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Republicans at a House majority caucus press conference Friday morning cited energy production, including measures to revive the decline in oil flowing through the trans-Alaska pipeline system, as a top issue for the caucus during this legislative session, with one representative expressing confidence that a bill to cut oil production taxes will pass this spring.
Rep. Eric Feige, R-Chickaloon, noted that many freshman legislators campaigned on reducing oil taxes “as a means to spur on the Alaskan economy.”
“I can tell you the mood in this building is considerably different than it was last year,” Feige said. “I have no doubt that we will pass, as a Legislature … an oil tax bill. Our job right now is to make sure that bill is a good deal for Alaska, make sure that bill does what we want it to do.”
Rep. Mike Hawker, R-Anchorage, remarked, “I think we all see this legislative session being dominated by issues of energy security and energy solutions across our state.”
Feige is the co-chairman of the House Resources Committee. He said his committee will take up House Bill 72 — Republican Gov. Sean Parnell’s proposal to reform the oil production tax regime by eliminating progressivity from the tax, along with certain tax credits, and introduce a “gross revenue exclusion” to exempt a portion of new oil production from taxation — on Feb. 11.
The Senate Special Committee on Trans-Alaska Pipeline System Throughput will also hold public hearings next week on the bill.
Parnell offered another bill to cut oil taxes last year as House Bill 110. While the Alaska House of Representatives approved the bill, it met heavy opposition in the Senate, and the governor ultimately pulled the bill from consideration amidst an acrimonious special session.
Feige compared Parnell’s latest offering to last year’s doomed proposal.
“The intellectual underpinnings behind what has gone into producing House Bill 72 are way ahead of where it was under House Bill 110,” said Feige. “These guys have put an awful lot of work into it.”
Feige and House Majority Leader Lance Pruitt, R-Anchorage, agreed that the 28th Legislature — which, as Feige pointed out, features three-quarters majorities in both the House and Senate, giving Republicans and the handful of Democrats who caucus with the majority in both chambers a legislative supermajority — may be more conducive to the idea of oil tax cuts than its predecessor.
“Perhaps in the last Legislature, there was more concern that we would somehow be hurting the state by reducing the revenues to the state government,” Feige said. “It’s not about the revenues to state government, it’s about the economy of the state of Alaska, and the oil industry is certainly a centerpiece of that economy.”
“I think you’ve got a group of people here who are tired of seeing decline,” Pruitt added. “I think it’s important that you’ve got a group of people here who recognize that if we don’t do something, then we’re going to be in a world of hurt. And we need to make some change. I think that’s what’s important to recognize, that you’ve got a group of people that are ready to see a lasting reform.”
Hawker said majority legislators want to be “making sure that our tax regime is as fair as possible to all sectors within our oil and gas sector — those that are just explorers, those that operate the legacy fields and those that are putting a lot of money into the satellite and more challenged developments right now.”
Asked about several bills that have been filed in the House on gun rights, including legislation introduced by House Speaker Mike Chenault, R-Nikiski, that would prevent federal officials from enforcing federal gun control regulations in Alaska, Pruitt indicated he sees the issue of guns as a lower priority than passing oil tax reform and a budget for fiscal year 2014.
“I think one of the things that’s been important to both members of our caucus as well as Alaskans is to maintain that Second Amendment right, and I think you’ll find that we will do whatever we can to defend that right, but I don’t think that you’ll find that it’s something that we’re looking at as if we don’t pass that, we will feel that we failed when we came out of the end of the session,” Pruitt said.
Pruitt reiterated that he is willing to work with both Parnell and Democrats in the minority on oil tax reform.
“Everyone is going to be a part of the conversation,” said Pruitt.
Hawker added, “I’m certainly looking forward to working with Rep. Feige (and) all members of this body that want to come to the table and productively discuss the way forward.”
The office of House Minority Leader Beth Kerttula, D-Juneau, was represented at the press conference by a Democratic staffer.
Kerttula said after the meeting that she is encouraged by House Republicans’ expressed willingness to work with the minority.
“I want to work with anybody who wants to make it more accessible to new entrants, to actually get production in the line and to have a fair share for Alaskans,” said Kerttula. “So I think that’s a good sign.”
Some members of the minority — including Kerttula, who referred to Parnell’s proposal Friday as “the worst giveaway yet” — have used harsh language to criticize Republicans’ positions on the oil tax issue.
