Part 13: “OIL COMPANY” WALKER, “OIL CAN” ORTIZ, AND OIL COMPANY SOCIALISMBy David G Hanger July 07, 2016
It is to their credit, not their detriment, that so many members of the state house opposed this rancid filth, to take half of Alaskans’ PFD to give $750 million to oil companies to lose even more money, and to otherwise completely destroy the PFD program by taking $2.8 billion in earnings annually from a Fund that only increases by about that much annually. “Oil Company” Walker’s veto slashes last week do not change the math on this consequentially. Oil company credits are cut back some, but your PFD still pays off the oil companies to the tune of hundreds of millions of dollars a year, and “Oil Company” Walker has no intention of rationally collecting revenues from the oil companies. Indeed, “Oil Company” Walker’s obsession with “The Beginning,” i.e. the LNG pipeline, is not merely undiminished, but has increased to the extent that as other possible investors pull back or out he wants to put more of Alaska’s money into it, $25 billion+ give or take. (Gee, guess where that is scheduled to come from?) The 2010 census tells us there are about 710,000 people in the state of Alaska. Wikipedia suggests that number has increased to 738,000 as of 2016. Rounding off our numbers there are about 500,000 people in the Anchorage/Fairbanks corridor (300,000 in Anchorage alone), and probably fewer than 250,000 in the rest of the state. There are 15,000 people in the Ketchikan area, roughly speaking, so the population of Anchorage is 20 times the size of Ketchikan, the Anchorage/Fairbanks corridor about 30 times the size. While Ketchikan Pulp Company on occasion annually had a contribution margin to LPC in the $50 million range, the actual net profits of the mill were in the range of $2 to $3 million annually. The net profits of the oil companies in Alaska for 2016, the legacy fields primarily, will exceed $4 billion, which is 2000 times the average annual net profit of Ketchikan Pulp Company and this in a lean year. For 2014 or 2015 the oil company net profits were 3000 to 4000 times the average annual net profit of Ketchikan Pulp Company. As one very astute young lady noted all resource extraction industries have a beginning and an end, and that end, of course, is when the resource runs out. The Constitutional failure to draw state senate districts on the basis of geography instead of population has created a condition where even the former Governor of the state, Parnell, believes that anyone not on the road network, i.e. the Anchorage/Fairbanks corridor, should not receive any state funding at all. First Palin, then Parnell, through the tax systems known as ACES and SB21 developed a bizarre social engineering strategy, the objective of which was to deny fundamental economic reality and the basic principles of free enterprise by artificially sustaining the landlords and the population base of the Anchorage/Fairbanks corridor. This was accomplished by creating what amounted to and amounts to a “jobs” program of marginal oil exploration of marginal oil prospects by very marginal oil non-producers, all losses of which are paid for by the state as part of this insane “credits” program. None of this activity has in fact resulted in increased oil production. Certain things done ten to 15 years ago have recently increased oil production marginally, but that primarily represents greater efficiency in legacy fields. For this alone Palin and Parnell should hang side by side, but save some rope for the Alaska State Senate, too. For to further this “jobs” program in pursuit of population equilibrium in the Anchorage/Fairbanks corridor these morons gave the oil companies one of the greatest economic windfalls in history for so much nothing. For a while we did not notice because the price of oil was so high. A little dust was slipping through the cracks in the floor, and for a time the state coffers were looking pretty good. AND NO STATE POLITICIAN WAS CAPABLE OF LOOKING INTO THE NEAR-TERM FUTURE DESPITE THE INFORMATION THAT WAS READILY AVAILABLE. Or as Geron Tarr acknowledged, “We didn’t consider what would happen if the price went below $60 a barrel.” This despite the fact that anyone who reads substantive material should have come across the fact that this continent has been oil independent a fair number of years now. 900,000 barrels a day in North Dakota, as many as 1.3 million barrels a day from the Canadian fields, 500,000+ barrels a day from Alaska (the fourth largest producer after Texas, North Dakota, California), etc. There was very little to justify the notion that the price was either going to go up or stay up indefinitely. In the old legacy field, the Permian Basin in Texas, Pioneer Oil recently announced the discovery of reserves (via fracking) that might exceed the reserves in Saudi Arabia. The price of oil is not going up much any time soon. Our oil wealth has been grossly mismanaged from the very beginning. It has corrupted virtually all of our politicians at the state and national level with very few exceptions even on the minority side. For at what point did any one of that minority start raising any real hell? There have been voices: Ray Metcalfe, Hugh Malone, a few other rare voices in the wilderness; but still it is left to a private citizen, to John Suter, to tell us that our Permanent Fund represents nothing more than the magnitude of a massive rip-off of the public purse, and of yours and mine. Norway on similar production levels over the same period of time, and with twice the production per barrel cost, has the equivalent of an $804 billion permanent fund. Alaska’s is $39.2 billion as of last count. In the next three-and-a-half years the Canadian government, even limiting production to 900,000 barrels a day, intends to park no less than $120 billion in public coffers. (I acknowledge that number seems rather high, but it is the reported number. Canadians do tend to be optimists.) Between now and 2020 the state of Alaska expects to owe billions in credits to oil companies for losing money looking for oil where the prospects are real low. Any severance or tax collected from the legacy fields is scheduled to be totally offset by this crap. THIS IS NOT IN ANY SENSE RESPONSIBLE MANAGEMENT OF OUR MOST VALUABLE EXTRACTIVE NATURAL RESOURCE. Day by day we are all being sucked further into the maw of an insane social engineering experiment that has already failed miserably. Yet nut case State Senator Cathy Gilliland insists it is all working according to plan, and Tena Williams and the DAILY NEWS are telling us to shut up, cave in, surrender copious quantities of our dough, finance Anchorage and Fairbanks for a period of no less than 10 years with