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Gov. Sean Parnell said Alaska is in a crisis, and only he is doing anything about it.
He told reporters at the Capitol on Tuesday he was not willing to let oil production to continue to decline at 6-8 percent a year, and that only a bill he has proposed can reverse that.
“Alaska has already lost 140,000 barrels a day (of oil production) in the last four or so years,” he said.
Alaska’s oil tax law, the Alaska’s Clear and Equitable Share Act, or ACES, was adopted about four years ago, leading the governor to suggest a cause-and-effect from that plan.
“I’m not willing to accept the status quo decline, I’m not willing to accept Alaska’s economic decline,” he said.
Parnell again blamed the ACES tax for driving oil industry jobs from the state, despite news from his own Department of Labor & Workforce Development that oil industry jobs are at record highs.
Parnell said House Bill 110, which he introduced last year, was the only way to get to the 1 million barrels a day of oil he said the state needed and keep Alaskan workers and companies from going to North Dakota.
That bill passed the House last year but is stalled in Juneau Sen. Dennis Egan’s Labor & Commerce Committee, where it apparently has little chance of passage.
Elsewhere in the Capitol, Pedro van Meurs, a legislative consultant on oil industry fiscal systems, said the bill wouldn’t do what Parnell claimed and wouldn’t attract the investment needed to reach that million-barrel level.
The state’s big oil producers, including ConocoPhillips, BP and Exxon Mobil Co., are not actively trying to increase production, but instead are trying to produce the state’s remaining oil as efficiently as possible, a standard industry process called “harvesting,” van Meurs said.
“They are literally harvesting as much as they can harvest,” he said.
They’ve been doing that for many years, he said.
“Alaskans have to realize that the three major oil companies are drawing money out of Alaska at the absolutely maximum rate that is technically and economically justifiable,” he said.
The companies are not reinvesting profits made in Alaska in the state for the low-margin business of extracting the remaining oil, but instead are looking for bigger opportunities elsewhere.
Senators who have been listening to van Meurs said Tuesday that his presentation showed they made a good decision by not passing House Bill 110 last year.
“It should be very clear now why the Senate took such a strong position and wanted the information before we took action,” said Sen. Bert Stedman, R-Sitka, co-chairman of the Senate Finance Committee.
He said the Senate was being asked to make decisions that could cost the state billions without adequate information to back up the need for action.
Senate President Gary Stevens said van Meurs’ information indicated “it would have been quite a disaster if we’d passed House Bill 110.”
Parnell maintained his bill was the only plan to get to his goal of a million barrels a day. They need to end the “paralysis of analysis,” and pass his bill, he said.
“They are driving Alaska into the ground and I am not going to let them,” he said.
Adding urgency to his call was his claim of a steady increase of 6-8 percent a year, though his own administration’s experts in the Department of Natural Resources and Department of Revenue are projecting a decline rate of about one third of that.
Parnell defended using the higher projected rate of decline than that provided by state staff, saying that’s what he’d been told by the companies themselves.
Consultant van Meurs told the legislators that Alaska’s field decline was normal for aging fields, and much less than the decline facing some other areas, such as Mexico.
“House Bill 110 was not the way to go, that’s crystal clear from the evidence,” said Sen. Hollis French, D-Anchorage.
• Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneauempire.com.
Comments (39)
Add commentWrong.
Will someone please remind our Governor that the Senate does not work for him, he is not their boss. The Senate works for US, the people who elected them.
The Governor is over the top on this. Just because the House toadies passed this bill in haste doesn't mean he can "demand" the Senate do the same.
The Senate did their homework. The House did not. Thank God for Senators like Stedman, French and Egan who sensed that something was just not right with the Governor's plan, then they did a little digging. They did their job!
And the "paralysis of analysis" as the Governor called it, showed serious flaws in the Governor's claims that $2 billion given annually to the oil companies would magically translate into more oil being produced and would magically translate into more jobs for Alaskans. The only thing it would magically do is give the oil companies $20 billion over a decade with no promises of anything in return!
Alaska can't afford that!
My suggestion: Instead of twisting the Senate's arm, he should be twisting big oil's arms. He should demand they invest their own profits (which are in the billions already) more production, increase throughput, create more jobs for Alaskans, or, we give their leases to someone who can.
But I think we all know what's really going on here..........
Prove It
If the Governor would provide sound economic models to justify his position then I would support his theme. As yet his administration hasn't provided anything close to support his postulate. Sarah wins this round.
