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Vote ‘yes’ on Proposition 1 SB 21 good for oil companies, not so good for Alaska’s future

Posted: July 2, 2014 - 2:52pm

One of the things I like best about Homer is that friends can disagree and remain friends. A friend of mine wrote last week’s Point of View in support of SB 21, the oil tax give away. It read like a BP press release, full of unsupported statistics and misleading facts. He could not be more wrong.   

First, consider the source. His wife’s family has directly benefited tens of millions of dollars servicing the oil industry. What is good for the 1 percent is good for the fat cats in London and Houston. It is not good for working Alaskans who depend on taxing our oil, located on state lands, to fund our schools, build our roads and pay for our government.   

I am voting “yes” on  Proposition 1, to repeal SB 21, the oil tax give away.  Here are some facts:

The oil industry is spending $10 million to defeat Proposition 1. Don’t be confused by the hype. They are not spending $10 million to defeat Prop 1 because it is revenue neutral. They stand to benefit many billions of dollars under SB 21. 

This money, dollar for dollar, comes out of the pockets of the citizens of Alaska.

The Goldsmith report was financed by an Oil Industry Alliance member. The data used was never audited. The main problem with this report is that it failed to look at different pricing scenarios. The troubles in Iraq have driven up the world price of oil without corresponding benefit to Alaska. My Harvard BA in economics tells me to pay it as much heed as Exxon scientists denying climate change. Garbage in. Garbage out.

Under Alaska’s Clear and Equitable Share (ACES) oil production tax methodology, the state accumulated more than $17 billion in savings. while investing in new schools, roads and other critical infrastructure. This year, with SB 21, the state faces a $2.3 billion cash shortfall, with endless deficits on the horizon, according to the Alaska Department of Revenue. 

In five to seven years, our savings will be gone. There will surely be calls to reinstitute a state income tax followed by attacks on the permanent fund. My friend is asking you to not tax the richest companies in the world and instead tax yourselves because an income tax is inevitable under SB 21.

At no price point does ACES take 90 percent of the profit. This is a lie the “no” coalition keeps repeating but it simply is not true. A marginal tax rate is not the tax rate. ConocoPhillips makes $28 per barrel in profit in Alaska, almost three times higher than profits in the lower 48. BP provides other countries with the same services for 2 percent share of the net profits but gets 28 percent of the net in Alaska. 

One of the biggest lies the “no” cartel is pushing relentlessly is that SB 21 is a jobs bill. It is an anti-jobs bill. Under ACES, oil industry employment increased from 10,850 to 14,150, an increase of 30 percent in seven years.

In our current fiscal shape, Alaska spends every dollar we are making in oil taxes. That money hires our teachers,  pays for infrastructure and funds government.  Every dollar has a multiplier providing more jobs for Alaskans. Under ACES, spending on public works projects provided jobs for an estimated 125,000 Alaskans. As our revenue dries up and our savings are spent — these jobs will be the first to disappear. 

A dollar in tax goes 100 percent to Alaska. A dollar in oil company profit may result in some Alaska investment; or it may not, because there are no guarantees written into SB21. Historically, Alaska has been a huge cash cow funding projects everywhere but here. Conoco recently completed a 555-kilometer gas pipeline and gas liquefication plant in Australia, mostly with profits earned in Alaska. Tokyo Electric and Gas is the market.

What few jobs that may be created will be more than offset by the jobs lost. Anyone who has ever ridden a shared services flight south from Prudhoe Bay knows that oil patch jobs are illusory as half the plane bolts for flights outside, never leaving the Anchorage airport and leaving none of their wages in state.

As the state goes broke, SB 21 will cost us thousands of jobs. Teachers, municipal workers, state workers and construction workers will all lose jobs as the state goes broke. Hire an outside oil worker and fire a teacher or three. How do they spin that as a jobs bill? 

Hundreds of Alaskans donated our time to gather 55,000 signatures to repeal SB 21. I stand with Gary Stevens, Paul Seaton, Vic Fischer, Jack Roderick and the 55,000 people that signed the petition. I am voting “yes” because it is good for Alaska.

