Alaska Governor Palin wants to tax Big Oil. Does this mean other investments need to be examined?
Alaska governor Palin is creating controversy with a tax that Big Oil says amounts to $700 million on them. KTUU in Alaska reports on Palin's tax proposal:
"What we all need to be worried about just now is the future for Alaska," said BP (BP) Exploration (Alaska) Inc. President Doug Suttles in an interview with Channel 2 News.
Suttles says higher oil taxes could make Alaska less attractive than other North American oil fields.
If this tax does go through, does it mean the end of grand plans for opening Alaska to further drilling? And where will those investment dollars go? Canadian oil sands? Could the move force Big Oil into putting more into alternative energy development? And what will happen to Big Oil stock if the tax does go through? Likely such a move would eat into Big Oil's coffers, diminishing returns and weighing on the stock. Although oil companies are known for increasing prices when it suits.
With everyone from U.S. law makers, to state law makers, to even some consumers interested in how to get more from Big Oil, we may soon find how reliance on one limited resource can affect stock prices.
Photo:Bethany King, Creative Commons, Flickr
Disclosure: I am in investing in BP, although reconsidering. BP is one of the Big Oil companies diversifying its portfolio to include alternative energy investments.