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My Turn: SB 21 is Working - give it a chance

Posted: August 15, 2014 - 12:06am

Come Aug. 19, I will be voting “no” on Ballot Measure 1.

A “no” vote will continue Alaska down the road to economic prosperity. It also represents a simple acceptance of the facts: ACES failed, while Senate Bill 21, also known as the More Alaska Production Act (MAPA), essentially stopped the drop in North Slope oil production and is attracting billions in new investment. I voted against ACES in 2007 due to its major flaws. Seven years later, the policy has been proven to be a failure.

In 2013, the last year of ACES, oil production plummeted by 8 percent, representing a loss of $1.8 billion. Alaska’s gross domestic product also declined 2.5 percent, making it the only state in the nation to see economic decline.

After only eight months under the new oil tax reform, however, the 24-year decline in North Slope oil has finally abated. Six new rigs have come online and Alaska has seen a staggering $10 billion in new investment, which will mean more revenue and bigger Permanent Fund Dividend checks.

The new investment dollars are no coincidence; they are purposely built into the blueprint of oil tax reform. SB21 directly ties tax credits to oil production by requiring oil companies to put new oil through the pipeline before getting a tax break. Under ACES, tax credits were paid to the oil companies for capital spending, which meant the state of Alaska was giving oil companies billions of dollars with no guarantee of new oil. In fact, if we revert to ACES, Alaskans will have to dole out nearly $1 billion in tax credits for spending on Point Thompson.

It’s suggested we can simply go back and tweak ACES, despite its massive flaws, but there’s no such thing as a small change in the tax system. It will be difficult, potentially a multi-year process, resulting in the third change to Alaska oil tax system in eight years, creating yet more instability. Stability, after all, is a key element to remaining competitive because businesses need a stable tax regime when making long-term plans.

Alaskans should be proud their legislators responded to the failures ACES and supported oil tax reform in a bipartisan final vote (12-8 in the Senate). In fact, I do not know a single legislator in the state who believes ACES was not flawed. Eight months into oil tax reform, we’re seeing the positive effects of the major resurgence of investments on the North Slope.

These developments under the new oil tax reform add up to a big win for Alaska. With an economy fueled by a healthy oil industry, we’ll have more high-paying jobs for Alaskans and more funding for education, roads, law enforcement and basic infrastructure.

This is just the beginning. Oil tax reform will build a bridge into the future toward development on the outer continental shelf and hopefully the Arctic National Wildlife Refuge.

I urge my fellow Alaskans to cast their votes based on the facts and common sense, not empty rhetoric and scare tactics. The people of Alaska must make a decision. A “yes” vote will regress to a tax system we all know was a failure. A “no” vote will tell the rest of the world we are open for business and on a path toward long-term economic prosperity, guaranteeing the Alaska Permanent Fund will continue to grow, more Alaska businesses will prosper, and all of our children will reap the benefits. I encourage every Alaskan to check the “no” box and give oil tax reform a chance to work.

• Alaska Senate President Charlie Huggins, R-Wasilla, has served since 2004. He leads a caucus of 13 Republicans and two Democrats.

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Art Petersen
Art Petersen 08/15/14 - 11:11 am
Yes on Ballot Measure 1

People can usually take an opposing position on an issue with at least some good points. Not so in this case. As with the view that the earth is flat and the earth is the center of the solar system, things need to be turned 180 degrees to put them right. ... Here is a small example of the reversal that's needed in Senator Huggins' view:

Alaskans should cast their votes based on the facts and common sense, not empty rhetoric and scare tactics. The people of Alaska must make a decision. A “yes” vote will lead to revision of a tax system we all know was a success but that needs progressivity adjusted. A “no” vote will tell the rest of the world we are open for the business of giving Alaska's oil away for very little and that Alaska is on a path toward long-term economic decline, guaranteeing the Alaska Permanent Fund will one day have to be tapped to pay for minimized services, fewer Alaska businesses will prosper, and all Alaskans and all of their children will reap irreversible harm. Every Alaskan is encouraged to check the “Yes” box on Ballot Measure 1 and give oil tax reform of ACES a reality-based, reasonable, and equitable adjustment.

