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Fineberg Case Studies from Alaska in Oxford Journal:

Article in January 2014 Journal of World Energy Law and Business, "The United
States joins EITI: a case study in theory and practice," Cites Alaska Controversy over
SB 21 and Past Pipeline Overcharges as
Examples of Problems Dealing with Management of Extractive Industry Operations

By Richard A. Fineberg
February 11, 2014

In January 2014 Richard Fineberg published an article, "The United States joins EITI: a case study in theory and practice," in the Oxford University Press Journal of World Energy Law and Business (JWELB, Vol. 7, No. 1, pp. 46 - 62).

EITI (Extractive Industries Transparency Initiative) is a global organization that seeks that seeks to give citizens in resource-rich nations the economic information and understandings they need to formulate public policy. In September 2011 U.S. President Barack Obama announced that the U.S. would be joining EITI; in December 2012 the Obama administration established the U.S. EITI Multi-Stakeholders Group (MSG), a group of 21 selected representatives from government, industry and civil society who are responsible for oversight and implementation of reporting on extractive industry operations.

The introduction to the January 2014 JWELB special issue on transparency states that Fineberg, who serves as an alternate (non-voting) member of the U.S. EITI MSG civil sector, "has a unique perspective" on preparations for U.S. EITI compliance. In his article, which raises questions about U.S. efforts to date to join EITI, Fineberg notes that Alaska's experience with oil and gas development is relevant to EITI member nations because Alaska has an economy that is highly dependent on petroleum production and is physically isolated from the U.S. Lower-48 states. The JWELB article discusses Alaska's current controversy over SB 21 -- the current Alaska oil tax cut enacted by the state Legislature in April 2013 that has been challenged by a referendum that would repeal that legislation -- and Trans-Alaska Pipeline System (TAPS) overcharges.

Published six times a year at Oxford, JWELB is the official journal of the Association of Independent Petroleum Negotiators. In addition to Fineberg's article, the JWELB January 2014 special issue on transparency includes articles by Peter Eigen (former Chair of EITI and founder of Transparency International), Clare Short (current chair of EITI), Michael Barnier (member of the European Union commission), Peter Rees (Royal Dutch Shell legal director), Jack Russell (President of the Independent Petroleum Association of America) and Carl Hughes and Oliver Pendred (Deloitte LLP).

To access a PDF copy Fineberg's article from Oxford University Press for personal research and study purposes, click here. (Parties wishing to make commercial use of this article should contact journals.permissions@oup.com.)


Reports on TAPS Problems with Pigs

To download the December 2012 report on TAPS problems with pipeline pigs, click here.

To read the follow-up news analysis on TAPS pigs that appeared on TRUTHOUT (Feb. 25, 2013, on-line) and the FAIRBANKS DAILY NEWS-MINER (Mar. 10, 2013), as submitted, click here.

The Reduced Oil Imports Report:

Conservation Gains (2012 - 2030):
billion barrels

Arctic Refuge Drilling
(2012 - 2030):
billion barrels

Updated Report on EIA Data
(Jan. 14, 2012)

The synopsis of this report, which compares potential Arctic Refuge oil production to EIA's estimate of U.S. conservation gains between now and 2030, was published in the educational text, Should Drilling Be Allowed in the Arctic National Wildlife Refuge? (Greenhaven Press, 2013, ch. 2).

Background on the Flawed Passage
of SB 21

[August 2013 Update]

The new Senate majority installed by the 2012 election claims to have conducted "exhaustive" deliberations before passing SB 21 on the final day of the 2013 legislative session, the legislators overlooked defects in administration testimony and charts presented by ConocoPhillips, the North Slope's largest producer. In passing SB 21, the Legislature demanded nothing in return for the following gifts to the North Slope producers: (1) retaining the cost-based production tax regime while (2) destroying (instead of correcting) the progressivity component of that tax; and (3) further tilting the North Slope playing field toward the major producers by linking tax credits to production instead of exploration.

The Disappearing Chart and Other Questions the Legislature Failed to Consider when the Legislative Majority Signed Off on SB 21 In the Last Days of the 2013 Legislative Session , text accompanied by slides, presented at the Noel Wien Library, Fairbanks, July 1, 2013 (posted July 25, 2013).

