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My Turn: Alaska Bankers Association: Vote no on one

Posted: July 24, 2014 - 11:06pm

The Alaska Bankers Association represents seven state and national banks in Alaska holding over $10 billion in combined deposits and is the voice for a workforce of more than 2,500 across 132 branches. ABA’s members are job creators, fueling Alaska’s economy by providing the credit businesses and families need to grow. We help facilitate the flow of capital toward productive uses and are actively lending to businesses across diverse industries such as seafood, tourism, construction and mining, among others. There is one industry, however, that dwarfs all others, supports most state government services and accounts for approximately half of all Alaska jobs — oil. ABA members agree that Alaska’s future prosperity depends on continued and increasing oil production and are united in our opposition to Ballot Measure One.

Revolutionary drilling technologies have led to booming oil production elsewhere in North America. For example, combined oil production in the mature oil-producing states of Texas and North Dakota has grown by over 200 percent to 4 million barrels per day from 1.3 million barrels per day in 2008. As an association, we have taken keen interest in understanding why Alaska’s oil production has instead declined by over 20 percent to just .5 million barrels per day over this same period.

Tax and regulatory environments have a direct impact on business activity and job creation. We believe the overly aggressive ACES production tax policy — on top of state royalties, property taxes and state and federal income taxes — was a contributing factor that put Alaska at a competitive disadvantage. In addition, ACES created significant state exposure in low-oil-price environments and with high-cost development projects. From our vantage point, where ABA members are responsible for over 85 percent of non-public commercial lending in Alaska, we see that something has changed in recent months to improve the outlook within the oil sector and we attribute much of this change to the 2013 passage of Senate Bill 21.

It is easy to get lost in the minutiae, but the bottom line is that fewer barrels of oil flowing through the Trans-Alaska Pipeline System is a threat to Alaskans. Arresting the perennial six percent decline rate and growing production from a mature oil basin such as the North Slope, where remaining assets are expensive and complex to produce, will take significant investment capital and a regulatory environment conducive to risk taking. We Alaskans must recognize and adapt to the true, competitive nature of the world around us. Capital is mobile; It goes and stays where it is welcomed and well treated.

One of Ben Franklin’s best-remembered and most useful aphorisms is “a small leak will sink a great ship.” Under ACES, Alaska had fallen to fourth place among oil-producing states with the expectation of further decline. Our Legislature and administration considered and hotly debated the totality of risk and effect of oil tax policy last year and ultimately settled on SB 21, deciding that the best way forward was to focus on the long-term for future generations. Just this week, 13 months after SB 21 was signed into law, it was announced that, for the first time since 2002, oil production off the North Slope did not decline from the previous year. Next month’s primary election presents us all with the opportunity to cast our ballots in favor of our state’s future economic well-being by voting “No” on Ballot Measure One.

• Joe Everhart is a chairperson for Alaska Bankers Association.

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James Coleman
James Coleman 07/25/14 - 07:40 pm
Give it a chance

The $2B giveaway is a Democrat scare tactic. It's hypothetical. We have a Middle East crisis and a Russian crisis, have oil prices skyrocketed? No, they haven't. We need to stay competitive or be left with an empty, rusting pipeline.

Haily George
Haily George 07/26/14 - 08:33 am
U.S. subsidies to the fossil

U.S. subsidies to the fossil fuel industry is $37.5 billion annually. Not only are these oil companies subsidized up the yin-yang by us taxpayers the oil industry also benefits from our tax dollars via public financed infrastructure, court system , educated work force...
Oil CEO's are also paid multimillions.
The oil industry does not need another TAX BREAK! Rather the oil industry should lower their CEO's multimillion dollar annual compensation packages.

Vote Yes on Ballot Measure No. 1
to repeal SB 21 tax breaks.

Stand up and say NO

Mathew  Mulligan
Mathew Mulligan 07/29/14 - 04:54 am
Non-Renewable Resource

The CEO of Conoco-Phillips "Alaska's Oil and Gas Company" just retired in June and was given a 260 million dollar severance gift as he was leaving. He was already a billionaire thanks to stock options. His story is not unique to the company or the industry. These people don't need a tax break-they need a tax increase. Once the oil is sold it is gone forever. The state of Alaska should insure it's resources benefit the people of Alaska and not Texas billionaires.

Karl Ashenbrenner
Karl Ashenbrenner 07/29/14 - 06:28 am
So the

oil companies and the banks are against repealing sb21....isn't that reason enough to repeal it?

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