Gov. Sean Parnell has fired back at Sen. Bert Stedman following his address to the Juneau Chamber of Commerce last week in which Stedman accused oil tax cut advocates — without naming Parnell — of playing fast and loose with the facts.
Stedman, R-Sitka, cited claims, since disproven, that North Slope oil jobs were down and the trans-Alaska pipeline faces imminent closure.
Parnell, in a letter to Stedman, said the influential senator “distracted the audience from the issue at hand, that of incentivizing new and significant production.”
Parnell’s letter was dated last Friday, following Thursday’s chamber meeting, and provided to the Empire over the weekend.
Parnell and Stedman continued the ongoing dispute over North Slope jobs, which began with tax cut advocates saying Alaska’s Clear and Equitable Share, or ACES, oil tax was resulting in many job losses.
The loss of jobs was the focus of an industry advertising campaign last session, and was cited repeatedly by members of the House of Representatives as justification for passing the tax cut Parnell proposed.
Parnell’s letter said Stedman, who told the Chamber the job loss claims were not true, was “justifying some senators’ plan to do nothing.”
He said Stedman failed to tell the Chamber audience the increased jobs would be in maintenance, and not in developing new production.
Parnell also took issue with Stedman’s complaint about tax cut advocates pointing to the state’s high marginal tax rates, when tax credits and deductions brought the effective tax rate much lower.
“As a financial services industry professional, you know the difference between a marginal tax rate, and an effective tax rate, yet you complain about the use of one over the other.
As evidence oil taxes in Alaska are high, Parnell pointed to new production online in North Dakota and Texas, but not in Alaska.
“No one can dispute that at high oil prices, government take in Alaska is higher than our nearest competitors,” Parnell wrote.
Parnell’s letter also again brought up the fear of the trans-Alaska pipeline system closing down at some point if and when production dips below 300,000 barrels per day, despite evidence the companies that own it expect it to operate at 100,000 barrels per day or lower.
Stedman criticized those who had stoked fears of TAPS closing down, but had not named Parnell there. The criticisms seemed aimed more at Reps. Mike Hawker, Eric Feige and Cathy Muñoz, as each had suggested the pipeline would close in a decade unless the governor’s tax cut bill passed.
“You will recall in my State of the State address where I said we should not be arguing over whether the pipeline will shut down at 300,000 barrels a day or 100,000 barrels a day,” Parnell said. “Instead we should be trying to arrest oil production decline and bring on new production.”
Parnell also took issue with Stedman’s dismissal of his claim his tax cuts would get the state back to 1 million barrels of production a day.
Stedman, in his speech, said, “It’s a good bumper sticker, but you are not going to get there.”
Parnell maintained they would.
“I am surprised you have so little confidence in Alaska’s vast resources locked in the ground and in the ingenuity of Alaskans to access our resources through hard work. Surely your intentions are better than those reported,” he said.
Members of Parnell’s administration and oil company representatives have told the Legislature they don’t believe state lands covered by the ACES tax can provide 1 million barrels of production.
Reaching that goal will require offshore and federal lands, which are not taxed by the state, they said.
Parnell in the letter also criticized Senate Bill 192, which he said would lower oil taxes, but not by enough to spur new development. That’s the real giveaway, he said.
• Contact reporter Pat Forgey at 523-2250 or at email@example.com.