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Senate leader advises wary friendship with oil and gas industry

Posted: March 29, 2012 - 11:09pm
Senate President Sen. Gary Stevens, R-Kodiak, speaks to the Juneau Chamber of Commerce during their luncheon at the Hangar Ballroom on Thursday.  Michael Penn/Juneau Empire
Michael Penn/Juneau Empire
Senate President Sen. Gary Stevens, R-Kodiak, speaks to the Juneau Chamber of Commerce during their luncheon at the Hangar Ballroom on Thursday.

Senate President Gary Stevens, R-Kodiak, listed off a long list of past transgressions by Alaska’s oil and gas industry to the Chamber of Commerce on Thursday. From the Exxon Valdez oil spill to the Corrupt Bastards Club to what Stevens said was past “deliberate falsifications” by the oil and gas industry.

He said Alaskans were “abused” and found to have practiced “inexcusable trustfulness” of oil companies in the court case Alaska v. Amerada Hess. In that case, the state accused several oil producers of deliberate fraud in paying fewer royalties than they were obligated to do, according to an abstract of an academic paper written on the subject by Willam Johnson at Washington state University. The state eventually settled the case, and received $600 million to do so.

“The wise person learns from history,” Stevens said. “We don’t want to be accused again.”

Alaskans have a wariness of the oil industry, Stevens said.

“A basic mistrust due to an abusive relationship,” Stevens said.

And oil industry corruption is not just a historical issue, Stevens said.

Stevens said former Gov. Walter Hickel told him the oil industry is pumping money into the campaigns of industry-friendly candidates to grease the Legislature for its preferred tax laws.

“See what happens next year with a friendly Senate,” Stevens said. “Watch out, pay attention.”

“I have heard some folks say they are not concerned if this Legislature does not amend ACES,” Stevens said, “because next year they plan on having a much friendlier Senate more likely to do their bidding.”

Stevens said Alaska’s law-makers should keep in mind this past as they craft new oil and gas tax legislation. Like good educators who want more resources for their classrooms, the oil industry never would turn down more money. Gov. Sean Parnell’s tax bill, House Bill 110, gives too much to the oil industry, Stevens said.

The oil industry called it “a good start” Stevens said.

Stevens said the governor’s bill is a $2 billion giveaway with no guarantee of return and a “$2 billion historic gamble,” with taxpayer money, Stevens said.

“Is that reasonable?” he asked.

Stevens said he was skeptical of claim by the Parnell administration that HB 110 would result in tens of billions of dollars in investments by three oil producers, BP, ConocoPhillips and Armstrong.

“Alaskans have been deceived so often by the industry that we have a right to say ‘prove it,’” Stevens said.

The Senate’s tax bill, Senate Bill 192, offers a more modest hundreds of millions of dollars in tax breaks geared toward incentivizing oil and gas exploration. The bill tweaks progressivity to share more revenue with oil companies when per barrel prices rise.

Parnell has made a commitment to return the trans-Alaska pipeline to 1 million barrels per day of production.

Stevens said the discourse about tax reform has gone from honest disagreement to character attacks.

He called for greater civility among legislators, the governor and industry insiders.

Stevens referenced Parnell’s “Choose Respect” domestic violence campaign when he said “we need to show respect across the board.”

Stevens said the late Gov. Jay Hammond wouldn’t like Parnell’s tax plan. He said Hammond created his philosophy around Article 9 of Alaska’s Constitution, which states Alaska’s resources are developed or conserved “for the maximum benefit of its people.”

“It seems a little disingenuous for the governor to say his bill is superior because the industry supports his bill,” Stevens said.

That the oil industry prefers the governor’s bill is natural, he said. It gives oil companies billions of dollars in tax breaks instead of hundreds of millions of dollars.

“Does this surprise anyone?” Stevens said.

Stevens said far from being on its last leg, the pipeline is expect to be around for 50 to 100 years, according to the oil companies. It is normal for mature fields like Prudhoe Bay to face decline, he said.

Stevens told a story about Al Gore requesting two pats of butter from his waiter. The waiter repeatedly returned with one pat. Gore asked “Do you know who I am?” The waiter said “Yes I do, but I’m the guy who passes out the butter.”

“We are Alaskans,” Stevens said. “We are the ones passing out the butter.”

• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.

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