"Library presentation on oil tax leads to pointed exchange on quality of legislative review," article by Dermot Cole, Fairbanks Daily News-Miner (posted July 2, 2013; printed July 7, 2013, p. B-1).

SB 21 and Petroleum Revenue Policy: Six Subjects Requiring Further Consideration, independent report, April 4-8, 2013 (posted July 17, 2013).

"Tough questions unasked: Slipshod review justifies referendum on SB 21," Fairbanks Daily News-Miner, July 9, 2013 (Community Perspective).

Approximately 423 miles of the 800-mile Trans-Alaska Pipeline is above ground to prevent the hot oil pipeline from thawing potentially unstable permafrost soils.

(August 2004 -- Updated December 2012)

Over the last eight years FinebergResearch.com has gathered and presented fact-based information and commentary about economic and environmental aspects of oil industry operations in Alaska, with special emphasis on the North Slope oil fields and the Trans-Alaska Pipeline System (TAPS). Due to the oil industry's power, political clout and media skills, much of the information you will find here is not widely reported or readily available elsewhere.

Three major petroleum companies -- BP, ConocoPhillips and ExxonMobil (originally Sohio, ARCO and Exxon) -- control more than 95 percent of North Slope production and, in 2012, are in the process of increasing a similar share of the Alyeska Pipeline Service Company (the builder and operator of TAPS) to 100%. The sprawling North Slope complex centers around Prudhoe Bay, where oil is pumped from beneath the frozen Arctic substrate and prepared for the 800-mile journey across Alaska to the ice-free port of Valdez; at the Alyeska terminal, oil is loaded on tankers bound for the West Coast. Although the North Slope was by far the nation's largest producing complex at its peak of two million barrels per day a quarter century ago, North Slope production has been in decline for two decades and is now between 500,000 and 600,000 barrels per day.

Richard Fineberg (Baku, Azerbaijan, May 2003)While declining production and its consequences for the future rightly draw major attention from a policy standpoint, the current dialogue often suffers from exaggerated fears of dependence on foreign crude supplies and failure to recognize, among other things, the recent dramatic reduction in petroleum imports due to conservation, induced in large measure by high oil prices. Moreover, even at today's reduced production levels, those high oil prices still bring producers significant revenue from North Slope crude oil.

During the 4½ decades since the discovery of the nation's largest oil field at Prudhoe Bay on Alaska's North Slope, events from Watergate to the collapse of energy companies such as Enron and, subsequently, financial institutions in the recent the financial crash demonstrate that large institutions frequently fail -- often by grotesque margins -- to live up to legal and moral obligations and to deliver on their public pronouncements. Concurrently, the major Alaska oil companies that play a predominant role in Alaska development have displayed a chronic and troubling discrepancy between promise and practice.

Despite lavishly funded advertising campaigns and public relations efforts urging that Alaska's oil companies can be trusted as the avatars of social salvation, closer examination reveals a profound gap between what these companies say and what they do. With equally disturbing regularity, when confronted with evidence of those failures, government has failed to protect the public interest.

Against this backdrop, Alaska's North Slope development and its pipeline link to market continue to provide unusual opportunities to observe the actions of decision makers, as well as greater access to the central participants than most other places afford. The information presented here points to
two significant conclusions:

  • (1) petroleum developers can and frequently do use pipelines to maximize profit and inhibit competition, to the detriment of host populations; and
  • (2) the chronic discrepancy between promise and practice on major oil projects frequently places the populace and the environment at significant and needless risk.

Reports on pipeline and petroleum development issues on this web site may be understood as case studies providing insight into the relationships among powerful corporate and government institutions. This web site explores the economic and environmental impacts of these interactions in concrete terms in the hope that well-informed individuals can and will make a positive contribution to the course of human development. A premise underlying this research is that it falls to each of us, as citizens, to keep our policy dialogue fact-based as we inform ourselves, analyze and respond appropriately to the events that shape the issues we face. Based on the factual information presented here, readers can come to independent judgments regarding the authenticity of the content, the significance of the relevant facts and the logic and appropriateness of the conclusions. In any event, the topics reported here should be capable of standing for themselves as a documented case studies in petroleum development and public policy.

