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The great oil tax debate: Don't let Alaska's oil be exploited by others

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Posted: Sunday, November 4, 2012 1:00 am | Updated: 11:55 am, Mon Jan 21, 2013.

Community perspective

Around the time Alaska became a state in 1959, I began working my first job in downtown Fairbanks as a 7-year-old, selling newspapers as a barker on Cushman Street between Second and Third avenues. “Extra! Extra! Read all about it!”

I have been working downtown and paying close attention to the big issues in Alaska ever since.

I knew my dad, Tommy, believed deeply that the Territory of Alaska should become a state. He had served in the Army right here in Alaska during World War II, sharing a pup tent with Sen. Lyman Hoffman’s father, protecting the territory for the duration of the war.

After the war, Dad was active in the fight for statehood because he thought Alaska should be part of the growing economic engine. America was the land of opportunity, and he wanted us to be a part of it.

I believe these things, too. In the “great oil tax debate” of 2012, I have relied upon the lessons learned from both my own father and the founding fathers of our state constitution for guidance.

Bob Bartlett, who was recognized as the architect of Alaska statehood and was elected as our first U.S. senator, understood the value of our natural resources to the people of Alaska and expressed grave concern about the potential exploitation of our oil and other natural resources.

At the Constitutional Convention here in Fairbanks in 1955, Sen. Bartlett recognized the obvious: “Where such vast resources potential exists, one need not be clairvoyant to foresee an influx of interests wanting to develop these resources.”

Sen. Bartlett’s enduring legacy, though, is based on the words he spoke next, which foreshadowed the current oil tax controversy: “This moment will be a critical one in Alaska’s future history. Development must not be confused with exploitation at this time … The first, and most obvious, danger is that of exploitation under the thin disguise of development.”

As we have seen in the last two years, Bartlett was correct. There are political and economic interests pushing toward exploitation of our resources and, at this moment, they are spending hundreds of thousands of dollars to influence the outcome of this election.

In 2011, Gov. Parnell introduced legislation that would dramatically reduce taxes on the oil industry and increase their profits by about $2 billion per year, with no guarantee of increased oil production. Bartlett’s challenge was to avoid precisely this heavy-handed push towards exploitation, which he properly identified as, “a betrayal in the administration of the people’s wealth.”

After much research and expert testimony, both Republican and Democrat senators opposed this misguided attempt to give away Alaska’s resources wealth to outside corporate interests. As a result, individual members of the Senate’s bipartisan organization, including me, have been targeted during this election season.

This tax giveaway must be rejected because it leans too far towards exploitation. There has been no industry commitment to actually increase oil production from the legacy fields. There has been no commitment to invest more money than Alaska would give away in the tax reduction. There has been no commitment to hire Alaskans over non-residents. I find this unacceptable.

As Bartlett and his colleagues pointed out, Alaska’s oversight of all resource development activities is a constitutional obligation. We are an “owner state,” meaning that our oil is located on state land and belongs to all Alaskans equally. It is my constitutional duty to advance our ownership interest. Alaska must have leaders in the Capitol who will stand up for all Alaskans.

You should know that I introduced and supported a moderate decrease in the oil tax rate, focused on reducing the impact of progressivity when the price of oil is high. I also voted for legislation that would have incentivized the production of new oil from new fields. The governor and major oil companies rejected these reasonable measures because they were pushing hard for the giveaway — and they will continue to push hard for the giveaway in the next legislative session.

Alaska is poised for a North Slope oil boom. Exploration, drilling and employment are up. Recent headlines indicate Exxon is proceeding with Point Thomson development and ConocoPhillips is advancing with development in the National Petroleum Reserve-Alaska. Shale oil is showing great promise, and heavy oil development is also making progress.

With all of this new development on the immediate horizon, the words of Bob Bartlett have never been truer than now. Development? Yes. Exploitation? No.

Please join me in standing up for Alaska. I appreciate your vote on Tuesday.

Joe Paskvan was elected to the state Senate to represent Fairbanks and Fort Wainwright in 2008. On Tuesday’s ballot, he is the Democratic candidate for the newly created Senate District B. He was born and raised in Fairbanks. He is an attorney and small business owner, and has worked in downtown Fairbanks for more than 40 years.

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