(The above graph was taken from an Alaska Department of Revenue publication dated July 6, 2006. I (Randy G.) added the handwritten $2, $10, 1977 & "YEAR 2000")).
The average wellhead price of U.S. natural gas for August of 2006 was about $6.15 per million BTU.

It was not economically feasable to build a multi billion dollar gas pipeline until just recently. You can see by the chart above that the wellhead price of gas did not start to really go up until the year 2000. Before that the price of natural gas averaged about $2.00 per million BTU.

By the way, a one million btu chunk of gas is about the same as 1000 cubic feet of gas.  To be exact about it, 1000 cubic feet of natural gas has a heating value of 1,060,000 British Thermal Units. 1 million btu is also written as MMbtu. M is the Roman numeral for thousand, and so MM means a thousand times a thousand, which is a million.

So it is very evil in my opinion to slap this punative billion dollar per year gas reserves tax onto the oil industry just because there is no gasline in existance yet.

   Alaska Governor Frank Murkowski "invited applications to build a gas pipeline on Dec. 5, 2003, just a few months after the Legislature amended the Stranded Gas Development Act and opened the way for discussions to begin with companies of all sizes." - Voice of the Times, Page B-7 of ADN July 19, 2006.
   On January 23, 2004, the producers (oil companies) submitted their application and then the gas line negotiations got started. Those negotiations resulted in a tentative agreement for the vital fiscal agreement for a gas line. Governor Murkowski presented the contract to the people and the legislature in May of 2006. But such a large, complex and far reaching contract was too much for many citizens and the legislature to accept in one session.
   Governor Murkowski did a tremendously good thing by securing the monmental fiscal contract for the gas line. The contract provided a vital benchmark and a firm launch point for the gas line. However, the Legislature did a good job by stepping back and proceeding with caution. The Legislature's counter move of going slow is a fundamental part of good negotiation. The State should try to get the best deal with the producers, but at the same time we should progress forward and not miss the window of opportunity.
   The sponsors of the Gas Reserves Tax (Ballot Measure 2) seem like Johnny-come-latelys to me. I understand that they started gathering their signatures about during the summer of 2005. This gas tax group claims that they are trying to give an "incentive" to the producers to support the building of a gas line even though the producers were already heavily engaged in the process. It's like a little group running to the head of a parade and pretending to be leading the way.
 
Update: Thankfully, the Ballot Measure #2 Gas Reserves Tax was voted down in the November 7, 2006 election.
65.7 % of the voters voted "No".  (34.3% were yes votes.

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This website written and paid for by Randy Griffin, PO Box 73653, Fairbanks, Alaska, 99707