title: The Last Alaskan Barrel: An Arctic Oil Bonanza that Never Was
author:  John M. Miller 
description: <b> New book examines profitability of Arctic Alaskan oil</b> <div><div><i>The Last Alaskan Barrel: An Arctic Oil Bonanza that Never Was by John M. Miller enlightens the fifty-year investment life of Alaska North Slope oil, and what oil prices, development costs, government take, environmental regulations, and development risks did to the earnings. The book presents a groundbreaking case study, based on publicly available information, which analyzes the profitability of the North Slope, and how it was shared among the state of Alaska, the federal government, and oil companies. The book finds, contrary to popular belief, that if oil companies had been able to foresee the future accurately, they never would have developed the North Slope over the past fifty years. The book concludes with a glimpse of future oil and gas potential in Arctic Alaska.<br /><br /><i>The Last Alaskan Barrel </i><em>is written to be comfortably understood by the public, with technical jargon and economic calculations (included for those interested) kept to a minimum. Those entries can easily be skipped with no bearing on the story. All details have been completely documented by sources in the public domain. Intending the book to be read by all Alaskans and the public in general, the author revisits decades of news headlines and corrects commonly believed myths and misconceptions.<br /><br />For more than a decade, John M. Miller managed megaprojects valued at billions of dollars for Alaska&apos;s North Slope. In the late 1990s, he chaired the Trans-Alaska Pipeline System (TAPS) Owners Committee. He started his research to answer his own questions. He hopes a well-informed public, especially those with children, will make the adjustments in attitudes and expectations to face the radical changes coming in Alaska&apos;s economic, not too distant, future.<br />-- <i>Alaskanomics; The Last Alaskan Barrel</i> December 29,1010</em></i></div></div><br /><br /><div><b>Executive&apos;s book examines Alaska oil costs and benefits</b><br /><i>FAIRBANKS -- On the first page of &quot;The Last Alaskan Barrel,&quot; John M. Miller rather boldly declares that, &quot;If oil companies had known at financing what they know today about prices, costs and taxes, they would never have developed Alaskan oil over the last 50 years.&quot; From this eye-catching beginning, Miller, a former executive with Atlantic Richfield and past chairman of the Trans-Alaska Pipeline Owners&apos; Committee, devotes the rest of his book to a forceful and extensively documented argument as to why he feels this to be the case.</i></div><div><i>Miller has been involved with Alaska oil for a good chunk of his professional career, and his assessment of what has transpired over the past four decades is sobering. Much of this book is a recounting of Alaska&apos;s experience as an oil giant, and it&apos;s a story of overconfidence, overestimations and overindulgence.</i></div><div><i><br />After a brief history of the oil industry, Miller gets down to the discovery of oil in Alaska&apos;s arctic, and how that played into both state and federal politics. One of Miller&apos;s primary points, made repeatedly, is that North Slope oil is far more costly to extract and transport than oil from just about any other region where it is presently produced. </i></div><div></div><div><i><br />In fact, by Miller&apos;s calculations, the resultant return after all costs for North Slope oil runs about 7 percent. Some may consider that adequate, but by way of comparison, Miller provides readers with a chart showing how oil companies could have made a roughly equal return over the past 40 years had they taken all the money they have invested in Alaska development and bought federally-backed treasury bills instead. And they would have done so without incurring all the headaches they&apos;ve acquired in the process of pumping oil out of Prudhoe Bay.</i></div><div></div><div><i><br />Miller has given us an important and exceptionally clear and well-written book, one that should be read by the industry&apos;s critics and boosters alike, as well as anyone with an interest in Alaska&apos;s economic future. He&apos;s presented an argument that desperately needs to be addressed.</i></div><div><i>An industry that was invited in and asked to bear all the risks of developing a key resource has walked away with the smallest share of the benefits. Meanwhile, state and federal governments do nothing but collect returns. This is not a good way to make friends. After reading this book, Alaskans might quit wondering why a natural gas pipeline still hasn&apos;t been built, and instead start asking why we think we even deserve one.<br />Fairbanks Daily Newsminer; January 16, 2011</i></div><div><b>Freelance writer David A. James lives in Fairbanks.