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Community Perspective

Governor, legislators won’t change oil taxes, so we must

In November we will vote whether to pass Ballot Measure 1. Industry and their supporters are trying everything to stop this vote from happening. They attempted to reword the ballot language, claiming it was confusing. They also argued signature collectors were paid too much. The Alaska Supreme Court sided with ballot supporters each time. Of course, industry will still have millions of dollars to spend in an attempt to deny Alaska its fair share.

I support Ballot Measure 1 for two main reasons. First, Senate Bill 21 was crafted and passed by Senators Micciche and Meyers, both of whom were employed by ConocoPhillips Alaska. The bill was championed by former Governor Parnell, a former ConocoPhillips Alaska attorney and lobbyist . Our current system allows for legislators who will directly benefit from legislation to vote rather than recuse themselves. That is wrong and should be illegal. In “Dirty South,” an article published by Harper’s magazine in November 2013, author Ken Silverstein wrote, “In most states, the oil industry hires lobbyists to pressure elected officials; in Louisiana, it gets industry executives and hangers-on elected directly.” Alaska can and must do better than Louisiana.

Second, the failure of major North Slope producers to build an ultra-low-sulphur diesel plant on the North Slope damages their credibility. This fuel has been required statewide since 2005. Rather than build a small refinery on the Slope and provide high-paying jobs in construction, engineering, and operations (like they always advertise), industry decided to go Third World. Currently, crude oil is shipped 800 miles to Valdez (or Kenai) for refining and then trucked back up to the Slope. Empty trucks then make the 800-mile return trip south to get another load. This results in an incredible waste of energy and massive amounts of unnecessary pollution. Spills are an even greater concern. The Anchorage Daily News had an excellent article by reporter Alex DeMarban (Nov. 27, 2016) with photos of wrecked trucks and numerous reports of tanker accidents have appeared in the Daily News-Miner. At that time, there was an average of eight tanker spills per year since 2008. Tragically, two truckers hauling this fuel have needlessly lost their lives.

Why won’t industry build a plant? As usual, it’s all about the money. In 2005, industry promised to build a plant, but in 2007 they refused as they did not get the state tax credits they wanted. This refusal occurred during a period of record oil industry profits. In other words, industry would only do the right thing if the state subsidized construction. To add insult to injury, under our current tax structure, transportation costs are tax deductible. We have an incredibly inefficient transportation system for providing fuel on the North Slope and we all pay for it.

In a Sept. 1 News-Miner Community Perspective, former Attorney General Michael Geraghty claims, “Complicated tax policy should not be decided at the ballot box.” I agree it would be better to have a robust discussion in the Legislature with expert witnesses and vigorous citizen input. Obviously, neither this governor nor Legislature is about to hire a consultant to evaluate Senate Bill 21. In 2006, the state hired Dr. Pedro Van Meurs, a highly respected consultant who specializes in oil and gas economics. He stated that the Big Three oil companies were “in extreme harvest mode on the North Slope and have been for years.” It is clear why there are no more consultants or hearings. The only recourse left is passage of the Alaska’s Fair Share Act. Former Governors Hammond and Hickel always demanded Alaska get its fair share.

Please help reassert Alaska as “The Owner State” by voting yes on Ballot Measure 1.

Leon Lynch worked for the Alaska Division of Mining, Land and Water in the Department of Natural Resources, doing field work and oilfield project permitting on the North Slope from 1990 to 2009. He lives in Ester.


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