Time for User Pays?

A Coast Guard MH-60 Jayhawk helicopter crew hoists 18 crewmen from Shell’s drilling rig Kulluk 80 miles southwest of Kodiak City, Alaska, Dec. 29, 2012. U.S. Coast Guard Photo

A Coast Guard MH-60 Jayhawk helicopter crew hoists 18 crewmen from Shell’s drilling rig Kulluk 80 miles southwest of Kodiak City, Alaska, Dec. 29, 2012. U.S. Coast Guard Photo

gCaptain reports that Shell Oil’s attempts to drill in the Arctic are adversely effecting its operations elsewhere. The articles goes on to discuss the Coast Guard’s efforts in support of the operation.

“That for me is the opportunity cost,” Admiral Paul Zukunft, commandant of the Coast Guard, told Reuters in his office at the agency’s Washington, D.C. headquarters late last week. “It means you do less somewhere else in order to supplement activity in the Arctic.”

Perhaps this is a place where we should be applying “User Pays.”

5 thoughts on “Time for User Pays?

  1. There is historical precedent. Why not use it? The revenue cutters did not begin with giving things away — the Treasury Department was not in the business of losing money. So, why is the Coast Guard of today?

    • I think its a double edge sword right there.
      1) They pay for it in the taxes that they, and the people of Alaska pay on the revenue from oil.
      2) You would have to separate the accidents due to negligence from ones caused by mother nature, and Sh*t happens scenarios.
      3) You could require maritime insurance for commercial ships, and operations, and civilian pleasure craft in the maritime waters of the united states. It would only apply for Negligence.
      4) raise the gas tax .005-.01 cents a gallon to pay for coast guard operations in Alaska.
      I’m done rambling for the night.
      What do you folk think?

      • Pardon me if this already exists…

        A direct tax on the oil taken from the arctic going directly into dedicated trusts would be more efficient. The companies pulling oil from the arctic would see the cost and it is less likely to be diverted to unrelated government programs. It is not perfect approach. Government services always lag behind decreases in tax revenue to pay for them, and the inevitable adjustments are painful.

        Using the trusts to offset arctic operations costs and environmental response/rehabilitation costs may be cleanest way to use the trust funds. But clearly the Admiral is saying that he needs funding for long term infrastructure and fleet expansion/improvements.

        The FAA uses this approach with the Airport Improvement Program and that program is a good, and sometimes not-so-good, example of a infrastructure program.

      • I doubt that Shell pays much if any U.S. taxes – the large companies are getting very good at not paying taxes and leaving the costs to the plain folks.

        In the post below an oil tax in the Arctic is mentioned, that might work

        then there is the difference between a commercial company / ship and a recreation boater that might go out only a few times a year, what about small boats like a kayak?

        Charging would make many people wait until it is really too late for help or the weather has deteriorated to be a serious risk of the rescue groups, the Coast Guard already has problems at times with people not calling for aid when they really need aid because they don’t want the expense of a commercial tow or they just don’t want to leave their boat, or they keep trying to fix something that is beyond repair.

        No quick and easy fix for this

        Shell got in trouble with the Kulluk because they did not want to pay Alaska Taxes and so attempted to move the Kulluk in bad weather with vessels that had operation issues.

  2. “”””It means you do less somewhere else in order to supplement activity in the Artic.””””

    “”””80 miles southwest of Kodiak City, Alaska,””””

    It could very easily be argued differently. 80 miles southwest of Kodiak City is well within the US Exclusive Economic Zone, which is a primary Coast Guard responsibility. Why then is the US Coast Guard sending ships and personnel to the Persian Gulf, Black Sea, Mediterranean Sea, Singapore, etc which are taking resources away from EEZ enforcement and security.

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