So glad to see Pete Kelly trot out his fiscal acumen (News-Miner, Nov. 18) to better inform us on the potential sale of BP to Hilcorp. Who better than the person who rode herd over the Alaska Senate during the years he steadfastly protected us from the “t” word (taxes) while depleting the Constitutional Budget Reserve to fund government? And of course the person who ramrodded through Senate Bill 21, the oil tax law that has cost the state billions in lost revenue since its inception; $1.3 billion just this past year, given to the oil companies in exchange for them taking our oil and profiting from it in the world market. As a reminder, that $1.3 billion is more than three times the amount of budget cuts our governor (another fiscal whiz kid) tried to inflict upon us this year.
Now, Mr. Kelly insists the Hilcorp deal will be a big plus for the state, and that very well might be the case. But before we condone such a transfer of assets, it seems only intelligent, and more so, imperative, that we subject this deal to the highest scrutiny.
Hilcorp has a less than stellar environmental and safety record. Can we afford to allow poor performance in those areas to go undeterred? They are a limited liability corporation, and as such will not pay the state corporate income taxes of approximately $30 million annually. At a time when Alaska is already hemorrhaging money to the oil companies via SB21, can we really afford to take another $30 million hit every year? Hilcorp is a privately held company, accountable to no board of directors or group of shareholders, and they wish to keep their books out of the public eye, implying it might compromise its competitive advantage. I would much rather have its books open so they don’t take advantage of us!
In a later Community Perspective (News-Miner, Nov. 19), Mr. John Shively defends Hilcorp, essentially saying Hilcorp is just another BP. Citing my previous paragraph, I would argue this is not the case. BP is a global company with responsibilities to its shareholders, and it was bound by the Knowles administration to a charter that compelled them to act in our favor. Hilcorp is beholden only to one person, Jeff Hildebrand. There is no public pressure to keep Hilcorp on the straight and true. Mr. Shively insists the state is doing its due diligence, and we should all hope that is true. But I wonder just how diligent we would have been had the original public comment period (essentially one week’s notice) been adhered to. Contrary to one of Mr. Shively’s points, oil companies are doing quite well up here; ConocoPhillips, the only company I know of whose books are open to Alaska eyes, makes more money in Alaska than anywhere else in the world.
I would love to see a new company come here and help keep the oil revenue flowing but not at the expense of worker safety, the environment or our fiscal future. I have a hard time following blindly those who have sold out our revenue source through bad legislation (Mr. Kelly) or who are employed by extractive industries that insist there will be no down side to their practices (Mr. Shively, current head of the Pebble Mine project) but which have the potential to devastate the largest salmon fishery in the world.
Karl Monetti lives in North Pole.