“Maybe my tone of voice could be calmer when I talk about it,” Kerttula allowed, though she stood by Democrats’ negative characterizations of H.B. 72. She added, “I guess I get impassioned. But it’s not rhetoric. It’s a fact that that’s what will happen. Does that make it harder to work with Republicans? I don’t believe so, but I think that you’ve got to focus on what the issues are and you’ve got to get that information out.”
Asked whether she is hopeful that a compromise can be reached, Kerttula said she is.
“I’m always hopeful,” Kerttula said, laughing. “I mean, I’m the first one to put my hand out and say, ‘How can we make this work?’ But that’s the attitude of my caucus. You know, we’re going to be strong and say what the truth of it is, but we’re also going to be working as hard as we can to save something good for Alaskans. But I’m not going to bend my values to do that.”
• Contact reporter Mark D. Miller at 586-1821 or at mark.d.miller@juneauempire.com.
Comments (11)
Add commentMaybe I am mistaken
In all of these discussions I keep hearing the term "taxes" on oil. I understand that if someone is selling milk, gas, food or whatever and have the products to sell, and the government says "well you have the product, but we are going to tax what you sell."
In Alaska, we own the oil, it is our natural resource, it is not some product that belongs to the oil companies or anyone else that is being "taxed." It is simply that we have a resource and we are negotiating with those who wish to purchase it and profit from it what price we will require.
It becomes very complicated when the value of a barrel of oil can vary from $30 to $60 to $120+ or more. Then there is oil that is much more difficult to extract from the ground, or is "heavy" and costs more to transport. Then there is the international market and the price oil companies get for the oil they have obtained, or our oil that they will refine and sell on the retail market.
Anyone who produces products has to consider the price for which they will sell their product, including costs of acquisition, the market or potential for resale purchases have.
If a person is a fisherman, catching and selling fish, a farmer selling eggs or wheat, a person offering a tourist experience, they are just selling what they have at the best possible price they can get.
Yes, in Alaska, oil companies buy "leases" to control land that they might use to exploit the resources below the surface. But that is to assure them that others cannot use those lands. Once they begin to extract the oil from deep below, they are simply paying so much for the product they are extracting.
I wish that people would avoid using the the term "taxes" on oil as if it belongs to someone else. We are not taxing something that belongs to others, we are simply saying "This the the price we are asking for our product." If it is too high, if adjustments have to be made to the price because of the costs of extraction, or the world market, fine.But please don't call it "taxes" simply because the money is paid to a state government who represents the owners of the resource oil and assume that any money paid to a representative government is a "tax".... no, they are just collecting the money for which we as Alaskans are selling our natural resource whether it is fish, timber or oil.
I'm with you, Wally
The other important thing to note is that if we were selling fish or eggs or wheat, as long as we managed a sustained yield, there'd be new fish and eggs and wheat next year. Not so with oil.
Once the oil companies suck up what's there, it's gone forever. The more attractive we make it for the oil companies to deplete, the faster we reach that zero-point.
I'd rather see an Alaska-owned oil company on the scene - then their business decisions would be made with Alaska's interests in mind rather than CEOs in London and Houston, and deep-pocketed shareholders. And the profits would return to Alaska.
The day the oil runs out is approaching. Alaska will look very different when that happens. All I see the republicans doing is rushing pell-mell toward that cliff, with no plan for beyond it.
Latitude 58
Yes, the Russians really came here to get sea otter pelts and furs from other animals, and nearly wiped out the sea otter population
Then, in the mid-nineteenth century came the whalers and again nearly killed off the whale and walrus population.
Then came the big fisheries corporations to take as many salmon as they could with the least cost.
Then came the timber industry to take as much old-growth forest as they could. Now we have an oil industry.
As Prof. Steve Haycox describes Alaska, it has been and seems to continue to be "An American Colony," in which outsiders come here to make as much profit as possible and then leave.
Fortunately, the sea otters, whales and salmon were not exterminated. Now, of course, some complain that those pesky sea otters after years are hurting profitable other fisheries, and maybe there has to be some correction there.
But once the oil is gone, we may again be in a situation where those who came to make profit, leave along with all those who came with them.
Hopefully, like the salmon, whales and sea otters, Alaskans will not become nearly extinct. There will be future generations of Alaskans, just as there will be future generations of outsiders who look at Alaska as a "resource" from which they can profit, and then leave.
