An article entitled “Scope of multi-billion dollar Alaska gas line project hits home” was recently published in the Anchorage Daily News. Aside from being a rather indefinite and overly general story about a range of cost projections and a desirable timeline for building the pipeline, one of the most significant and striking things mentioned in the article was this comment by an Exxon spokesman: “A development of this scope and magnitude must be accompanied by a stable, healthy oil business underpinned by competitive gas fiscal terms” and the agreement by BP and Conoco-Phillips that “they also want new fiscal terms.”
This is clearly code by the Big Three for their insistence that we either lower taxes on current oil production and play by their rules, or they will pick up their marbles and go home. Once again, because of our near-total dependency on the petroleum industry, the state of Alaska, its residents and our need for a new source of future revenue is being held hostage by the Bully Big Three for more favorable terms on taxation and “stable fiscal terms.”
They know it and we know it that the long-hoped-for Alaska gas pipeline and export LNG plant will never be built without them and we can expect Exxon, BP and Conoco-Phillips to take full advantage of that leverage and use it to further corporate goals and enhance shareholder profits. Understanding this certain fact, it is the State’s challenge to find a fair and equitable balance in negotiating the terms of agreement on taxation and fiscal terms without completely caving in to demands by the oil industry and allowing them to dictate the terms and thereby control our economic destiny.
Unlike what the Parnell administration has attempted to do for the past two years — and the State House has acquiesced to — we must never negotiate out of desperation or from a position of weakness. The state still appears to be following that same subordinate tact in their pursuit of building the gas line.
We should all be thankful for the bipartisan Senate coalition which thus far has had the wisdom and vision to see through the smoke-and-mirrors of all the advertising and PR blitz spent by the petroleum industry to promote their position. Despite enormous political pressure to tow the line, Sens. Gary Stevens, Bert Steadman, Hollis French, Bill Wielechowski, Lesil McGuire, Johnny Ellis, Tom Wagoner, Linda Menard, Lyman Hoffman and others from the Senate Working Group have demonstrated flexibility and good sense in working toward a solution which will allow the industry to make a reasonable return on investment while still serving the best long-term interests of all Alaskans. They are to be commended for their integrity and for showing courage to stand firm of an issue of such vital importance and huge potential consequences.
Where do we go from here? The state and our elected representatives must take a more thoughtful and deliberative approach in negotiating the terms of taxation on the oil industry — one that is based on objective information and hard facts, not conjecture, supposition and scare tactics.
To be sure, the State needs to have a partnership with the oil and gas industry, but such a partnership must be built on a foundation of trust and structured for mutual benefits, not dictated by one side or the other making veiled threats and unreasonable demands like we’ve seen in recent statements from the oil companies.
Those tactics only serve to stiffen the resolve by Alaskans to stand up for our rights, our natural resources and our future. These rights must never be subordinated and our future must never be held hostage by or entrusted to the goodwill of corporate interests. Please share your thoughts and concerns with our elected representatives and implore them to put the best interests of Alaska first and ahead of any possible personal or political gains.
Joe Brunner retired from the FAA where he worked 35 years as an electronics systems specialist. He has lived in Homer for 40 years. He also is a current permit holder and has worked in the Lower Cook Inlet salmon and herring purse seine fisheries for two decades.