Alaska Editorials

May 4, 2012 

Here is a sampling of editorial opinions from Alaska newspapers:

May 4, 2012:

Peninsula Clarion: Hurry up and slow down

When angry, count to 10. When very angry, count to 100 - and if you're stuck in summer construction traffic, take a deep breath and keep counting.

Alaska has two seasons as the saying goes - winter and construction - and with winter just about over, that means construction season is under way. Projects are in the works for the Seward and Sterling highways as well as other borough roads this summer, and with more visitors soon to be on their way, travel on the Kenai Peninsula this summer may at times be an exercise in frustration.

We've said it before, but it bears repeating: Slow down, pay attention, especially in construction zones. Arriving at your destination late and frustrated is better than not arriving at all.

According to the state Department of Transportation and Public Facilities, there were four accidents in construction zones on the Kenai Peninsula last year. Statewide, an average of 80 work zone accidents are reported each year.

Doug Schoessler, the borough's road service area director, reminds motorists to drive with caution where road work is under way.

"When (drivers) spot any workers out, slow down," he told the Clarion. "It's similar to speeding in a school zone where there are kids at risk."

There's never a convenient time for road construction. Indeed, in Alaska, much of the work has to be done at the most inconvenient of times. But cautious, courteous behavior in construction zones will allow workers to focus on their jobs and, hopefully, complete them that much faster.

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May 2, 2012:

Alaska Journal of Commerce: Ire over profits another sign of an unserious debate

In the days before Gov. Sean Parnell abruptly pulled oil tax reform legislation from the special session he'd called barely a week earlier, the Big News of the week was the April 23 earnings report from ConocoPhillips.

ConocoPhillips - the only one of the North Slope producers that reveals the results of its Alaska operations - reported $616 million in profits for the first quarter of 2012.

Opponents of Parnell's plan to slow the rate of decline in Alaska's aging Slope fields through lower production taxes leapt on the report as proof that oil companies are doing just fine without it.

It "blows a hole" in Parnell's argument to lower production taxes, said Sen. Bill Wielechowski, D-Anchorage.

So ConocoPhillips made $7 million per day in Alaska in the first three months of the year.

So what?

During the second quarter of 2010, ConocoPhillips made $381 million from its Alaska operations, or about $4 million per day.

Is that OK? Still too much, or just right? What would it prove if ConocoPhillips was making $5 million per day, or $8 million? If the company can make it on $7 million per day, surely it can make it on $6 million. Perhaps legislation is in order to raise taxes further.

That self-appointed arbiters of What's Fair in the legislature and the media are still obsessing over Big Oil profits in the name of cheap sound bites and easy headlines in the second year of this debate shows a fundamental unseriousness about what the discussion should be about.

(It's also more than a little inconsistent that the legislature has no qualms about subsidizing a multi-national like Repsol with exploration credits while politicos like Wielechowski make hay out of the ConocoPhillips profits that pay for them.)

The issue isn't about how the state can best maximize its take at high oil prices or how much profit is enough in a volatile global market, and it shouldn't be about atoning for real and perceived past sins of politicians and producers.

A tax structure that is confiscatory, punitive, or both, is quite simply a terrible basis for public policy.

The state should want ConocoPhillips to be highly profitable. The legislature should want the state to be the most profitable, best place in the world to do business. That can be done without handing over state sovereignty, and without creating a system where producers can benefit more from increasing their upstream costs by $1 than they do from a $1 increase in the price of oil.

Instead, we've heard time and again that Alaska's oil taxes aren't nearly as bad as Parnell and the companies have argued, and that the state actually ranks somewhere in the middle among oil-producing jurisdictions in terms of government take.

In a state where 90 percent of the budget is funded by oil, the goal of our leaders should not be to just have a middling to decent tax climate for producers. The goal should be to have the very best, and nobody, not even Parnell's most vociferous critics, have asserted that Alaska is at the top of any rankings when it comes to oil tax policy.

It is beyond bizarre to witness the spectacle of ConocoPhillips executives being called to the dock and shamed by state legislators for the sin of earning $13 million per day for the state and feds in tax revenue.

Yes, the state and feds take $2 for every $1 ConocoPhillips makes.

You don't have to be an overpaid Big Oil honcho, or even a modest business owner to recognize the inherent lack of incentive when growing your operation brings far more tax liability than it does return on investment.

Setting aside the oil issue, it has been demonstrated time and again that individuals and businesses respond to tax policy. It's a part of human nature that the legislature itself recognizes by serving up tax credit after tax credit and touting their effects on attracting film producers and independent explorers to the state.

On the other hand, the most consistent effect that flows from high taxes is tax avoidance. If the U.S. didn't have the highest corporate tax rate in the world, it wouldn't have so many companies parking their profits offshore.

(And it's hard to blame them when the U.S. government blows billions of tax dollars collected from productive companies like ConocoPhillips on "green jobs" fiascos like Solyndra.)

Critics of tax reform can point to a large number from an earnings report to advance their position if they wish, but it is precisely that upside from periods of high prices that fund the investments necessary to stem the production decline on the North Slope.

Taking away that upside is one of the reasons a 2011 Department of Interior report ranked Alaska's onshore regime dead last in North America from an investor perspective and next-to-last between Venezuela and Russia globally.

The blessing of Alaska's wealth of natural riches is a whim of nature. The technology, expertise and capital necessary to extract it are not.

Many in Alaska are excited about Shell finally getting the go-ahead to explore in the Arctic this summer. The company has spent more than $4 billion between leases and two false starts that halted plans in 2007 and 2010 without, to date, sinking a single well into the areas it purchased more than half a decade ago.

In the magic bean theory of economics, Shell must have found that $4 billion stuffed between some couch cushions by of one of its executives looking for a fresh $100 to light a stogie wrapped in a page from a Gutenberg bible.

Or, more likely, Shell had to risk billions to earn that money as profit somewhere else so the company could spend it in Alaska.

House Bill 110 may have gone too far in lowering tax rates without encouraging new investments. The governor's special session legislation may have been "half-baked" as one of his own allies described it. None are blameless.

But the Senate, with a mega-majority of 16 out of 20, couldn't even come up with a plan after more than a year of harping over what was wrong with everybody else's. It's pretty easy to criticize someone else's plan when you don't have to defend your own.

In the end, the state still lacks a comprehensive plan for increasing production and is still on the magic bean program hoping prices stay high or that companies will invest billions to benefit ballooning state budgets, unfunded pensions and the legislators who dole out the windfall.

The Senate wants to look everywhere else for blame. Its members should try looking in a mirror.

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