Not un-American to Produce Oil.  Taxes and Economic Woes in AK? 

In Home, News by wp_sysadmin

Today’s Key Takeaways: Buffet bets on fossil fuels.  Economic pain in AK with new taxes?  First-ever Pentagon RFP for gallium.  


BUFFETT BETTING ON FOSSIL FUELS: Famed investor Warren Buffett has been upping his investments in fossil fuels this year, Bloomberg notes, including by increasing Berkshire Hathaway’s stake in the Cove Point LNG Terminal in Maryland and buying more of Occidental Petroleum Corp.

Buffett successfully invested in oil and gas producers during the depths of the pandemic and said earlier this year that “We do not think it’s un-American to be producing oil.”
From the Washington Examiner, Daily on Energy


New taxes on oil, gas could cause economic pain in Alaska, across America
Dennis Hull, Santa Ynez, July 26, 2023

As the Biden administration escalates its crusade against American energy, perhaps no state has more to lose than Alaska, where the oil industry and its tax dollars are responsible for up to a third of the state’s economic output and a quarter of its jobs.

But some lawmakers in Juneau are considering taking a page out of Biden’s playbook with a suite of harmful new taxes. Unless Republican Gov. Mike Dunleavy and common-sense Republican and Democratic legislators intervene, these tax hikes will drive away production and investment with consequences that will reverberate nationwide.

With Alaska facing a budget deficit of $700 million earlier this year, tax increases have dominated the policy conversation in Juneau. Ideas have included a 40 percent tax hike on oil and gas production companies by nearly halving the per-barrel tax credit. Other targeted taxes would penalize smaller and medium-size energy companies in the state.

But Alaska’s budget already depends overwhelmingly on oil and gas industry revenue. Eighty percent of the state budget has long relied on oil taxes. Since the state already leans so heavily on the energy industry, any unexpected price volatility can quickly cause a headache. If the price of a barrel of crude oil falls by just $1, the state loses $70 million in tax revenue, and vice versa.



Pentagon seeks supply of chip mineral gallium after China curbs exports
Bloomberg News/Mining.Com, July 26, 2023

The Pentagon plans to issue a first-time contract to US or Canadian companies by year-end to recover gallium, a mineral used in semiconductors and military radar systems, after China curbed exports this month.

China announced the restrictions on gallium and another mineral, germanium, in a move seen as part of the country’s tit-for-tat trade war on technology with the US and Europe. The two metals are crucial to the semiconductor, telecommunications and renewable energy industries. The curbs prompted US Treasury Secretary Janet Yellen to voice her concern during a recent visit to Beijing.

The Pentagon, which has reserves of germanium but not gallium, plans to use its authority under the Defense Production Act for “prioritizing awards” by Dec. 31, “focusing on recovery of gallium from existing waste streams of other products,” spokesman Jeff Jurgensen said in a statement. DPA funds bankroll investments in key sectors of domestic US industry for targeted national security purposes, such as the stockpiles of personal protective equipment that were used during the coronavirus pandemic.

“Recovery, not mining, is the fastest way to make the materials more available in the US,” the Pentagon said. DPA funds previously “have not been awarded for minerals recycling projects.”

Gallium and germanium are typically extracted during mining operations for other materials. But it’s expensive to process and refine them so they have often been treated as waste by western companies, while China came to dominate the supply.

Defense Department officials declined to say how much money would be placed on contract or how many companies might be tapped.