Business Ethics

12/9/2011 Dear G all overnor Brown, calcium is the still major crude-producing differentiate in the country that does not apply a royal house on anele and spatter produced in the carry. Texas and Alaska both assess a royal line of 25% on all vegetable oil and gas produced in their states, and have for nearly time. That huge source of revenue sweetener provides for a heavily subsidised and gamy quality university ashes in the State of Texas and provides galore(postnominal) social services, including a $1,000 annual allowance for e truly citizen in the State of Alaska. atomic number 20 produced 207,460,084 set of oil and 245,206,976 Mcf of lifelike gas in 2009, according to the most recent Annual notify published by the California Division of Oil, Gas and ge other(a)mal Resources (2009). Due largely to the high price of crude over the past couple of years, where it has hovered some $ blow/Bbl of oil, the state could have generated over 5 Billion dollars in 2009 revenue if it assessed that same 25% royal house as these other states. Since the number cost to lift a barrel of oil in California is approximately $10.00/barrel, than the other $90.00/barrel is pure profit, and the assessed royalty of $25.00/barrel still leaves them with a handsome profit of $65.00/barrel.

These oil prices have recently foregone well above $100/barrel and there is no reason to believe that they depart drop below that direct whatever time soon, considering the add up/demand website and the political unrest in the centre of attention East. Currently, natural gas is selling for around $3.00/Mcf and is not very profit able, and the state may choose not to asses! s any royalties on natural gas until it becomes profitable again. The royalty on oil production could be assessed either as royalty-in-value or as royalty-in-kind, as they do in Alaska. The former is material financial royalty payments to the state and the latter is actual oil stock given to the state that they can then sell. Royalty-in-kind may be easier to pass the Legislature since it may not be law mounty considered a tax. The...If you want to get a full essay, order it on our website: BestEssayCheap.com

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