3-2-12 – Alaska’s Socio-economic Civil War

Canadian Newswire.  Canada’s manufacturing sector Jim Prentice, Canada, Energy, Minister, Cabinet, Photo by Dave Harbourcan build on its strengths and refocus its efforts on high value opportunities arising from development in the energy sector, says Hon.Jim Prentice (NGP Photo), Vice Chairman of CIBC.

Rick Santorum, Alaska Tele Town Hall, Consumer Energy AllianceEarlier this week Alaskan leaders questioned presidential candidateNewt Gingrich, Alaska Tele Town Hall, Consumer Energy Alliance News Gingrich on energy and natural resources issues–and NGP readers were able to call in and listen, courtesy of Consumer Energy Alliance.  President Obama and all Republican candidates have been invited as well.  Tomorrow (SATURDAY), candidate Rick Santorum will participate in CEA’s second Alaska Tele-Town Hall and again, NGP readers are welcome to call in and listen.  Here’s how:

Saturday, March 3, 10:30 a.m. Alaska time, Call in number: 877-229-8493, Access Code: 19645.

Into the Weekend Amid the Fog of War


Dave Harbour

No doubt, Alaska is engaged in an economic and social civil war.  Wars have casualties.  Through the fog of war and political bickering, it looks as though the major casualties are Alaska oil production activities and support industry employment, followed by over a third of Alaska’s economy, a sustainable state budget and a sustainable Permanent Fund.  Social programs like schools, aviation, welfare, and municipal revenue sharing are at risk as state and federal policy makers refuse to improve tax, regulatory and overall investment attractiveness.  Another unintended consequence of poor energy policy leadership is that non profit contribution sources will dry up — except for environmental non-profits whose support comes from outside Alaska.  

In short, strong forces are preventing improvement of the investment climate that could lead to more production on state lands and strong forces are succeeding in stopping or delaying production on federal lands.

Antagonists are those who believe in  maximum taxing and government spending Vs. others who focus on smaller government and more entrepreneurial freedom.  

Yesterday, we editorialized on this tension as it applies to taxing oil companies differently than other citizens and companies ("It’s Our Oil And We are Sovereign, By Golly!".   High tax advocates and anti development enviro-activists are bedfellows who continue to justify their assault on free enterprise and economic prosperity by demonizing the oil industry as a defense for over taxation and over regulation.  The majority of citizens have not awakened to the fact that the rhetoric is self serving and actually assaults the best interest of Alaska’s families.  They haven’t yet realized that anti-oil strategies endanger a third of the state’s economy along with the major direct and indirect source of state revenue and private employment.

Alaska Political Insider Co-host Dorene Lorenz (NGP Photo, with co-host Mark Colaveccio) was kind enough to record our exchange earlier in the week and send it to me.  To improve the record, never be accused of "revising history" and let readers interpret the exchange for themselves, we are pleased to provide the video here.  Since hindsight is so humbling, we could have given a more responsive answer to the question from our friend, ‘Keith’ from Fairbanks.  He asked about what the proper level of oil taxation should be.  While our answer might have been of some use, it should have emphasized the importance of creating a tax structure that provides incentives for filling the trans-Alaska pipeline.  -dh  (Mentioning my hosts here does not imply that they approved of all of my comments or agreed with all of my positions on issues.  They were simply fair and even handed in their interview.)

We continue to believe that if lawmakers view issues through the eyes of the kids, not the current needy-greedy constituency, they might find the challenge of filling the pipeline less complex.  We also believe that lawmakers would find decision making easier if they viewed complex issues through the lens of, "A deal’s a deal."  That means not radically changing the tax structure on an investor-lessee after a lease is agreed upon.  Make any oil tax increases prospectively apply to future investors so they can fairly calculate their costs before investing.  Avoid the appearance and reality of ‘bait and switch’ oil leasing and taxation.  Then, there are other principles we noted yesterday, that we hope lawmakers begin to adopt before our economy is too far gone to resurrect.

We hope Alaskans can come together in principle.  We hope citizens can choose peace over conflict.  We hope antagonists can refrain from political bickering and rise above the fog of war as our socio-economic civil war evolves into a sustainable era of prosperity and socio-economic cooperation.  

That’s what we’ll be hoping for this weekend.  

ADN/AP by Becky Bohrer.  In a letter to the Senate Resources Committee, the Alaska production manager for Exxon Mobil Production Co. said the committee’s current bill doesn’t go far enough in improving an unfair tax structure, and that his company is concerned by "the apparent lack of urgency in the committee in making meaningful tax reform to attract new investments."  "Simply put, Alaska’s total government take is too high to fully develop its vast resources," Dale Pittman (NGP Photo) said. "Without meaningful tax reform, Alaska should expect to continue at or likely below the Department of Revenue production forecasts.


Alaska Dispatch by Amanda Coyne.DNR Commissioner Dan Sullivan, Japanese Interest, Alaska Gas Pipeline  A group of Japanese officials have been in Anchorage to discuss sending liquefied natural gas from Alaska’s North Slope to Japan. … Alaska Department of Natural Resources Commissioner Dan Sullivan (NGP Photo) met with at least two members of the group on Monday and Wednesday. He said the meetings were more of an "introduction" than groundbreaking, DNR spokesperson Elizabeth Bluemink said.  Sullivan characterized the meetings as a "constructive discussion of Japan’s potential LNG needs," and he made a pitch for Alaska’s gas, Bluemink said. Sullivan regularly meets with countries and potential private investors interested in Alaska’s natural gas, Bluemink said.

ADN Editorial.  We do think Shell should have the chance to explore in 2012. Let the company prove up on its claims and put its preparation to the test — and by that we mean not so much its spill response plan, but its ability to prevent any spill from happening.

Commentary and Congratulations.  We respect the Alliance, Chambers of Commerce, Consumer Energy Alliance, RDC and other citizens for showing strong in hearings held Tuesday and Wednesday evenings on SB192 (i.e. oil production tax bill) before the Senate Resources

We also thank RDC for noting those good citizens who testified in support of meaningful tax
reform, and add our thanks for a job well done:

Suzanne Armstrong, Cory Baggen, Mark Baggett, Andrew Bond, Deborah Brollini, Jason Brune, Roger Burggraf, Kati Capozzi, John Christensen, Reed Christensen, Bryan Clemenz, John Cook, Dick Coose, Emily Cross, Dave Cruz, John Dickens, Allan Dolynny, Jim Duffield, Kevin Durling, Hugh Fate, Maynard Gates, Sami Glascott, Paul Glavinovich, Krista Gonder, Jerry Haugeberg, Lisa Herbert, Allen Hippler, Brian Hove, Barbara Huff, Mark Hylen, Doug Isaacson, Michael Jesperson, Lynn Johnson, Grant Johnston, Rada Khadjinova, Peter Macksey, Laura Maketa, Tom Maloney, Joe Mathis, Kim McDaniel, Harry McDonald, Ben Mohr, Kara Moriarty, Chris Osowski, Buzz Otis, Ira Perman, Rachael Petro, Norm Phillips, Jim Plaquet, Janet Platt, Charlie Powers, Skip Reierson, Ralph Renzi, Lance Roberts, Steve Robustellini, Andy Rogers, Renee
Schofield, Brent Senette, Keith Silver, Doug Smith, Peggy Spittler, Dave Stieren, Bob Stinson, Pete Stokes, Maynard Tapp, Aves Thompson, Scott Thorson, Richard Wein, Chuck Wiegers, and RDC Staff.



Leave A Comment

About the Author:

By | 2016-12-22T22:32:46+00:00 March 2nd, 2012|Alaska Taxes, Commentary|0 Comments