair.

By RICHARD RICHTMYER
Anchorage Daily News

Published: September 2, 2006
Last Modified: September 2, 2006 at 02:06 AM


Legislative Democrats have asked BP to pledge that it won't use a newly enacted oil tax law to write off the costs of repairing miles of corroded Prudhoe Bay pipelines.


The law, enacted last month, bases the tax on oil company profits rather than production levels and offers incentives for oil companies to explore for new discoveries, including a tax credit of up to 20 percent of a company's capital spending in Alaska. It also lets the oil companies deduct some of their operation and maintenance costs.

Democratic lawmakers blasted the new tax structure while it was being debated in Juneau, saying the 41-page bill had too many loopholes that would let the oil companies manipulate the system and pay less tax than they should. They also said it would let BP get a tax break from the costs of fixing the corroded Prudhoe pipes.

Several of them sent a letter to BP Exploration (Alaska) Inc. president Steve Marshall, asking him to pledge that the company will not use the new law to offset the repair costs.

"I want to hear their position on how they're going to use this new law," said Rep. Les Gara, D-Anchorage, one of four lawmakers who signed the letter.

"The smart thing for them to do would be to say, 'Look, we're not going to charge these costs to the people of the state,'?" Gara said. "But the business decision for them would be, you gave us the money and we're going to take it."

Steve Rinehart, a BP spokesman in Anchorage, said the company had received the letter and planned to reply. He wouldn't say when. BP does not have a firm estimate yet of how much the repairs will cost, he said.

Gov. Frank Murkowski proposed the new oil tax last winter, and lawmakers struggled for six months to pass it.

Dan Dickinson, a former state tax director who worked as a consultant for Murkowski on the new oil tax law, said there are many provisions in it that could keep BP from using the Prudhoe repair costs to lower its tax bill.

For one thing, BP is not the sole owner of the Prudhoe field but operates it on behalf of partners including Conoco Phillips and Exxon Mobil as well as smaller oil companies, and the new law says that unless all of its partners agree to pay their share of the repair costs BP cannot write it off, Dickinson said.

"If the other owners say, 'You screwed up and we don't have to pay for it,' they can neither get the deduction or the credit," he said.

Dickinson also noted that the new law also disallows deducting certain kinds of operating and maintenance costs. They include costs arising from fraud, willful misconduct or gross negligence, and costs related to spills.

The state is unlikely to find out how BP plans to account for the repair costs until it files a tax return next March. If its partners disagree with the tax plan, the matter likely wouldn't be resolved for at least a year after that, Dickinson said.

 

[sandorski]

If they managed to do it, the EPA or other Agency should fine them up the wazzoo until the fines are 2x the Tax savings. That'd learn them.

 

[Whoozyerdaddy]

Originally posted by: sandorski
If they managed to do it, the EPA or other Agency should fine them up the wazzoo until the fines are 2x the Tax savings. That'd learn them.

I feel ya, but I don't think the EPA can fine you if there isn't a mess to clean up.

 

[sandorski]

Originally posted by: Whoozyerdaddy

Originally posted by: sandorski
If they managed to do it, the EPA or other Agency should fine them up the wazzoo until the fines are 2x the Tax savings. That'd learn them.

I feel ya, but I don't think the EPA can fine you if there isn't a mess to clean up.

True

 

[Strk]

Originally posted by: Whoozyerdaddy

Originally posted by: sandorski
If they managed to do it, the EPA or other Agency should fine them up the wazzoo until the fines are 2x the Tax savings. That'd learn them.

I feel ya, but I don't think the EPA can fine you if there isn't a mess to clean up.

How much were they fined for that earlier mess though?

 

[Johntk5]

The pipeline disaster is why we should stop drilling there. Have people in Alaska wised up and stop supporting needless drilling yet.

 

[Whoozyerdaddy]

Originally posted by: Strk

Originally posted by: Whoozyerdaddy

Originally posted by: sandorski
If they managed to do it, the EPA or other Agency should fine them up the wazzoo until the fines are 2x the Tax savings. That'd learn them.

I feel ya, but I don't think the EPA can fine you if there isn't a mess to clean up.

How much were they fined for that earlier mess though?

That case is still being reviewed IIRC so no fines yet. I think it's now being folded into the latest incident and they are being treated as the same problem. The whole thing is also under review for possible criminal charges. It will take a while to sort it all out but I have no doubt that BP is in for a big hit when it's all said and done.

