Will Americans Elect Wiser, More Energy Savvy Officials In November? 

Commentary by Dave Harbour

Today’s Wall Street Journal Editorial.  President Obama is campaigning as a champion of the oil Mark Begich, U.S. Senate, National Petroleum Reserve Alaska, NPR-A, ANWR, Alaska, Photo by Dave Harbourand gas boom he’s had nothing to do with, and even as his regulators try to stifle it. The latest example is the Interior Department’s little-noticed August decision to close off from drilling nearly half of the 23.5 million acre National Petroleum Reserve in Alaska.  The area is called the National Petroleum Reserve because in 1976 Congress designated it as a strategic oil and natural gas stockpile to meet the "energy needs of the nation." Alaska favors exploration in nearly the entire reserve. The feds had been reviewing four Lisa Murkowski, National Petroleum Reserve Alaska, NPR-A, federal overreach, U.S. Senate, Photo by Dave Harbourpotential development plans, and the state of Alaska had strongly objected to the most restrictive of the four. Sure enough, that was the plan Interior chose.  Interior Secretary Ken Salazar (NGP Photo-r) says his plan "will help the industry bring energy safely to market from this remote location, while also protecting wildlife and subsistence rights of Alaska Natives." He added that the proposal will expand "safe and responsible oil and gas development, and builds on our efforts to help companies develop the infrastructure that’s needed to bring supplies online."  The problem is almost no one in the energy industry and few in Alaska agree with him. In an August 22 letter to Mr. Don Young, Congressman, U.S. Congress, National Petroleum Reserve Alaska, NPR-A, ANWR, OCS, Photo by Dave Harbour, Salazar, government overreachSalazar, the entire Alaska delegation in Congress—Senators Mark Begich (NGP Photo-l) and Lisa Murkowski (NGP Photo-l) and Representative Don Young (NGP Photo-l)—call it "the largest wholesale land withdrawal and blocking of access to an energy resource by the federal government in decades." This decision, they add, "will cause serious harm to the economy and energy security of the United States, as well as to the state of Alaska." Mr. Begich is a Democrat.

Alaska Dispatch Editorial by Craig Medred.   …what is contemptible here is the oh-so-smart Beinecke, the president of the NRDC, who has in all likelihood never been been to the Arctic, using the people of Kaktovik as pawns in her personal battle with Big Oil.
Calgary Herald by Dan Healing.  A whistleblower employee’s complaint about compliance lapses at TransCanada PipeLines Ltd. has resulted in a letter of reproach from the National Energy Board.

Commentary, by Dave Harbour:

Will Americans Elect Wiser, More Energy Savvy Officials In November? 

Last week we attended two events, hoping afterward that the upcoming election will enable Alaska and the United States to improve their respective policies affecting energy exploration and development potential within our own borders.  

Alaska’s state senate leadership has continually castigated the free market, attempting to attract populist support by crying, "It’s Our Oil" while demonizing the industry that largely powers America.  Meanwhile, the deft-of-hand result is to obstruct reform of Alaska’s predatory oil and gas tax regime.  

Meanwhile, President Obama’s Administration has a four-year track record of assuring that virtually every decision affecting Alaska’s economy and future is negative, anti-development, anti-free enterprise and anti-rule of law.  Nationwide, his agencies work night and day to slow or stop oil, gas and coal energy exploration and production.

At last week’s Alaska Miners Association/Society of Mining, Metallurgy and Exploration luncheon at Sourdough Mining Company, retired AMA president Steve Borell (NGP Photo) briefed members on the largest coal exporting facility in the world, South Africa’s Richards Bay Coal Terminal.  The complex, computer controlled plant dispatches over ninety metric tons of three dozen grades of coal per year throughout the world.  

With its own world class coal, oil and gas reserves, Alaska could provide one of the keys to American energy independence.  But that can only happen, first, were the Federal administration not fighting fossil fuels at every turn in the regulatory road.  Second, Alaska’s legislature needs to be more unanimous in its admission and support of the fact that 90% of Alaska’s operating budget and a third of Alaska’s economy is Roger Marks, Alaska Economist, IAEE, ACES, Alaska oil taxes, AGIA, Photo by Dave Harbourdependent on a diminished flow of fossil fuel production– and that diminishing production is almost totally due to state and federal political obstruction. 