As resident Alaskans we have to stand up and make sure that if we benefit from outsiders coming here, our most important resource is the coming generations. We have to pass on to them as much of the resources we have and the benefits we, as Alaskans have saved from earlier exploitation of our resources.
Oil is a non-renewable resource. Once it is gone, it is gone forever. We have to do better than simply tell the coming generations of Alaskans - "Sorry kids,we agreed to take all the oil for ourselves and the oil corporations, and leave you nothing. Tough break, but we just sold what should have been your inheritance as Alaskans."
In other words...
...what I hear Reps Feige and Pruitt saying is: "Break out the rubber stamps!"
We're witnessing the culmination
of a couple years of political maneuvering, with only a few minor casualties, that has effectively produced the best state government money can buy: The damage from things like the VECO scandals is about to be completely erased, at a very critical time for the oil industry---Something that has been replicated in one form or other in the legislatures of several oil-producing states.
Ironic in the information age, and a real test for the electorate: Will we permit the largely unchecked flow of wealth from the Commons into the hands of multinational corporations from non-renewable mineral resources, without at least some of it being used to develop more sustainable economic development---Value-added industries based on well-managed renewable resources, a so-called green manufacturing sector, or even the basic tools to bring about the implementation of a economy deeper than resource-extraction: Enhanced public education, a more developed infra-structure that doesn't impact renewable resources, and robust public-sector institutions that would support real opportunities in a post-oil economy?
Instead I see a call to tighten our belts, a continued denuding of public education, environmental oversight, and of course public pensions ("But the pension fund was just SITTING there...").
What's the pay-off? Jobs? What are laborers going to do with those jobs without good educational opportunities, good infra-structure, and an economy more sustainable than resource extraction? Move elsewhere? I've heard that one before.
What are we going to do when our TV's tell us that environmentalists are to blame for the degradation of our clean water resources, that public sector unions are to blame for a defunct public education system, and that poor representation is to blame for the fact that there's no mineral wealth left in the bank?
We're already being spoon-fed some of that garbage, and it's about to start sticking in our throats...
“I think you’ve got a group
“I think you’ve got a group of people here who are tired of seeing decline,” Pruitt added. “I think it’s important that you’ve got a group of people here who recognize that if we don’t do something, then we’re going to be in a world of hurt". Feige and Pruitt,..are you denying that these companies have been "harvesting" Alaskan oil? Do you two know what that means? Do you know what extortion is? Newly elected Micciche said, representing Alaskans, "We`re in the oil business". OK We`ll buy that Micciche. Now how do we recoup the 20 billion plus interest over ten years? How do we replace that lost fiscal income? Shouldn`t you be discussing THAT??? before studying the merits of destroying our state oil taxing system completely,..again,..(so they can start the [filtered word]-cycle about how we`re always "changing the tax rates" on them). Feige and Pruitt?? Those two are full of themselves, and are playing us like a cheap fiddle, as they work against Alaska` interests, for the benefit of a cartel on the slope, run by the largest corporation in the bloody world! (Exxon just beat out Apple as the largest company.)
"the mood in this building is
"the mood in this building is considerably different than it was last year"
Alaskans will take care of that in 2014
But this time...
...don't stop with the Legislature. Follow the corruption all the way up.
More Production?
This tax cut will not lead to one more barrel of oil being produced. The law of supply and demand world-wide will decide which fields are profitable and worth developing. The billion dollar per year gift to the oil companies is chump change to them. It just means oil executives will be able to buy even bigger private jets, larger mansions and more luxurious yachts. This is typical Republican policy- take from the needy and give to the greedy. But don't blame them-blame all the middle and working class fools who vote Republican. If Democrats were in charge this wouldn't happen.
....
@glasseye You had me until you got to the delusion of a democratic utopia. How about taxes and work for the people. If a oil company can't manage. Then the state should do it themselves(I suppose that would require to much work from our public servants????).
Vote for the Democrats folks
Vote for the Democrats folks its the only way.
its
time for congress to look into this before the horses run free with Alaskan's money!! The american public and Alaskans were told we have 200 years of oil on those leases and gas would be $.25 a gallon here in Ak and that we would have refineries, jobs, blah, blah. All lies. I have a Dad that built it and a brother who helped engineered it. This giveaway is BS. I like the idea of new entrants? void the leases and let new oil companies come in under ACES. Sad Alaskans are not the major share holders interest here.