Legislation Hampering
Alaska Oil Exploration.,,.*.
Fought by Congressman
“It is clear the economy of Al
aska can ill afford any Federal
legislation which would curtail
wildcat exploration now underway
in the new state,” Rep. Ralph J.
Rivers (L)-Alaska) recently stat
ed in an appearance before the
Ways and Means Committee.
Rivers’ appearance was in oppo
sition to proposed reduction of
oil depletion allowance as embod
ied in a section of the proposed
income tax revision. He urged the
committee to consider carefully
how these proposals would retard
the development of new petroleum
frontiers such as those now being
opened in Alaska.
The Alaskan congressman said
he considered ‘‘it revelant and
constructive to keep the oil deple
tion allowance as it is” and fur
ther supported his position with
facts and figures. Portions of his
speech follows:
“Alaska now ranks 19th among
the States in oil production, with
an output of approximately 29,000
barrels daily, but a long and ex
pensive task lies ahead before the
49th State’s full petroleum po
tential can be measured and de
veloped.
Is Still Wildcat Area
“Because Alaska is still rank
‘wildcat country’, this develop
ment will . . . take place only if
the industry has access to very
large amounts of venture capital
which funds are generated within
the industry in great part because
of existing tax provisions. These
provisions also help to attract out
side risk capital.
“One principal effect of some
of the natural resource tax revi
sion proposals . . . would be to
reduce greatly the amount of
these venture funds and thus re
tard the pace of exploration,” he
added.
Any tax l’evision which hurts
the explorer and producer will be
doubly damaging in Alaska where
exploration and development costs
are 214 times that of the average
for all producing areas in the
United States, Rivers continued.
“I am informed that the aver
age cost of drilling a well in Al
aska is in the neighborhood of
$536,000. This average cost else
where ranges from approximately
$36,300 in North Louisiana to
$436,690 for a Texas offshore
well. These figures represent ac
tual drilling costs only and do
not reflect such costs as lease ac
quisitions and geological and geo
r
physical costs.”
The “average cost” figures do
not tell the whole story. Rivers
explained. For example, in the
early days of the present Alas
kan oil development program, one
company is reported to have spent
about $6 million drilling one hole
that produced nothing but crush
ed ice.
Alaska must compete with oth
er areas in attracting capital in
to the risky business of exploring
for new deposits, he added. If the
industry is to be burdened by in
creased taxes, with the consequent
discouragement to risk capital in
exploration and development, the
effect clearly will be most serious
in areas such as Alaska where
the exploration and development
costs are high and the chances for
success low.
After some 50 to 50 years of
off-and-on searching, oil was dis
covered in commercial quantities
in Alaska in 1957. In the inter
vening six years, one major oil
field and five gas fields have been
discovered.
In 1962, however, 29 dry holes
were drilled to an average depth
of 9,600 feet. The approximately
§17 million invested in these dry
holes came from depletion taken
on producing properties in other
parts of the United States, Rivers
added.
Oil Is Lifesaver
Revenue produced for the State
of Alaska by the petroleum indus
try has been a lifesaver to the
new State government and a wel
come stimulus to Alaska’s econ
omy — quite apart from the bene
fits accruing to the national in
terest by the development, to date,
of more than 200 million barrels
of proven oil reserves, the Ways
and Means Committee was told.
It has been estimated that near
ly $1 out of every $2 in State re
venue in Alaska today is derived
directly or indirectly from the oil
industry.
“What does this industry mean
to Alaska ? It means 1,780 new
jobs, new associated businesses
serving the petroleum industry,
and a substantial tax base. Sup
plemental industries such as heli
copter services, aircraft charters,
tugs and barges in Alaska have
benefited from the oil exploitation.
“Last summer, oil company per
sonnel flew approximately 16,000
hours in helicopters chartered
from Alaskan residents at an av
erage cost to the industry' of about
i
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262-4465 •
SOLDOTNA
Ninilchik Plans
Commencement,
Field Day Events
Three seniors, two boys and one
girl, will receive diplomas from
Ninilchik High School next Thurs
day night, May 16. They are Dan
niel Cecil, William Bailey and
Lynn Garroute.
The commencement exercises
will be held in the Methodist
Church at Ninilchik, beginning at
8 p.m., with Chaplain Frederick
Hoffmann, of Wildwood Station
as principal speaker. His address
will be entitled “Creation Con
tinues.”
A reception at the church fol
lowing the commencement pro
gram will honor the graduates.
Annual Field Day activities are
planned at the school on Friday,
May 17, the last day of school.
This is an occasion that brings
families in the area together for
an all-day event, according to
Donald Lawvere, school adminis
trator.
Students of all ages will parti
cipate in athletic events during
the morning hours, competing
against others in their own class
es for high scores.
In the afternoon, a school as
sembly will be conducted by the
members of the Senior Class.
