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Juneau questions SB21 experts

More than 100 residents attend Q&A

Posted: July 15, 2014 - 12:02am
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Juneau Attorney Lisa Weissler, right, listens to Bill Corbus make his argument for keeping the new oil tax law, SB21, during a four-person panel debate at the Mendenhall Valley Public Library on Monday.   Michael Penn | Juneau Empire
Michael Penn | Juneau Empire
Juneau Attorney Lisa Weissler, right, listens to Bill Corbus make his argument for keeping the new oil tax law, SB21, during a four-person panel debate at the Mendenhall Valley Public Library on Monday.

More than 100 Juneau residents filled the Mendenhall Valley Public Library Monday evening for a question and answer session with four state leaders on the oil tax referendum voters will decide on next month.

Proponents of the “Yes” side — those who oppose SB21, and therefore are voting “yes” to repeal it — included democratic Rep. Les Gara of Anchorage and Lisa Weissler, a Juneau attorney specializing in oil, gas and mining law. They faced off against former Alaska Electric Light & Power president Bill Corbus and Jim Clark, the chief-of-staff under Gov. Frank Murkowski’s administration.

During the first hour, the forum was dedicated to prepared questions, such as, “What happens if Alaskans vote to repeal SB21? Does the state go back to the old system, or what?”

“Voting ‘Yes’ will put ACES back in place, and I believe we’ll go back then and write a smarter law that takes the best of everything we can find but doesn’t give away the farm,” Gara said, adding that the Democrat-backed proposal focuses on providing financing for smaller independent oil companies hoping to get involved with North Slope oil.

Advocating for a reform to the oil tax law that only granted tax credits on investment in Alaska, Gara said repealing SB21 now will give Alaskans a better product in the near future that includes strengths from both sides of the debate.

Clark emphasized that SB21 will need to be tweaked as time goes on — saying Alaskans should “mend, not end” — and Corbus agreed, saying this tax structure is good for Alaska over the “mid-to-long term.”

“If we go back to ACES, the industry is going to take that as a sign that Alaska is not a good place to do business,” Corbus said, explaining that the industry’s projected investment figures rose by about 33 percent as a result of SB21 becoming law.

“I would expect the industry would back off those figures, and that we would be looking at less investment in Alaska and you’d see us return to the decline that we’ve observed in oil production over the last six years — maybe accelerating,” he added.

A contentious debate arose between Gara and Clark over one of the staples in SB21 — the base production tax rate. Put simply, Clark says it’s 35 percent; Gara says that is only true if the price of oil hits $160 a barrel.

A section in the law identifies that number as 35 percent after listing a series of exceptions to that rule, but Gara points to an oft-cited report from May by Scott Goldsmith that includes a chart that indicates the “effective tax rates” only hit 35 percent when oil approaches the $160 threshold. According to the chart, the effective rate at approximately $110 a barrel is around 27 percent.

Clark defended the prospect of lower tax rates for larger quantities of oil as an economic positive for the state’s revenue stream.

“With that much oil...all we need is an increase of 2-to-4 percent, and that increase — even at lower tax rates — will produce more total revenue for the state than going to ACES’ asymmetrical tax system and hoping that the wars in the Middle East continue so that the price of oil goes up and we can recover,” Clark said.

Alaskans will determine the fate of SB21 at the polls on Aug. 19.

• Contact reporter Matt Woolbright at 523-2243 or at matthew.woolbright@juneauempire.com. Follow him on Twitter at https://twitter.com/reportermatt.

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Bill Burk
12630
Points
Bill Burk 07/15/14 - 08:52 am
8
6
SB21

SB21 needs to be repealed! I is probable one of the worst to come out of the Parnell administration

James Coleman
2072
Points
James Coleman 07/15/14 - 03:53 pm
4
8
Something wrong here

Since when do Democrats want to promote increased oil production? Provide financing to small upstart oil companies? I'm not believing this at all. What happens when McCarthy from the EPA comes up here and starts "looking around" again. She'll put a quick stop to that. "Mend, not end" is the way. It's what the Demos are doing with Obamacare, why not SB21?

Bill Burk
12630
Points
Bill Burk 07/15/14 - 05:06 pm
5
3
SB21

SB21 is BAD for our state. It is being proven by Parnell Not holding the Koch Brothers responsible for the oil spill that they left. The state is cleaning it up. If SB21 is NOT repealed there will be more spills that are left for us to clean up.

Karl Ashenbrenner
2871
Points
Karl Ashenbrenner 07/15/14 - 08:28 pm
7
3
ACES

incentivized small oil companies to explore and produce. SB21 has locked them out. What is so difficult to understand about that.

MATHEW MULLIGAN
523
Points
MATHEW MULLIGAN 07/20/14 - 04:07 pm
4
2
Greed

The Chairman of Conoco-Phillips James J. Mulva just retired in June and was given $260 milllion in severance on top of his $16 million in annual compensation. If these companies can pay that much money they obviously don't need more. It's just shameless unjustifiable greed. SB 21 takes money out of the pockets of every Alaskan and gives it to people like Mulva. Pampering the very rich is the core principal of the Republican party.

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