anywhere up to 50% of our annual income, and to otherwise vote out of office anyone who disagrees with that. Odd though it is, there are exceptional parallels between this fiasco and the aftermath of the pulp mill closure, and ‘curiouser’ yet some of the players are the same. In that instance primarily through the auspices of Jack Shay, J.C. Conley, and Dick Coose $25 million of Federal economic development funds were pissed away trying to prolong the lumber milling industry in Southeast Alaska. It was a forlorn hope going in, had no merit whatsoever as an objective because it was an unattainable objective, and ultimately resulted in the largest bankruptcy in the history of the state of Alaska. It was dumb, the results even dumber, and the consequences grim. Just like then a small group of otherwise inconsequential small minds with somewhat lower educational levels have assumed great power over an economy, over substantial quantities of public and private funds, and over the lives of hundreds of thousands of people, and have arrogated to themselves all decision-making power. To further aggravate a system of already deeply embedded institutional corruption they are the bought and paid for minions of the oil industry, way too many of them lifetime employees of that industry. The problem with legacy fields is they make a lot of money without providing much in the way of employment; the pumps just keep going up and down. Because we do not have a state senate geographically apportioned, all political power is congregated in the Anchorage/Fairbanks corridor, and these jerks just don’t want to admit that the jig is up. Time for a lot of folks in the Anchorage/Fairbanks corridor to find someplace else to live; just like all the mill workers had to move out of Southeast Alaska. All resource extractive industries have a beginning and an end. The parallels between then and now are even deeper than that, however, and far more sinister both in act and in consequence. For just like then the extractive industry in question wants to dump all its bad news on those left behind, and to otherwise suck all possible financial resources dry, both public and private, before they haul ass out of here. Just like then behind the smokescreen of “jobs, jobs, jobs” the industry milks its host to death. YOU REALLY GOTTA BE DUMB TO FALL FOR IT TWICE OVER. I don’t get where Tena Williams thinks we need to finance the Anchorage/Fairbanks corridor’s bad news just because their economy is all messed up. They certainly did not help us when the mills shut down in Southeast. The very idea of wrecking the financial well-being of the 225,000 or so people in Alaska “living off the road net” to finance the deadheads of Anchorage and Fairbanks is as crass and corrupt as is conceivable. “Oil Company” Walker refuses to address the real problem which is the oil companies are stealing our oil for nothing in the way of consequential return to the State or to its people. The real carpetbaggers are the oil company jerks populating the Anchorage/Fairbanks corridor who expect handouts and jobs in perpetuity even when a free enterprise economy dictates get the hell out of here. Walker knows that if a rational royalty and taxing policy were established the Anchorage/Fairbanks corridor would experience a massive clearance sale as tens of thousands moved out of the state. That is what they are trying to prevent by stealing from the rest of us, by burning down the state government and stealing all its revenues as well. It seems so noble, to preserve population, to save jobs, to sustain our wonderful communities; and idiots like Cathy Gilliland just sop this stuff up. But there is nothing noble about ignoring fundamental reality. The Alaska Permanent Fund was not established to provide Anchorage and Fairbanks with a slush fund that they can use and drain to maintain their lifestyle when fundamental economic changes occur in their communities. Nor is the oil wealth of this state supposed to be for the exclusive benefit of the Anchorage/Fairbanks corridor. “Oil Company” Walker has been very specific in this regard. While he is prepared to undo some of the credits for losing money introduced under ACES by Fruitcake Palin and her minions, SB21 is the law of the land and should not be changed. Were it not for the corruption of the Alaska State Senate in general and the very specific corruption of two members of that body (both oil company employees, shock of shocks) SB21 would not have passed out of the senate, let alone be the subject of a corrupt referendum vote where Parnell, et. al in league with the oil companies spent tens of millions of dollars for propaganda to convince Alaskans that what is happening now is a great deal. Those two monsters, individuals completely lacking in any concept of personal integrity and honor, acknowledged their conflict of interest as employees of the oil companies but then voted anyway because the Alaska State Senate has invented its own law that refuses to recognize conflicts of interest. Any man or woman with any concept of personal honor or integrity does not give a damned what any law says, what any stadium full of people says, when their honor is at issue. Their vote should have been ‘abstain,’ and when anyone challenged that the correct response is, “Go to hell.” Instead they are worms, spineless pieces of jelly without honor, without integrity, without any possibility of respect. (Stedman to his credit did not vote for this crap; indeed he made it quite clear at the time he thought a lot of these folks were nuts. Now he wants to give your PFD to these jerks, and for that he should be recalled.) This is the garbage that your Alaska State Senate is. Conflicts of interest are not allowed because they all work for the oil companies anyway, both when in Juneau and when out. This is the garbage that “Oil Company” Walker wants to sustain. His precious Anchorage/Fairbanks corridor gets everything, and he is in a state of shock that everything is burning down around him. His whimpering and his whining do not impress me. When “Oil Company” Walker accepts the fact that allowing these oil companies to steal 500,000 + barrels of our oil a day without any recompense whatsoever is wrong, is stupid, is corrupt, and is unsustainable, and that a whole new method of managing our oil is in immediate order, then and only then am I prepared to even think about listening to him. Stay tuned for Part 14, Summation and Conclusion, including Uncle David’s recommendations to save our collective asses. I actually think it is too late and the only recourse is to relocate. David G Hanger Received July 07, 2016 - Published July 07, 2016
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