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Letter: Oil not 'worth a nickel' if it stays in the ground

Posted: February 12, 2014 - 1:01am

This is in response to Rich Moniaks opinion piece on Feb. 5 in the Juneau Empire regarding SB 21 and ACES.

Proposition 1 does not create another discussion about oil taxes, but instead takes Alaska back to the failed ACES tax policy. ACES would be bringing less money to the State right now if it weren’t for SB 21 being put into place a month ago. Also, ACES was not a bracketed system; it was a progressive system, which is significantly different than the bracketed individual taxpayers income tax system as suggested by Mr. Moniak.

This issue was part of the debate and discussion that the Legislature deliberated and took testimony on and ultimately decided that ACES was flawed and that SB21 was the best solution going forward for Alaska.

I have heard both sides of the argument and I feel that this is of such importance to our state that the voters really need to get past the sound bites and comments that SB 21 “is just a giveaway to the oil industry.” It is a complex topic, and I don’t claim to be an expert on oil taxes, but in my opinion if we don’t have the incentives for industry to invest in Alaska the pipeline will dry up and all that oil in the ground won’t be worth a nickel to our economy. And it won’t be able to fund the vast majority of the state’s budget for the services and infrastructure we currently enjoy.

I agree with Mr. Moniak’s closing statement that “it’s still our oil,” but there is zero value to Alaska if we can’t get it out of the ground and to the markets.

Industry will choose to go to states and countries where they can find stability and certainty with their expenditures; SB21 will go a long ways to encouraging them to choose Alaska to develop our natural resources.

I will be voting NO to Proposition 1, as I feel it is the best choice for our future and the future of our kids and grandkids.

Scott Spickler


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Karl Ashenbrenner
Karl Ashenbrenner 02/12/14 - 09:40 am

opinion, however at this point in time ACES would bring in more money than SB21. All indicators show that the price of oil will only INCREASE not decrease over the next 20 years unless a viable alternative for oil is found. The oil companies themselves and the Dept of Revenue state that there will be no increase in production so SB21 which purports to give us more $ during times of low prices is a sham. BP in its SEC filings for investors states that it makes close to 28 dollars per barrel under ACES as compared to 2 dollars per barrel in its Iraq operations. North Dakota profits are about 9 dollars per barrel. So giving away 2 billion per year to get 200 new jobs on the North Slope is kind of misinformation especially if you note that for 2 billion we could put 20,000 Alaskans to work for 100,000 per year. Which is better, believing the oil companies and Parnells snake oil smoke and mirrors spiel or ACES that has proven to work for Alaska. I will take ACES and urge folks to vote down SB21...do not believe the hype, look at the facts SB21 is bad for Alaska and Alaskans.

Judy Hodel
Judy Hodel 02/12/14 - 02:12 pm
More Chamber Blather

Keep repeating the same falsehoods over and over and eventually the masses with consider them truths.

William DeRhode
William DeRhode 02/12/14 - 04:08 pm
Let’s Rip Scott’s Opinion Letter Apart

First, the headline: “Oil not 'worth a nickel' if it stays in the ground.“ Actually, the more prices rise, the more valuable it becomes while still in the ground. I would expect a financial advisor like Scott to know that. That’s like saying anything that you own, such as Alaskans owning their oil, has no value unless you sell it NOW! But then again, we are dealing with BS21 instead of ACES…so Scott might be right…under ACES, an increase in oil prices would make the oil “in the ground” more valuable, but under BS21, that extra value goes to the biggest profiting corporations in the world.

“ACES would be bringing less money to the State right now” – Numbers, please! I’m not going to take your word for it. And, by the way, every revenue and budget report that I’ve seen says the exact opposite – that BS21 is actually bringing in less revenue, both now and in the future. Why do you think the Legislature is having so many more budget discussions this session and trying to decide what to cut, as compared to past sessions? It's because they are getting projections on how much less revenue the State will be getting under BS21 as compared to earlier tax royalty structures.

“I have heard both sides of the argument and I feel that this is of such importance to our state that the voters really need to get past the sound bites.” That’s exactly why the repeal is on the August ballot, because it is of ultimate importance to the State. All Alaskans “have heard both sides of the argument” and have decided that the Legislature dropped their Constitutional duty to protect Alaska’s owned natural resources. And the sound bites that the voters need to get by are the propaganda advertisements being spread by the oil companies.

“It is a complex topic, and I don’t claim to be an expert on oil taxes.” So you're not an expert, but you write a letter to the editor? If you “don’t claim to be an expert”, then why push your opinion about something that you are not fully educated on? Do you have an alternative agenda? Is it because Senator Egan’s wife is in your office, and you feel the need to show your disagreement with his views? Or are you just towing the Chamber line? If you're not "an expert" on this "complex topic", then you must have some agenda behind your writing this letter. What is it?

“if we don’t have the incentives for industry to invest in Alaska the pipeline will dry up” How about this for an incentive…the oil companies made more money per barrel in Alaska under ACES, than almost any of their operations elsewhere in the world, domestic and global. Under ACES, oil companies were averaging $28 per barrel profit, compared to $2 to $10 in the Middle East and under $20 in other parts of the US. Under ACES, the oil companies were pumping dollar bills out of the ground at a higher rate than almost anywhere else…THAT’S THEIR INCENTIVE! And by the way, if the “Big Three” move out, there are literally hundreds of smaller and/or independent companies just chomping at the bit to drill OUR dollar bills out of the ground.

“I will be voting NO to Proposition 1, as I feel it is the best choice for our future and the future of our kids and grandkids.” AND I WILL BE VOTING YES for the very same reasons!

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