We like it when the respected people and organizations among us, “tell it like it is”. Below (Left), is what the Alliance’s Ak Headlamp said yesterday about Alaska’s fiscal crisis and how leaders are dealing with it. -dh
Lynn Helms, Director, N.D. Department of Mineral Resources. NGP File Photo.
Billings Gazette. North Dakota oil production had a smaller decline than expected in February as more companies put fracking crews to work to maintain cash flow, the state’s top oil regulator said. … Director Lynn Helms (NGP Photo) said this week in Williston that he anticipated a larger decline because oil companies had told him it would be slow, following two back-to-back monthly drops in production of about 30,000 barrels per day.
When we launched Headlamp, we promised to tell you what the mainstream media wouldn’t. We further promised to be honest about who was helping the economy and who was hurting it. So today we bring you a recap of this weekend in “Thumbs Up, Thumbs Down.”
The last 15 minutes or so of the Senate Finance committee discussion on SB 130 in yesterday’s meeting provided a window into the souls of several key committee members. See the excerpts below with Headlamp’s responses and ratings:
Thumbs Down – Senator MacKinnon:
- “They are laying down rigs, they are reducing their workforce and we are reducing our workforce at the state level and reducing our budget just like they are.”
- The industry is reducing their workforce by 20-30%;
- The state, with 21,500+ full time employees may end up laying off 50…and adding back 52 to administer the income tax that is being proposed.
- “I don’t want to touch the oil tax regime…”
“I reject that we are trying to touch oil tax policy because that’s not the discussion…we are not trying to take it out on their hide. We are trying to balance the current system that we have.”
- HB 247/SB 130 represent the 6th change to the oil tax structure in 11 years and are projected to take hundreds of millions out of industry’s hide when they are already cash-flow negative.
Thumbs Down – Senator Micciche:
- “…even though you’ve settled on a system that doesn’t mean you shouldn’t periodically evaluate and adjust blatant and significant flaws in that policy and I think that’s where we are today. I think it’s a healthy evaluation. I don’t think it means we’re fickle any longer.”
- See Senator Kelly’s comments.Thumbs Up – Senator Kelly:
- The State hasn’t responded. “They’ve [industry] laid off thousands and we’ve laid off 37 at last count. We might be up to 50…if you were going to take a measurement on whose responding you’d say the oil companies are and we are not.”
- “…you can say we’re not being fickle, we can say it 100 times in here, but changing our tax regime six times in 11 years is fickle. By definition.”
- “If I’m chairman of the board somewhere…and I see what Alaska is doing and what we are doing I’m going to say ‘boy, those guys are fickle’ and I’m going to look for somewhere else to invest. It’s just the reality of it.”
- “We get royalty, we get production tax, we get property tax, we get income tax, we get severance tax, we get jobs.”
- “The only jobs we’ve been trying to protect have been state jobs.”
- “Nothing we’re doing here is going to increase production.”
- “We’ve been under SB 21 for about 15 minutes and we’re changing it again. And we shouldn’t be doing that.”
It’s black and white. HB 247/SB 130 are tax increases, and won’t increase production. Legislators have failed to significantly reduce the operating costs of government, and are copping out by once again turning to the industry to pay for their mistakes. The industry they all claim to support.
AK Headlampk, A project of the Alaska Support Industry Alliance
3301 C Street
Anchorage, AK 99503
The above was yesterday afternoon’s Ak Headlamp. Just arriving, late today, is today’s posting, complete with statistics our readers will find valuable…. -dh
The Alliance continues to, “tell it like it is.”
Since our inception Headlamp has made it a priority to report the facts that the mainstream media fails to cover. As our readers know Alaska’s oil and gas industry, the state’s primary economic driver, is being hammered by prolonged low oil prices. While legislators and Gov. Walker are trying to raise taxes on an industry that is cash flow negative, thousands of hard working Alaskans have already lost their jobs.
According to the Alaska Department of Labor’s most recent numbers employment in Alaska’s oil and gas industry is down 2,300 jobs from last year. In March of 2015 employment in the oil and gas industry stood at 14,800; as of March 2016 there were 12,500 Alaskans employed in the industry. In a presentation before the Senate Finance committee on March 30, 2016 Dr. Gunnar Knapp of ISER noted that in 2014 the average annual earnings for a person employed in Alaska’s oil and gas industry were $135,445. Headlamp would like to conduct a simple math equation to measure the direct impact of these job losses. We encourage our readers to remain seated.
2,300 lost jobs X $135,445= $311,523,500 million in direct wages eliminated from Alaska’s economy.
Take a minute to consider these numbers. Recent economic impact reports have found that 1 job in the oil and gas support industry creates 9 other jobs in the private sector.
Headlamp would note that the same Department of Labor report indicates the state has added 500 jobs from January 1 through March 31, 2016. We are so glad the state implemented a hiring freeze!
Headlamp has some pointed questions for the media and lawmakers:
Where will these 2,300 Alaskans go for work? Will they simply leave the state?
How does the fiscal note for Gov. Walker’s income tax bill change when 2,300 making over $100,000 per year no longer have jobs?
How many small businesses will be negatively impacted without these 2,300 people spending their money on goods and services?
Why hasn’t the media reported on the number of new state jobs that the Governor’s hiring freeze has produced?
These are the type of questions Headlamp would expect the media and lawmakers to be thinking about and answering as economic policies are being debated in Juneau.
AK Headlamp
A project of the Alaska Support Industry Alliance
And for our readers with global energy fiscal concerns, here’s an opportunity from our friend, Pedro van Meurs. -dh
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…and, for NGP readers concerned about federal overreach, you’ll want to monitor this hearing and the resulting Congressional actions:
Oversight Hearing on Administrative Regulatory Overreach of Methane Emissions
WASHINGTON, D.C. – On Wednesday, April 27, 2016, at 10:00 AM, in 1324 Longworth House Office Building, the Subcommittee on Energy and Mineral Resources will hold an oversight hearing on the “Bureau of Land Management’s Regulatory Overreach into Methane Emissions Regulation.”
| WHAT: | Subcommittee on Energy and Mineral Resources oversight hearing on the “Bureau of Land Management’s Regulatory Overreach into Methane Emissions Regulation.” |
| WHEN: | Wednesday, April 27 10:00 AM |
| WHERE: | 1324 Longworth House Office Building |
Visit the Committee Calendar for additional information, once it is made available. The meeting is open to the public and a live video stream will be broadcast at House Committee on Natural Resources.
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