(We also recall the proof economist Roger Marks provided that Alaska’s energy policies have relegated it to one of the worst places on the globe to invest in energy, despite the high resource potential.)

At the Alliance’s annual meeting lastAlaska Governor Sean Parnell, ACES, oil tax policy, OCS Governors Coalition, AGIA, Federal government overreach, Photo by Dave Harbour week, Governor Sean Parnell (NGP Photo) noted the attitude of some Alaska state senators that, "We can’t lower taxes without guarantees the savings will be spent in Alaska."  He responded with the indisputable adage that, "The less we tax something the more of it we get".  He added, "We believe in growing the economic pie for Alaskans…, by turning around the production decline and that requires that we be competitive with other production areas like North Dakota and Texas."  Parnell said, "Decline is not in the interest of Alaskans.  If it’s ‘our oil’ why are some senators doing nothing to unlock our oil?"  (Note: We obtained the quotes above by writing in a darkened room and defer to the accuracy of this link should there be question about what he actually said.   Here is a video of his speech!  -dh)

Yes, the future of Alaska and the Nation will in large part pivot on how elected officials treat fossil fuel exploration and development at the national and state levels.  Will they treat it with respect, as the source of jobs and national wealth or will they demonize it?

That may be a useful question for our readers to ask candidates for public office.  "Which side of that line are you on," we might ask.  Then we can listen carefully.  Is the answer simple, "Yes, I support robust and responsible fossil fuel exploration and Pete Peterson, ACES, Alaska State House of Representatives, refineries, oil taxes, photo by Dave Harbourdevelopment."  

Or, is the answer, as East Anchorage candidate Pete Petersen (NGP Photo) says, " I voted against the proposed $2 billion a year oil tax bailout, because I take my oath to uphold Alaska’s Constitution very seriously. The constitution requires that the state maximize the benefit from our natural resources, and passing this bill was a no strings attached giveaway that did not require any new drilling in Alaska. I introduced legislation that would offer lower oil taxes in exchange for more production and exploration, and I will continue to work for common sense solutions to put more oil in the pipeline."

Or, does one agree with East Anchorage Senator Bill Wielechowski (NGP Photo), that "Since we reformed oil and gas taxes (ACES) in Bill Wielechowski, oil taxes, ACES, Alaska State Senate, Photo by Dave Harbour2007, jobs, investment and the number of oil companies doing business in Alaska have all hit all-time highs?"  …   "Passing the tax breaks being proposed by the oil industry," he said, "would cripple our economy.  According to Governor Parnell’s Budget Director, these tax breaks would immediately result in massive deficits."

We believe that the constitutional reference Petersen cites refers to ‘maximum benefit’ of natural resource production for both this and future generations of Alaskans–not just the present generation.  To provide benefits for all times, public officials need to exercise spending restraint and develop tax and investment policies that are sustainable for many generations–not just for a current, greedy generation whose policies would suck every drop of wealth from current investors at the expense of long term investment, reputation, fairness and common sense.

We believe that  Wielechowski is correct that improving the investment climate by moderating taxes will require more spending restraint.  We do not agree that tax reform would provide oil investors with a "tax break".  We urge him to note that in 2007, the Legislature greedily increased taxes out of all proportion to the essential needs of the state.  Now, those who oppose moderation of the exorbitant tax burden, claim that they should not ‘give’ the oil companies tax reform.  Rather, we should recall that elected officials ‘took’ money from the private sector in the first place, when government did not need the money, applied the tax retroactively, and no one asked the state, "If you TAKE this money from those who have invested billions in our state, what guarantees will you give that this will improve Alaska’s economy for our children?  Even so, how do you justify applying an excessive tax to investors retroactively?"

We have previously editorialized on how some public officials are sophists, misusing Alaska’s constitution to merely extract more money for today’s voters and ignoring the best interests of future job seekers, future high school and college graduates, future families, future state budgets.

This leads us to finally ask of public officials:

Shouldn’t we be more prudent about our spending and taxing habits?  

Shouldn’t we be more mindful of the best interests of our children, who ask for so little, than of the self-interests of this generation, which asks for so much?






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By | 2016-12-22T22:31:42+00:00 October 15th, 2012|Alaska Taxes, Commentary, Federal Obstruction|0 Comments