Awards will be presented winners
in the morning’s athletic contests.
Scholarship awards will also be
presented and students graduat
ing from the eighth grade will re
ceive their diplomas.
$100 per hour. The industry has
built 170 miles of new roads in Al
aska opening up heretofore inac
cessible areas.
“Taxes, bonuses and royalties
paid by the industry have had a
stimulating effect on the State’s
economy,” Rivers told the Ways
and Means Committee. “In the
past four years alone, the petrol
eum industry has spent in excess
of $59 million for lease rentals
and bonuses. Another $5 million
was spent in overhead expenses—■
salaries and wages, etc.”
Rivers quoted the magazine
“Western Oil and Refining” as
calculating a total industry in
vestment for exploration and
drilling of $100 million. Another
source estimates the industry’s ex
penditures—exclusive of land ac
quisition costs — at $130 million
from 1957 through 1962 or $665,
000 for every mile or hole drilled,
be it “wet” or “dry”.
By some standards, Rep. Rivers
said, some of these expenditures
and some of these investments
may not appear overly impressive.
“But I assure you.” he said, “they
loom large and important to a
young state as it seeks to 'Con
vert its vast natural resources in
to a sound basis for growth 7 . ,
the economy of Alaska can ill af
ford any Federal legislation which
would curtail the wildcat explor
ation in the state.”
PAROLE BOARD FORMED
The Parole Board m Alaska was
activated by legislative action in
April 1960.
Read the News classifieds for
profit—use them for results.
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I1/2 Mi. South of Refinery on N. Kenai Rd.
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CITY OF SOLDOTNA
FINANCIAL STATEMENT
5/1/62 to 4/30/63
Income
Business License Refund.$ 1,505.20
Liquor License Refund. 6,200.00
Gas Franchise Tax ... 503.87
Airport Gas Sales Rebate . 400.60
Rental-City Hall . 1,527.50
Airport Leases and Tie-down Fees .. 180.00
Fines . 400.00
Sales Tax . 6,518.47
Building Permits ... . 127.50
Dog Licenses, Catcher and Pound Fees . 205.00
Emergency Funds (Snow Removal-Airport).... 1,499.88
Bush Funds . . .. 8,500.00
Gas Tax Refund . 314.93
Miscellaneous . 157.40
Use of Ambulance . 100.00
TOTAL . $28,230.35
Expenses
City Hall
Lights .$ 287.63
Fire Insurance . 170.20
Heat .. 213.75
Maintenance . 58.60
Amortization .
Airport
Maintenance . 3,639.56
Fire Eauioment
New Equipment and Repairs . 560.31
Streets
Maintenance . 102.75
Administrative Costs
Clerk and Bookkeeping . 1,498.13
Office Supplies . 189.38
Telephone and'Wires . 78.87
Liability Insurance . 711.57
Attorney Fees .'. 1,619.08
Police Protection . 1,998.21
City Planning .
Miscellaneous Costs
Elections, Court Costs, Printing
Travel and Ordinance Enforcement. 1,630.40
Equipment Maintenance . 2,220.91
Garbage Dump . 60.00
Dog Licenses, Catcher and Pound Fees. 297.88
Airport Construction
Bush Funds . 8,854.00
Mechanic-1962 Project . 1,709.65
Transpoi-tation of FA A Compactor—
1962 Project . 15.00
Transfer of Funds—1962 Project. 300.00
TOTAL . $26,215.88
BALANCE ON HAND .. $ 2.014.47
CITY OF SOLDOTNA 1
1962 AIRPORT PROJECT
* Income
Federal Aviation Agency ....$85,884.94
Loan-National Bank of Alaska...;.J 10,000.00
Transfer 'fwnn General Funds . 300.00
Paid by General Funds . 1,724.65
Total ... $97,909.59
Y Expenses
Fuel-City Equipment . I,414.i3
. Maintenance-City .Equipment . 426.51
Mechanic-City’Equipment. 1,709.65
. L- -
1 /-Total ■ . " 97.897.59
Balance^—Airport Funds on Hand . .$ 12.00
r.
.•« ; •" r . ... . . ,. , ., %r-’- . - ‘ i
. Balance of federal Funds Available . 10,861.16
Outstanding Invoices
F.A.A.—Compactor . 467.50
Miller—Compactor . 832.50
Soldotna Bookkeeping . 544.74
Arctic Oil Tool. 43.75
Soldotna Supply . 72.47
Sub-total .. 1,460.96
Loan Repayment .. 10,000.00
Total ... 11,460.96
Additional Amount to be Paid with General Funds $ 587.80
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The Area’s Barbers
ANNOUNCE
New Haircut Prices
Adult Haircut . . $2.75
CHILDREN’S HAIRCUTS UNCHANGED AT $2.00
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Rig Barber Shop Village Barber Shop
KENAI SOLDOTNA