Complex issue
After watching several hours of TV, Gavel to Gavel, the past few days, seeing the testimony and information available to the Senate Finance and Resource committees, I am very glad that the Senate did not accept last year's bill that passed the house.
I find that the issues are very complex, many factors are intertwined and there is no simple,easy solution. The one thing that seems clear is that the Governor's proposal for tax reduction won't really solve anything.
I congratulate our State Senate for doing the right thing and trying to sort out all the factors before proposing a new bill.
Quite the tantrums the Gov's throwing these days
“I’m not willing to accept the status quo decline, I’m not willing to accept Alaska’s economic decline,” he said.
No, he certainly is not. Instead, he's intent on accelerating the decline with his massive giveaway.
Thank you, Senator Egan, for putting the brakes on that insanity. And no thanks to you, Cathy Munoz, for voting for that bill.
Message from Governor Parnell
To: The People of Alaska
From: Governor Sean Parnell
DON'T CONFUSE ME WITH THE FACTS!!!!!!
Please ignore Pedro van Meurs and other experts who know what they are talking about. And as far as Egan, Stevens, and Stedman are concerned, I am am going to dissolve the State Senate. Why have 'em around if they are not going to do my bidding?
Parnell under pressure
Parnell must be under pressure from his bosses the oil execs. Parnell said "They (the Senate") are driving Alaska into the ground". Well in my opinion, Parnell is the one driving Alaska into the ground and not just with the oil tax giveaway. If he cant govern (which he has proven he cannot) he needs to resign and allow Alaska to move forward agin.
Parnell Around The Bend
The head cheerleader doesn't realize the game is over. Parnell keeps yelling into his microphone but his very few fans have left the stadium. He is tone deaf to the fact that Pedro devastated the home team, and by a wide margin. As Pedro said many times yesterday, "That's absolutely correct."
our Monarch speaks
Apparently Parnell does not realize he is not king. For kings get to demand what their appointed agents must do while elected governors must request the elected legislators consider his concepts.
I read another report yesterday from a presentation to the legislature. The main thrust of which was: oil companies are taking profits out of Alaska as fast as they can with only a small reinvestment for more development. Oil companies are not interested in more productions just higher profits.
Parnell has a goal in mind for a million barrels a day. All without any revenue to the State.
all of the above....
are good.
Man, where to start while reading this article? My buddies told me "y" was true, so even if analysts say "x" is true, they must be wrong.
Jobs are down - ignore the facts that say jobs are up.
quit the "analysis paralysis" - codespeak for 'don't pay attentiong to those pesky facts.
Wow. Just wow. He really wants that oil baron job bad, doesn't he?
Governor Parnell - when EVERYONE around you, even your own party, is in 100% opposition to you - then it's likely the problem is YOU.
Slow and Steady
Governor Parnell is a fearmonger. He is scaring us to believe that if we move slow and steady that we will put ourselves in dire straits. What about our children and our children’s children? We have to think about the future; not next year not two years from now but 40 years and further in the future-long after Parnell is dead.
The long term effect of giving 2 billion away in revenue for 10 years is tremendous. If you look at what the money would have done had it been invested in say the Constitutional Budget Reserve (CBR) or PFD assuming a rate of return of 7% after 10 years we would have lost around 30 billion dollars from HB110 (3/4 of the value of the PFD). One in the hand is worth two in the bush and the slow turtle won the race.
A few things missing
I'm all for Alaska responsibly developing its resources but some items are amiss here, or maybe I'm not seeing them. Have we gotten any firm committments from the oil companies that they'll pump more? Or is it a pass this bill and we'll get back to you. Also, how about some type of sliding scale, the more you pump, the bigger the tax break. Not the whole enchilada at one time.
intellectually dishonest
Sean Parnell is an intellectually dishonest Governor that Alaskans will never trust again and so he should step down
Thank you to Sen. Egan
...and Senators French and Stedman. Gov. Parnell is clearly out of his mind. Then he screams that funding education is a give away?? Wow, just wow... YOU, Gov. Parnell, are the one driving Alaska into the ground. It's past time for you to go.
hard to believe
It really is hard to believe that Parnell is as malevolent as he appears. But as months go by, and his push to sell Alaska to the highest multinational bidders while leaving many of its residents high and dry continues, Parnell is solidifying his self-earned reputation of a greedy, single dimensional crony-capitalist.