Kevin Nye
Kevin Nye 08/15/14 - 09:33 am
Thumbs Up

Now, how can anyone argue against the logic of this? AND, I have friends who work up on the Slope who have seen, and who have been positively impacted since the implementation of Senate Bill 21. People don't like the idea of Outside oil companies coming into Alaska and making a profit off of "our oil". The fact of the matter is, if you as an Individual or we as a State do not have an "oil company" to do the work, then, the stuff just stays in the ground. One individual in a Facebook conversation about this very thing, said something to the effect of "All of these oil companies should take their drill rigs and equipment and just go home! This is OUR OIL!!" And I thought "Oh really? The WHO is going to do the work?"

Amazing as it may seem, these oil companies, as much money as they DO make after all of the work is done, have a very small profit percentage. The money is huge, and I do not dispute that, but the percentage is small compared to what other businesses need to have to survive. In 2011, for example, Exxon brought in 433 billion dollars. But after expenses of 392 billion dollars (gee, where did all THAT go?-into peoples' pockets, that's where), they profited "only" 41 billion dollars which, is only a 9.4% profit.

The oil companies with their infrastructure in place are the ones who know what the hell they are doing, not, as awesome as we all are, the common Joe Alaskan...


Haily George
Haily George 08/15/14 - 10:12 am
Kevin: Below is an example

Kevin: Below is an example of the kind of wealth the oil industry is generating from public resources. This is in todays news

Today in North Dakota, Harold Hamm is going through a divorce. Harold Hamm is a 68 percent stake holder in Continental a leading driller in that state.

Continental's return on investment was at least 44,271 percent during the Hamm marriage, Button wrote. The average return among peers - extrapolated over the same period - was a relatively modest 691 percent, the report says. (The analysis is from Kenneth Button, an expert witness hired by wife Sue Ann Hamm)

All told, Button's analysis suggests that the marital capital subject to division could add up to some $17.6 billion. that's $17.6 BILLION DOLLARS!

Something is very very wrong here. There is no good reason on earth people should be making that kind of money off of public resources. These oil companies CEO's are destroying this planet, and living like kings and queens as they do it. Rather than raking in billions they should pay more taxes and pick up the tab for all the damage they are causing from storms, floods, droughts, pollution,...... after all these resources belong to the public.

Kevin Nye
Kevin Nye 08/15/14 - 11:05 am
Powerful Oil Companies!

"pick up the tab for all the damage they are causing from storms, floods, droughts, pollution,...... after all these resources belong to the public."

Oil companies do these things? Wow! They must be Gods up in the sky then huh? Wow! So, they must be the ones that are causing all of this daggone rain here in SE Alaska huh?

And Haily, Harold Hamm is not "making that much money off of public resources". The oil being developed in North Dakota is all being developed on Private Land. And this is the reason they are allowed to drill there, because Uncle Sam cannot tell them "No" because it is on private land.

And by the way, would you like a good job Haily? Go to North Dakota! There are not enough people there to work those very profitable jobs being supplied by those "nasty" oil companies! The place is booming and is but a microcosm of what our national economy could look like if Obama would take his foot off of the hose and allow oil exploration and development on public lands, starting with the Keystone Pipeline down from Canada. Just think, we could get off of the Middle East Oil Teat and have our OWN energy resources while developing alternative energy resources...

Tom Rutecki
Tom Rutecki 08/15/14 - 06:19 pm
Exxon Didn't Pick Up the Tab

It is amazing that there are those that want to give more of OUR money to Big Oil.

Exxon fought tooth and nail to avoid paying the judgements made against them. For example, their 2.5 billion punitive damages settlement was reduced to just 500 million, which is something like one week's profits for them back in 1989 when the Valdez ran aground.

Exxon makes $500 million in profits in about 15 minutes now.

Exxon didn't pay punitive damages right away. It took nearly 20 years or more for those that got something to get some cash from Exxon. And by that time the banks were all over fisherman who lost their livelihood due to the oil spill.Creditors (e.g. boat and house payments) were all over those folks and many loss every thing.

LOL 11 million gallons of oil have no affect on herring according to Exxon in the area? Herring seiners were financially wiped out. What will I hear next? Must be nice to be able to distort the facts when you have $20 billion more that financially devastated fisherman did not get in your pockets to spend.

The fact that you can walk on the beach in Prince William Sound turn over a rock and find crude oil means nothing according to Exxon? The fact that the crude is STILL "dispersed" to the bottom of the sound or just below the surface doesn't matter? or the smell of it is still there?and NO its not was never cleaned up. simply swept under the rug, out of sight out of mind. But Exxon tells us it is no big deal.

Vote YES on 1

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