Competitive Framework for Alaska: 2012

per $ $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 Incentive Index preice ($ retained increase) Price Deficiencies Excessive price progressivity Chart 3.2.4.3-2 Price Incentive Index for Alaska - ACES Base Case (500 mln, $ 25 costs) $50 $70 $90 $110 $130 $150 Oil Prices $170 $190 $210 $230 $250 ACES WEAK For ACES, at high prices, the combined tax rate becomes so high that there is the price incentive performance becomes very weak by international standards. This leads to lack of interest in achieving the highest prices on an arms length basis and strong incentives to try to "transfer price”. 62

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