Dear G all overnor Brown,
California is the still major crude-producing differentiate in the country that does not apply a royal house on anele and spatter produced in the state. Texas and Alaska both assess a royalty of 25% on all oil and gas produced in their states, and have for nearly time. That huge source of revenue enhancement provides for a heavily subsidised and high quality university system in the State of Texas and provides galore(postnominal) social services, including a $1,000 annual stipend for e truly citizen in the State of Alaska. California produced 207,460,084 barrels of oil and 245,206,976 Mcf of natural gas in 2009, according to the most recent Annual notify published by the California Division of Oil, Gas and geothermal Resources (2009). Due largely to the high price of crude over the past couple of years, where it has hovered around $ blow/Bbl of oil, the state could have generated over 5 Billion dollars in 2009 revenue if it assessed that same 25% royalty 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 gone well above $100/barrel and there is no reason to believe that they depart drop below that level whatever time soon, considering the add up/demand situation and the political unrest in the centre of attention East. Currently, natural gas is selling for around $3.00/Mcf and is not very profitable, and the state may choose not to assess 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 monetary royalty payments to the state and the latter is actual oil inventory given to the state that they can then sell. Royalty-in-kind may be easier to pass the Legislature since it may not be legally considered a tax. The...If you want to get a full essay, order it on our website: Ordercustompaper.com
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