The studies presented here have beenresearched and compiled by Richard A. Fineberg, founder and principal investigator of Research Associates of Ester, Alaska. Fineberg has observed Alaska petroleum development for more than three decades as a prize-winning reporter, as an advisor to the Governor of Alaska on oil and gas policy and as an independent consultant to investors, government agencies and non-profit organizations.

In recent decades, Fineberg's research horizons were expanded to include observation of oil development in two oil provinces iat opposite ends of the Former Soviet Union -- the Caspian Basin and Sakhalin Island. Collectively, these forays suggest the possibility that exploration of Alaskan oil issues may produce case studies that will inform the general understandings of the politics of oil. Whether or not this proves to be the case, conclusions from the studies conducted in the northwest corner of the North American continent will validate the significance of the Alaskan oil research presented on this web site.

The Prelude to SB 21: Earlier comments and observations on the Alaska State Legislature's 2011 and 2012 petroleum taxation and fiscal policy deliberations

[October 16, 2012 Update]

As major oil producers, the governor and citizen supporters attack legislators who oppose the proposed major cuts in the state's oil tax, analysis of ConocoPhillips (CP) SEC reports reveal that since Alaska adopted a cost-based, progressive production tax regime in 2006: (1) CP has made steady profits from Alaska, in contrast to mixed returns elsewhere, while (2) CP anticipates Alaska under the present tax regime will remain CP's top performing region.

"Alaska's tax structure now is good to oil," Anchorage Daily News, Oct. 14, 2012 (Compass) and "Oil profits weather 'Hurricane' -- ConocoPhillips expects Alaska to outperform every other oil province," Fairbanks Daily News-Miner, Oct. 14, 2012 (Community Perspective).

[May 2012 posting]

Fineberg's earlier Comments and observations on the Alaska State Legislature's 2011 and 2012 petroleum taxation and fiscal policy deliberations:

Mysterious Oil Numbers Tell A Troubling Story in Juneau: Adding "H" to ACES, You Get Aches (Alaska's Confusing, Hidden and Eluysive Share) and PAINS (Piecemeal, Artificial, Incomplete Number Systems), posted May 8 2012 (archived Dec. 26, 2012).

Letter to Senator Bert Stedman, Co-Chair, Senate Finance Committee, April 2, 2012 [rev. April 7, 2012], 21 pages (includes March 22, 2012 testimony on HB 9).

Letter to Senator Joe Paskvan, Chair, Senate Resources Committee, April 9, 2012, 5 pages.

"Solid info critical to resolving oil economics," Anchorage Daily News, April 21, 2012 (Compass).

"Aches, pains and oil taxes: The weaknesses in governor's plan were coming out," Fairbanks Daily News-Miner, May 6, 2012 (Community Perspective).

. ._
Fineberg's Previous Posts on Sarah Palin:

First-Hand Looks at Sarah Palin's Wacky World

The following (archived Aug. 25, 2010) are still available for viewing in the Archives (many in downloadable PDF format):

Under a Rogue Star chronicles Sarah Palin's late-2009 book tour and the Alaska oil spills that silently accompanied her -- a clear demonstration of the results of her general failure as governor to pay attention to what she was doing and her particular failure to protect the environment.

ACES in Palin World, from December 2009, takes a clear look at what really happened during the Special Legislative Session of October-November 2007, in which the Legislature (reversing Governor Palin's proposal) established progressivity for the state's production tax.

A November 2009 post covers the Alaska Risk Assessment project, a Palin administrative wreckage that has attracted little national attention to date.

Completing the Palin package on this web site, the following articles were previously archived:

Click here to review July 2009 posts providing more information on the Alaska Risk Assessment project and other problems Palin left behind when she resigned as governor.

In July 2008, I prepared a report for the Alaska Public Interest Research Group on major unanswered questions regarding Palin's Alaska Gas Line Inducement Act (AGIA) and the natural gas pipeline tariff regime. Following up, I put together a packet of documents ("The Palin Papers") that I gave to Governor Palin. During that brief encounter, I requested a sit-down meeting to explain my respectful disagreement with her natural gas team. The governor was either unwilling or unable to meet with this former member of her consulting team and never responded to these concerns. Two weeks later, she ascended to the national stage. Click here for the story.


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