A quick review:
-Parnell attempting to bully the Senate to pass his big oil giveaway of $2 billion/year
-Parnell blasting the Senate, claiming that investing in education is a "giveaway"
-Parnell plowing forward on the Road to Umiat, even though no thorough assessment or analysis of resources in the Umiat region has been conducted... side note, the Road to Umiat could be funded publicly while allowing for private access only
-Parnell dissolving Coastal Management in 2011, and attempting to kill Coastal Management's record-breaking initiative in 2012, giving big industry a voice over local Alaskans
-Parnell directing the change of the Department of Natural Resources mission statement against the will of the legislature, dropping the words "conserve," "enhance," and "future Alaskans" from the statement
His allegiance lies with the industry for whom he was a former lobbyist, not with every day Alaskans. Go back home to California, Parnell.
Wishful thinking
There's no evidence the oil companies could amp up production, with or without tax breaks, to a level that would entice them to invest more money in our fields rather than more attractive locations. I'd like to believe Parnell is simply misguided, and has the states' best interests in mind, but it sure doesn't look like it.
PARNELL
RECALL RECALL
Prawn Shrimpshell's hard sell
"Parnell defended using the higher projected rate of decline than that provided by state staff, saying that’s what he’d been told by the companies themselves."
So, wee gubernator, your trust lies with "the companies themselves"-- you trust not your own employees?
Tell me again who you represent here?
This tortured journey of HB 110 at least has served to expose the more short-sighted members of the House as what they are: incompetent and untrustworthy of managing our one-time resource which is now in decline.
Any House member who fell for either the governor's blandishments or followed their Speaker/Chairs blindly on this are without shame let alone any backbone.
They stain their office and will darken the pages of Alaska's history in their utter lack of intellectual depth. In fact they have proven themselves capable of being in the U.S. Congress with its single digit approval rating.
And now to see this pathetic afterpalin boob throwing a hissy fit from his sandbox right into the face of the facts again and again as if we citizens are not capable of detecting fraud and deceit day after day?
The only other plausible thing to consider here is that Parnell is actually so full of fealty to corporate infrastructure he has been noggin-scrubbed too much to even have an original and independent thought at his disposal.
Parnell is a state senator from an oil executive district at heart and does not have the acuity to address the state as a whole as governor. It's all about oil companies to him just as it was when he worked against us for Exxon on the tragedy of the 1989 spill. Think Jan Faiks as governor and you'll have Sean pretty well pegged.
I will gladly work to recall this corporate errand boy so he can join Wisconsin's soon to be ex-governor Scott Walker on the $5 million per month donation tour begging from Koch Industries, CPAC, ALEC and other far-rightie concerns.
That's where Sean's comfort zone is, he is less than welcome in the Alaska I've called home for my lifetime.
He's robbing the bank in broad daylight.
And that ain't right!
I'd like to see his law school transcripts sometime to see how he did on ethics...if indeed the school included that course.
Thanks to all of the statesmen in the Senate for their measured probity and courage in the face of this attempted extortion. You are to be admired and remembered for your stand.
Let's look at the way Parnell thinks for a minute.
Parnell is a manipulator. If you reverse engineer his remarks, it is obvious that he makes up his mind on policy first, then rationalizes his supporting arguments after the fact, then comes up with manipulating remarks to try to alter behavior of voters. He does this over and over again. Where he is coming from is really his pre-concieved position. This really is very common with a lot of people, including politicians. It is a kind of backwards thinking.
People who are good at planning, managing & solving problems identify the issues and or problems first, make logical conclusions and use those conclusions to form policy to address the original issues - especially if a manager is supposed to represent a constituency or provide leadership for the common good.
On the other end of the spectrum, special interest people do the same process in reverse. They are usually motivated by greed. They establish their policy goals first, then back-engineer a plan with goofy logic or conclusions to support their goals. Then they tell all the little people whatever they can to manipulate them to support those conclusions. These two methods are virtually direct opposites of each other. People who are good at understanding motivation in individuals understand this dichotomy and can see it at work every day in all kinds of conversations.
Of course, people who do not recognize this dichotomy are much more confused than people who do understand it. To them, the world is shades of gray and rather mushy.
Bottom line is, we have to get another Governor. But I guess you all already knew that.
crisis?
How is giving your cojones on a silver platter to Big Oil beneficial to Alaska? The last thing they need is a tax break! They've been hiring Outsiders since they set up camp. It's time for our elected official to put down some ground rules for Big Oil.
Who is Parnell REALLY working for?