</b></div><br /><br /><div><b>Up creek, no paddle</b><span></span></div><div><i>Are you feeling too cheerful this morning, Bunky? Is that what&apos;s troubling you?</i></div><i>If so I suggest you get a copy of &quot;The Last Alaskan Barrel - An Arctic Oil Bonanza That Never Was.&quot; It may just convince you that Alaska is up Nasty Creek without a paddle.</i><br /><i>The Last Alaskan Barrel is by John M. Miller, a former ARCO executive and former chairman of the Trans-Alaska Pipeline Owners Committee (and an adopted Alaskan). The book actually came out a few years ago, but this would be a good time to read it.</i><br /><i></i><br /><i>Among Miller&apos;s surprising conclusions is that the North Slope producers never made anything like the big bucks even they hoped for and that many of their critics used as justification for tax levels that he says bordered on nationalization.</i><br /><i>When the profits that industry hoped for failed to materialize, Miller ran the numbers and figured out that the companies would have made a better profit for their shareholders if they had invested the same amount of money in federal Treasury bills. (He supports the claim with tables.)</i><i>&quot;If oil companies had known at financing what they know today about prices, costs, and taxes,&quot; he wrote on his first page, &quot;they would never have developed Alaskan oil over the last fifty years.&quot;</i><br /><i></i><br /><i>Miller says the popular mantra &quot;Drill, baby, drill&quot; may sound supportive of oil development, but it actually doesn&apos;t make any sense. Only one in 15 exploratory wells finds commercially recoverable amounts of oil and the other 14 are often very expensive wastes of money, especially in remote areas of Alaska.</i><br /><br /><i></i><br /><i>Miller has very solid credentials to write the book. </i><br /><br /><i></i><br /><i>Those who won headlines and public office by screaming about Alaska getting its &quot;fair share&quot; did this state a great disservice. Instead we should have been negotiating deals that were fair to both sides, the producer companies as well as the state, and found a way to stick to them (if that is possible). That, in the long run, would have been in our own best interests as well as theirs.</i><br /><i></i><br /><i>Miller is very pessimistic about Alaska&apos;s oil future. He thinks we will never tap ANWR, that the National Petroleum Reserve doesn&apos;t have much petroleum in it, that there are no other bonanza fields left to be found in Arctic Alaska and that offshore Arctic oil is a long shot, especially for Alaska, which would get a small share of revenues from it, if any. (Note: Sen. Lisa Murkowski launched a new effort this week to win a share for Alaska of federal revenues from drilling in federal waters off our state.)</i><br /><i></i><br /><i>Miller doesn&apos;t seem all that impressed about prospects for a gas pipeline, though that does seem to remain a possibility. It&apos;s the economics of such a project and the likely marketplace competition that seem most problematic, though Alaska&apos;s reputation for unstable taxation -- and changing ideas about its &apos;fair share&apos; -- is a big problem too.</i><br /><i>And though Alaska is unlikely to have another bonanza discovery like Prudhoe Bay, there seems to be some hope that smaller fields can augment the small amounts still being produced from the large fields like Prudhoe and Kuparuk. That wouldn&apos;t be anything like Alaska&apos;s golden years, but it would be better than the alternative.</i><br /><i></i><br /><i>It may be time to dust off those old bumper stickers that read: &quot;Please God, just one more oil boom. I promise not to whiz this one away.&quot; </i><i>But this time we may have to cross out the word &apos;oil&apos; and just hope for any boom we can get.</i><br /><i>Anchorage Daily Planet, Tom Brennan, </i><i>July 26,2015</i>
zlib_text: > Page 312: The amount of barrels is obviously an error of the typograph, but
  > the proper amount not being know, it has been left in place. "It is probable
  > that they are now capable of manufacturing 1,25,000 barrels of flour
  > annually, and this quantity would require 5,625,000 bushels of wheat."
  
  > The inconsistencies of the typographer or author for punctuation (or lack
  > of) in amount have not been corrected.]
  
  #  OLD MACKINAW;  
  OR,  
  THE FORTRESS OF THE LAKES  
  AND  
  ITS SURROUNDINGS.  
  BY  
  W. P. STRICKLAND.
  
  Philadelphia: James Challen & Son ,  
  New York : CARLTON & PORTER. — Cincinnati : POE & HITCHCOCK.  
  Chicago : W. H. DOUGHTY. — Detroit : PUTNAM, SMITH & CO.  
  Nashville : J. B. McFERRIN.  
  1860.
  
  Entered according to Act of Congress, in the year, 1860, by  
  JAMES CHALLEN & SON,  
  In the Clerk's Office of the District Court of the United States, in and for
  the Eastern District of Pennsylvania.
  
  PHILADELPHIA:  
  STEREOTYPED BY S. A. GEORGE,  
  607 SANSOM STREET.
  
  ##  PREFACE