Aug. 19 is the vote. Early voting starts Aug. 4. Vote early and vote often. By that I mean get a friend to the polls. If every person who signed the petition gets a friend to the polls, “yes” wins.    

For more information visit “itsouroilalaska.com”.  Get the facts free from oil company spin.

Brad Faulkner worked on the trans-Alaska pipeline as a laborer. He writes: “Over the years I have worked a number of jobs in Prudhoe and Kuparuk. 2012 was my most recent stint, as an oil spill response boat captain supporting Shell Oil. I am not opposed to the oil industry.  I would just like to see Alaska get its Clear and Equitable Share.” 


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jokimball777 07/04/14 - 07:08 am
Why did oil companies declare production costs have doubled?

Whether ACES or SB21 were responsible, Alaska suffered a huge drop in revenue from the oil companies.

As I researched the exact reason for this, I found that the oil companies declared that their productions costs had doubled.

There is no stated reason for production costs increasing this drastically, and there have been no audits of the oil companies since Sean Parnell has been in office.

This would lead anyone who follows Ronald Reagan's 'Trust, but verify' to ask...wait, whaaat?

No audits, just trust the oil companies? The same oil companies caught cheating Alaska in the past?

Is this what Hickel and Hammond did in office, just trust the oil companies to pay what they want for the state's revenue?

What is even more frightening is Parnell and AKleg's plan to use the rest of Alaska's money on a $65 Billion gas pipeline, quite possibly from the permanent fund, but at the very least from any future revenue as the oil companies will overstate the costs to build this pipeline and subtract that from any future revenue to the state.

This would not be the first time that the oil companies inflated their costs to pay less in tax, only the federal government actually caught them. (google- Judge: Oil companies 'cavalierly' wasted hundreds of millions on pipeline work) The state of Alaska did nothing to follow up on this.

The pricetag $65 Billion should raise alarms everywhere. China is planning the world's most expensive pipeline for $30 Billion which goes from Russia through China to India, through the himalayas.

Like Bankers with the bailout, these Big Oil Fat Cats just wanted to pick a really big number to pad their bank accounts and further the rapid looting of Alaska.

If anyone trusts Parnell and these Bill Allen leftovers in the Alaska legislature to write a fair bill for oil taxes, or trust them to make deals with a future gas pipeline....you just haven't been paying attention.

If you had watched the legislative session, how they labored over education spending during their self created deficit spending, meanwhile giving unneeded money for the Knik Bridge (hello Veco?), the U-med road no one in the district wants, a new $250 million coal plant for Fairbanks where they already have trouble breathing in the winter

Why now of all times do we need a road out of Juneau? (which really leads to a gold mine and a new planned Ferry Terminal even as the legislature cut funding to the Ferry system)

These people are not trying to help the state. They are attempting to loot the state as fast as possible because the think everyone is too stupid to pay attention to what they are doing until it is too late.

Well, are we? Are we too stupid to pay attention to what these criminals are doing to our state? Are we too busy and too self centered to protect Alaska's great wealth and resources for future generations?

Whether you believe facts, or have faith in oil companies and oil lobbyist governors...it is time for all Alaskans to pay attention to how we vote.

In 2004, 16 out of 40 districts had 200% voter turnout. Looks like something went wrong with the diebold accuvote counters, or perhaps the vote count was changed as it was sent through the diebold central tabulators. Under complaint, the state was forced to admit the numbers might have been changed by some unknown person using the password 'password' and nothing has been fixed(in the voting process) since then. (google-Bradblog or Shannyn Moore 'Alaska elections')

If Alaskans want to make sure their vote is counted accurately in such an important election, both August and November, we must demand that our paper ballots are hand counted at the precinct before they are put through diebold accuvote counting machines. The totals need to be posted at the precinct level before they are put through the diebold tabulator so that they can be verified in the event of another 200% voter turnout.

After all, what is the point of this debate or voting at all, if they will cheat? If they can cheat, they will, and Alaska's voting system is all set up for it. Pay someone $100,000 to hack a computer to make billions, what would you do if you were them (remember $$ is their only God/no morals whatsoever)

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