That Puppet Parnell would rather believe the numbers that the oil industry spoon feeds him as opposed to the numbers that the Department of Natural Resources and Department of Revenue give him -- especially when it's been proven in court that the oil industry consistently lies about their own numbers -- should indicate to everyone that Parnell is not fit to hold office anymore.
Alaskans shouldn't be paying his salary when he so obviously works for the oil industry. He should resign like his predecessor.
Wow...
Check it out there, SEAN - so far, you're batting 1000! Every single blog to this point is like telling you that you have your head lodged somewhere dark... Politically astute, you are not - and neither was your predecessor. However, at LEAST your predecessor funded education. At least your predecessor helped bring in ACES and more oil revenue. Geez, I never thought I'd say this, but "The Quitter" was a better governor than you (and she wasn't good). YOU work for Alaska Sean, and (evidence to the contrary) not for the oil industry - get a clue. Your "deal" is a bad one for Alaska. You should be the firswt to say it, if you weren't in their pocket. Additionally, the Legislature works for Alaskans, not you. You mis-calculated bigtime with your "demand". Alaskans "Demand" their fair share. Alaska is one of the most profitable places in the entire WORLD for the oil companies to conduct business - with ACES in place.
Recall
Is there recall in Alaska? If not, there should be. How stupid does Parnell thinks alaskans are?
I second wolfmagic above
I concur with wolfmagic above.
Cathy Munoz REALLY needs to explain herself.
Thank you to all the Senators for holding the Governor's feet to the fire.
Shame on every House member who voted for this in haste. You nearly gave away billions of dollars for nothing. DO YOUR JOB NEXT TIME!
NOW may we RECALL PARNELL?
1. He abdicated his Article X responsibilities by letting Coastal Management Lapse;
2. He consciously and with calculation violated Article VIII of the Constitution by acting to reduce state revenues from Oil Taxes WITHOUT establishing either the public interest or benefit;
3. He consciously and with calculation violated Article VIII of the Constitution by supporting a change in the Mission Statement of the Department of Natural Resources away from the Mission inherent in said Article;
...and many, many others. Fill in the blanks with your own favorite failure of this Governor to fully and faithfully execute his duty of office.
NOW MAY WE RECALL PARNELL?
Recall this oil soaked rag
http://www.elections.alaska.gov/pbi_rc_gi.php
If my understanding is correct only 10% of voters must sign the petition for a recall election.
At best we throw his a$$ out, at worst we've distracted him a bit which will perhaps lessen the damage he can cause.
As a side note, it seems the oil companies got lazy and threw the bulk of their effort into buying the governors seat, when perhaps they should have spread their efforts out and bought more small time reps and sens. As a result of this poor strategy on their part we're left witnessing an underprepared, weakly disguised oil executive attempting to brush away an entire legislature that thankfully still has enough decent bodies to resist his absurb notions and (gasp!) actually think about what's best for Alaskans.
question
@Copper River: I admit my naivete here... What was Parnell's role with Exxon in the 80's in PWS?
...A positive note!
I'd like to say a nice thing about Parnell as everyone here is only ripping on him. He has nice neck ties.
Southeastfood:
Parnell's role in the Exxon debacle was to represent Exxon so that they paid out as little as possible in damages to the State of Alaska.
...A positive note!
I'd like to say a nice thing about Parnell as everyone here is only ripping on him. He has nice neck ties.
Southeastfood:
Parnell's role in the Exxon debacle was to represent Exxon so that they paid out as little as possible in damages to the State of Alaska.
unbelievable.
Wow. I didn't realize that part of the equation. I knew he was formerly employed by Conoco as their director of government relations, and I knew he lobbied for Exxon. But I wasn't aware of his specific role in PWS in the 80's and 90's. Unbelievable.
I'm a slow learner
Years ago, a former member of the legislature by the name of Jay Hammond ran for governor and was elected. I was pretty hesitant about voting for him because I feared he would be just another dyed-in-the-wool political party puppet. Over the years I realized I was wrong and Jay turned out to be what I consider one of our best Governors ever.
When Parnell came into office, smiling and telling how he would move Alaska forward, I again made the mistake of voting for him. Now, in complete contrast to Hammond, I see I voted for the wrong person.
As a long time registered non-partisan voter, I'm not a good better. I thought one governor was mediocre and found out he was superb, thought another was a good choice, and he seems to have failed.
The next time an election for governor comes around, I'm going to be more careful.