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Viewpoints: Letters / Opinions

Can Alaskans Be Conned Again?
Vote Yes Ballot Measure 1

By Hal Gazaway

 

August 16, 2014
Saturday


“Vote no” says if Prop one passes, the Big Three oil companies will leave Alaska. They report oil company contracts are on hold until August 20, 2014. Oil and service companies have advised their employees “on August 20th we will see how many pink slips we will have to give out.” This is an old tactic.

An 1859 discovery of the silver Comstock Lode in Nevada made Virginia City a boom town. By 1864 the Comstock surface deposits played out and large corporations took over mining operations in Nevada. In the summer of 1864 delegates gathered to write Nevada’s first constitution. Delegates linked to mining interests claimed taxes on silver would cause corporations to leave the region. The frightened delegates exempted mines from taxation, effectively transferring the tax burden to everyone else.

For 70 years, Anaconda Copper ran Montana. The Montana legislators kept taxes low on copper. Anaconda contributed one park to its hometown, Butte, which it subsequently destroyed when it turned much of Butte into a giant pit mine and superfund site.

For 20 years Alaska taxed oil so low that in 1996 fourteen of the nineteen legacy fields paid no taxes to the state of Alaska. Governor Knowles and legislators, like Andrew Halcro, spoke of funding government from the permanent fund.

As you prepare to vote on August 19th remember Alaska’s recent history with Big Oil:

Before 1989 Exxon lied about being prepared to control an oil spill in Prince William Sound. Following the 1989 spill Exxon promised to make everyone whole, then drug out litigation and appeals for 20 years to pay ten cents on the dollar, on awards by an Alaska jury. Bill Allen bribed legislators, on tape, to pass the oil tax before ACES. In 2010 the Big Three falsely advertised that ACES had caused job layoffs.

Oil brought the Big Three oil companies to Alaska.. They will not leave until oil production no longer meets their business model. They will then sell out to a smaller producer with smaller operations.

According to former Senior British petroleum engineer, Gordon Posposil , “No field the size of Prudhoe Bay has ever been shut in” (Reuters 2/22/2008). Economic tests on the aggregate production profiles from major North Slope units show “robust results” through the year 2075.

In Alaska the Big Three oil companies receive at least 60% of the profit from the oil they produce. They receive more profit from Alaskan oil than they receive in Mexico (5%) or Venezuela (8%), or Iraq (2%). Alaska has never nationalized the oil industry, unlike Venezuela or Iraq. Alaska has not had a revolution, coup, or terrorist attack. Our oil fields are among the most stable in the world.

Tax credits allow Alaska to target the investments we need. To stop the decline Alaska needs to explore and find new fields and new pools of oil in existing fields

ACES encouraged new companies to explore for new fields. Under ACES four new rigs were shipped to the North Slope. New exploration CAN stop the decline in oil flowing through the pipeline. Low oil production taxes will not.

The Big Three oil companies avoid addressing the problem and fix for the problem. To do so would admit Alaska needs to attract smaller companies. The Big Three use old strategies of threatening job losses or abandoning the state.

Alaska became a state to control its future and its resources. We need to make a deliberate decision which tax system promises to provide the long term solution for Alaska’s declining oil production

SB21 gives credits that fail to increase oil flow through the pipeline. SB21 unnecessarily reduces Alaska’s share of the profit from Alaska’s oil. Oil production has been declining for 30 years. A low tax has not in the past, nor will it now stem the decline. Under ELF from 1982-2003 fourteen of the nineteen legacy fields paid no taxes. Those fields continued to decline. SB21 fails to provide incentives for production in new fields. The tax credits in SB21 provide incentives to accelerate production in existing fields.

Nine hundred individual Alaskans have contributed to “Vote Yes”, only eight individuals contributed to “Vote No.” STAND UP for the best interest of Alaska along with 55,000 Alaskans who signed the petition. “Vote Yes” on Proposition One on August 19th to restore Alaska’s Clear and Equitable Share” (ACES).

Hal Gazaway
Anchorage, Alaska

About: "Hal Gazaway attended Palmer elementary school in the territory of Alaska and graduated from Juneau high school. After working nine years as an Assistant Attorney General and Administrative Law Judge in Alaska, he went into his own law practice in Anchorage."

Received August 15, 2014 - Published August 16, 2014

 

 

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