 

[Johntk5]

Originally posted by: Whoozyerdaddy

Originally posted by: Strk

Originally posted by: Whoozyerdaddy

Originally posted by: sandorski
If they managed to do it, the EPA or other Agency should fine them up the wazzoo until the fines are 2x the Tax savings. That'd learn them.

I feel ya, but I don't think the EPA can fine you if there isn't a mess to clean up.

How much were they fined for that earlier mess though?

That case is still being reviewed IIRC so no fines yet. I think it's now being folded into the latest incident and they are being treated as the same problem. The whole thing is also under review for possible criminal charges. It will take a while to sort it all out but I have no doubt that BP is in for a big hit when it's all said and done.

They should be fined. Terrible what happen. This should make Alaska take a good look at its drilling program. They should considure shutting it down.

 

[Whoozyerdaddy]

Originally posted by: Johntk5

Originally posted by: Whoozyerdaddy

Originally posted by: Strk

Originally posted by: Whoozyerdaddy

Originally posted by: sandorski
If they managed to do it, the EPA or other Agency should fine them up the wazzoo until the fines are 2x the Tax savings. That'd learn them.

I feel ya, but I don't think the EPA can fine you if there isn't a mess to clean up.

How much were they fined for that earlier mess though?

That case is still being reviewed IIRC so no fines yet. I think it's now being folded into the latest incident and they are being treated as the same problem. The whole thing is also under review for possible criminal charges. It will take a while to sort it all out but I have no doubt that BP is in for a big hit when it's all said and done.

They should be fined. Terrible what happen. This should make Alaska take a good look at its drilling program. They should considure shutting it down.

Are you for real? Or did you just come here to troll?

 

[XZeroII]

You realize that any money that they have to spend is going to be passed on to you and me, right? So if they are 'charged' an extra couple billion dollars, you can bet that prices will go up in order to compensate for that.

And Johntk5, I believe that I speak for most people when I say that you are stupid.

 

[Whoozyerdaddy]

Originally posted by: XZeroII
You realize that any money that they have to spend is going to be passed on to you and me, right? So if they are 'charged' an extra couple billion dollars, you can bet that prices will go up in order to compensate for that.

And Johntk5, I believe that I speak for most people when I say that you are stupid.

Except the oil guys don't set the prices, the commodities guys do. And in the grand scheme of global oil, losing 400,000 bbl a day isn't a very big deal.

 

[Strk]

Originally posted by: Whoozyerdaddy

Originally posted by: XZeroII
You realize that any money that they have to spend is going to be passed on to you and me, right? So if they are 'charged' an extra couple billion dollars, you can bet that prices will go up in order to compensate for that.

And Johntk5, I believe that I speak for most people when I say that you are stupid.

Except the oil guys don't set the prices, the commodities guys do. And in the grand scheme of global oil, losing 400,000 bbl a day isn't a very big deal.

Yeah, it's just easier to blame the oil companies for everything, although BP does have a lot to be blamed for this year though, although not for pricing.

 

[EagleKeeper]

Why not just kick BP off the slope?

 

[Whoozyerdaddy]

Originally posted by: EagleKeeper
Why not just kick BP off the slope?

I don't know that they can. That said, the current events combined with the spill from last winter (which was part of this whole mess) are being reviewed by the Alaska AG for possible criminal prosecution.

Now comes a long series of "ifs"

IF they are charged criminaly and IF they go to trial and IF they are convicted I SUPPOSE they MIGHT be kicked off as a punishment. I certainly wouldn't shed a tear over that.

So we'll see.

 

[dmcowen674]

Yep, pay pay pay over and over just like taxes.

The American sheeple love it though

 

[Whoozyerdaddy]

Originally posted by: dmcowen674
Yep, pay pay pay over and over just like taxes.

The American sheeple love it though

WTF are you talking about?

 

[Kwaipie]

WTH are we giving them tax credits for? "Here, BP, you're seeing record profits with no end in sight, have some tax credits to further build your mega-con-glom-corp." Makes me sick.

 

[Genx87]

While they were incompetent, setting a precedent that investing money into infrastructure improvements doesnt count against the bottom line is worse.

If the govt wants its money, fine them.

