To the editor: Bengt called from Minnesota; although he left Alaska in 1980, he loves this place and keeps up with what is going on. He asked why Alaskans would vote against Ballot Measure 1. I told him that the oil industry tells us we are better off if we keep on giving them $8 for every barrel of oil they take to market. The $8 per barrel is referred to as “credits” and can amount to more than $1 billion per year. Bengt didn’t understand because our royalty oil is only 12.5% while in Texas the royalty oil is 25% and our production tax is only about 4%. During the past five years, our low production tax combined with the credits we paid has left Alaska owing the industry nearly $740 million. He implied that we were fools.
I tried to explain that the industry claims to be a partner with the people of Alaska. Bengt thought it was a strange partnership when the state of Alaska paid most of the exploration costs. The oil industry is happy to do seismic exploration when they don’t pay the full cost and we give them credits as well. Now we are receiving world record low taxes on our oil and paying the industry to take it. I had to admit that Bengt had a point.
Measure 1 would eliminate the credits on the old “legacy fields,” and that ought to help. “Yes,” said Bengt, “why would any Alaskan vote against it?” He reminded me of the Constitution of Alaska, where it states that Alaska owns the resources and must develop them for the maximum benefit of the people. This helps us pay the costs of operating our state for its residents. Bengt is still an Alaskan at heart.
A “yes” vote on Measure 1 would allow Alaska to be a partner with the industry rather than a poorly paid flunky.