Governor's Alaska Tax Proposal Scares Independent Oil Investment

Governor’s Alaska Tax Proposal Scares Independent Oil Investment

Alaska leaders try to agree on budget plan; oil prices hurt
The collapse in oil prices has left oil-reliant Alaska with a multibillion-dollar budget deficit and few palatable options for digging its way out.

Alaska Governor Bill Walker (NGP File Photo)

Photo Courtesy: Caelus

Alaska Public Media. North Slope oil producer Caelus Energy announced Friday it will lay off 25 percent of its 80-person work force and suspend drilling at the Oooguruk oil field, potentially affecting hundreds more contractor jobs.

In a sharply-worded letter to Governor Bill Walker , Caelus CEO James Musselman blamed not only low oil prices — but also the governor’s efforts to reform Alaska’s oil tax system.

Musselman said the Walker administration’s proposals to scale back subsidies for smaller companies like Caelus — and to raise the minimum oil tax — have “significantly damaged investor confidence in Alaska.” More….

Saturday recap: House votes to put lawmakers on gasline board
The House has approved a Senate bill that will appoint three members of the Alaska Legislature to nonvoting seats on the Alaska Gasline Development Corporation board of directors. (SEE OUR COMMENTARY, BELOW) -dh

Warning to Alaska Legislators!

Late last year we tried to warn legislators about the unintended conflicts of interest accompanying socialized, equity ownership in private industry initiatives–particularly a big, gas pipeline/LNG project.

We urge legislators who have not, to review our 11-5-15 commentary (i.e. scroll down) on the unintended consequences of state ownership, including the personal involvement of public officials….

This 2003 Conservation Report Details Failures of Alaska State Ownership of Private Sector Activity

Once again, Alaska seeks to learn the hard way — via equity participation in an energy transportation project — that government ownership of free enterprise activities renders them not free, not flexible, not properly managed, not correctly incentivised and subject to all sorts of political mayhem.

Note that we do not oppose a state or federal government supporting public interest projects if sustainable funding is available, projects such as bridges, highways, airports, ports, etc.

We would add an observation that the public interest would be best served, were all government supported projects — including so-called “mega projects” — undertaken by a competitive proposal process and not statutorily required to pay non competitive “prevailing wages” or bound by law to special interest “project labor agreements”. -dh

About the Author: wpnorthern

Dave Harbour, publisher of Northern Gas Pipelines, is a former Chairman of the Regulatory Commission of Alaska, a Commissioner Emeritus of NARUC, NARUC's Official Representative to IOGCC and Vice Chairman of NARUC's Gas Committee. He served as Gas Committee Chairman of the Western Conference of Public Service Commissioners. He also served as commissioner of the Anchorage Bicentennial Commission and the Anchorage Heritage Land Bank Commission. He earned a Bachelor of Arts Degree: English, at Colorado State University, a Master of Science Degree: Communications-Journalism at Murray State University and graduated from Utility Regulatory School for Commissioners at Michigan State University. He served as a Vice President for Communications and Public Affairs at Alaska Pacific University, taught bank marketing classes at the University of Alaska and was an English teacher at Los Alamos High School. Harbour served in ranks of Private - Captain during a 4-year assignment with the Army in Korea, Idaho, Georgia and Fort Meade and received the Meritorious Service Medal among other commendations. Harbour is also a past Chairman of the Alaska Council on Economic Education, the Alaska Oil & Gas Association Government Affairs Committee, the Anchorage Chamber of Commerce, the Export Council of Alaska and the Department of Commerce's District Export Council. He is a past President of the Alaska Press Club, American Bald Eagle Foundation, Consumer Energy Alliance-Alaska and Common Sense for Alaska. Harbour was instrumental in founding the American Bald Eagle Research Institute (UAS), the Alaska Support Industry Alliance, the Downtown Anchorage Business Partnership, and Arctic Power. He also served as CEO of several small Alaska organizations, including the Anchorage Parking Authority and Action Security, Inc. Harbour is also Chairman Emeritus of the Alaska Oil & Gas Congress. Harbour's wife, Nancy, is a professional, performing arts administrator and his three boys, Todd, Benjamin and William work in the fields of environmental management, energy marketing and medicine.