 

[Genx87]

Originally posted by: Johntk5
The pipeline disaster is why we should stop drilling there. Have people in Alaska wised up and stop supporting needless drilling yet.

60+% of our oil is imported, that is reason enough.

 

[Whoozyerdaddy]

Originally posted by: Genx87
While they were incompetent, setting a precedent that investing money into infrastructure improvements doesnt count against the bottom line is worse.

If the govt wants its money, fine them.

No no no... Infrastructure improvements and maintenance should always be deductable. Expenses incured as a result of gross mismanagement and negligence are what is being discussed here. BIG difference.

Originally posted by: Kwaipie
WTH are we giving them tax credits for? "Here, BP, you're seeing record profits with no end in sight, have some tax credits to further build your mega-con-glom-corp." Makes me sick.

You didn't read the link did you? Nobody is issuing tax credits. It's an argument about being able to deduct the cost of doing business. In this case Alaska is asking BP not to deduct the cost of the pipeline repair as it was their own stupidity that caused the problem and is not routine maintanance or infrastructure improvement.

In Alaska, we recently changed our oil tax system. Instead of taxing every barrel of oil that gets pumped out of our state we switched to taxing the oil company's profits. A dumb move inspired by people who are more concerned about how much "teh eval" oil comanies were making (which can be offset by crap like this) instead of how much oil they were taking out of the ground (which can't be manipulated).

 

[Kwaipie]

Originally posted by: Whoozyerdaddy

Originally posted by: Genx87
While they were incompetent, setting a precedent that investing money into infrastructure improvements doesnt count against the bottom line is worse.

If the govt wants its money, fine them.

No no no... Infrastructure improvements and maintenance should always be deductable. Expenses incured as a result of gross mismanagement and negligence are what is being discussed here. BIG difference.

Originally posted by: Kwaipie
WTH are we giving them tax credits for? "Here, BP, you're seeing record profits with no end in sight, have some tax credits to further build your mega-con-glom-corp." Makes me sick.

You didn't read the link did you? Nobody is issuing tax credits. It's an argument about being able to deduct the cost of doing business. In this case Alaska is asking BP not to deduct the cost of the pipeline repair as it was their own stupidity that caused the problem and is not routine maintanance or infrastructure improvement.

In Alaska, we recently changed our oil tax system. Instead of taxing every barrel of oil that gets pumped out of our state we switched to taxing the oil company's profits. A dumb move inspired by people who are more concerned about how much "teh eval" oil comanies were making (which can be offset by crap like this) instead of how much oil they were taking out of the ground (which can't be manipulated).

Actually, I did read the article.

The law, enacted last month, bases the tax on oil company profits rather than production levels and offers incentives for oil companies to explore for new discoveries, including a tax credit of up to 20 percent of a company's capital spending in Alaska.

 

[Whoozyerdaddy]

Originally posted by: Kwaipie

Originally posted by: Whoozyerdaddy

Originally posted by: Genx87
While they were incompetent, setting a precedent that investing money into infrastructure improvements doesnt count against the bottom line is worse.

If the govt wants its money, fine them.

No no no... Infrastructure improvements and maintenance should always be deductable. Expenses incured as a result of gross mismanagement and negligence are what is being discussed here. BIG difference.

Originally posted by: Kwaipie
WTH are we giving them tax credits for? "Here, BP, you're seeing record profits with no end in sight, have some tax credits to further build your mega-con-glom-corp." Makes me sick.

You didn't read the link did you? Nobody is issuing tax credits. It's an argument about being able to deduct the cost of doing business. In this case Alaska is asking BP not to deduct the cost of the pipeline repair as it was their own stupidity that caused the problem and is not routine maintanance or infrastructure improvement.

In Alaska, we recently changed our oil tax system. Instead of taxing every barrel of oil that gets pumped out of our state we switched to taxing the oil company's profits. A dumb move inspired by people who are more concerned about how much "teh eval" oil comanies were making (which can be offset by crap like this) instead of how much oil they were taking out of the ground (which can't be manipulated).

Actually, I did read the article.

The law, enacted last month, bases the tax on oil company profits rather than production levels and offers incentives for oil companies to explore for new discoveries, including a tax credit of up to 20 percent of a company's capital spending in Alaska.

Well duh... we want them to go find more oil so we can tax them. That's not the same thing as taking a tax deduction for negligence.