We own Alaska's natural gas, and as owners it is up to us to make sure our gas gets to market. That means demanding performance from those who lease the rights to develop our resources. It means protecting ourselves from a situation where a leaseholder "warehouses" our gas, while selling gas from other places into our markets. It means providing an incentive to perform, and gaining a means to perform if our leaseholders don't.
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Our constitution requires us to manage the resources for the maximum benefit of the people. Alaska is an owner state and our constitution reminds us to act like it.
Last year, Exxon said that it does not intend to develop North Slope gas until after it has developed its Canadian MacKenzie field. Exxon said the state could do nothing about it because they have the leases. Many worry that Exxon might delay until 2020 or 2025 and insist on an "over the top" Beaufort Sea route that avoids jobs for Alaskan workers, value-added opportunities and gas for Alaska's consumers but maximizes Exxon's profits from assets in Canada.
This winter, Exxon again refused to drill an exploratory well on Point Thompson and was held, once again, in default. It will pay a $20 million fine rather than drill a $20 million to $30 million well. This only makes sense if Exxon wants to delay both Point Thompson and an Alaska gas line to develop its Canadian MacKenzie assets first.
No owner would stand for this. We shouldn't either. Our gas is valuable, and we need to encourage production and discourage delay.
The Alaska Gasline Now initiative, which I co-sponsored, now known as Ballot Measure 2, provides an incentive for production rather than delay. Large leases on the North Slope with undeveloped gas reserves would pay an annual reserves tax of three cents per thousand cubic feet. The payments are repealed when a gas line, any gas line, is built, and the leaseholders start getting their money back as a deduction from other gas taxes owed to the state. If the line is built soon, they get all their money back, but if they delay more, it will cost them more.
In effect, the oil companies have to build the line or pay the fine. Either way, Alaska wins.
That is why great Alaskans such as former governors Wally Hickel and Jay Hammond, and Fairbanks Mayor Jim Whitaker sponsored the initiative last year. That is why 47,000 Alaskans signed to place it on the ballot. Oil industry ads that claim these Alaska sponsors or signers didn't know what they were doing are insulting and wrong.
Exxon and the other oil companies are spending hundreds of thousands of dollars to defeat Ballot Measure 2. They want complete freedom to build or delay as they see fit. The total amount they would pay in 2006 is about four days of the profits made in 2005 by the big four leaseholders. Four days.
Alaskans voted in 1958 to be a state not a territory. We had to stand up to powerful Outside corporate interests, such as Seattle canned salmon, to take control of our own destiny.
At the constitutional convention, delegate (and later U.S. Sen.) Bob Bartlett warned of two dangers from letting Outside corporations own or act like they own Alaska's resources. First, they might take our resources without leaving enough for our citizens.
"The second danger," he said, "is that Outside interests, determined to stifle any development in Alaska which might compete with their activities elsewhere, will attempt to acquire great areas of Alaska's public lands in order not to develop them until such time as, in their omnipotence and the pursuance of their own interests, they see fit."
Almost exactly 50 years later, we will decide whether we are a state or an economic colony. It is time for this generation of Alaskans to stand up for our state and a gas line on our terms. Stand with us and vote "Yes."
Rep. Eric Croft, D-Anchorage, is a co-sponsor of Ballot Measure 2.