Compass: Oil production tops Alaska Senate's list

By SEN. CHARLIE HUGGINSJanuary 30, 2013 

On November 6, 2012, Alaskans made their intentions clear-- the gridlock in Juneau must end. There is no more room for indecision at this late hour. The time to act is now. As oil production continues to decline, heating costs rise, and government spending exceeds the ever-shrinking revenue pool, we need leadership. The Senate Majority understands the urgency of the situation and is poised to address the problems facing Alaska. That's why we have established three major goals to accomplish over the next 90 days.

The most pressing issue is the downturn in oil production on the Alaska North Slope. The volume of oil transported through the Trans-Alaska Pipeline System (TAPS) has steadily declined over the past few decades. Whereas 2,100,000 barrels per day were being transported in 1988, fiscal year 2012 saw a mere 579,100 bpd. That's a 71-percent decrease. Moreover, that volume is expected to further reduce to 552,800 and 538,400 in fiscal years 2013 and 2014, respectively. If current policies remain in place, the Department of Revenue expects the decline in oil production to continue at a rate of 5.5 percent per year through the next decade.

Oil revenue is the lifeblood of Alaska. It pays for over 90 percent of the state's unrestricted general fund revenue. Unless we address this problem, we will be forced to reduce spending on roads, schools, and other services vital to the health of our state. Thousands of Alaskan jobs in other industries also depend entirely on the throughput of the oil pipeline. Unless something is done, future generations of Alaskans will have less opportunities and a lower standard of living than we enjoy today.

We cannot allow this to happen. The Senate Majority is resolved to put in place policies that will ensure a sustainable and robust future for Alaskans for generations to come. A Senate Special Committee on TAPS Throughput has been set to investigate the causes of oil production decline and make recommendations to turn the tide. This committee will craft solutions to be taken up by the Senate Resources Committee in early February which will guarantee a prosperous economic future for Alaska.

The Senate Majority is also deeply concerned about in-state energy needs. We will not sit idly by as heating oil and electricity prices continue to rise. Local energy costs have skyrocketed in the past few years, making an in-state solution all the more urgent. That's why we are establishing a Senate Special Committee on In-State Energy to thoroughly investigate what's causing the skyrocketing prices. The committee will pursue opportunities to develop local energy sources that will benefit all Alaskans. It is abundantly clear that families are hurting and something must be done.

Controlling government spending is a top priority for the Senate Majority. As oil production continues to decline, we must be good stewards of the public's funds. The state needs to tighten its belt when necessary, just as any family would in a difficult financial situation. That's why we resolve to keep Alaska's finances sustainable into the future by recognizing that state spending should reflect the reality of our declining revenue. Government spending must be efficient and free from waste, fraud, and abuse, while maintaining important public services for our children and grandchildren.

The people have spoken loud and clear and have put forth a mandate for reform. In response, the Senate Majority will make oil production, energy costs, and controlling government spending its top priorities during the 90-day session. We understand the status quo is far more perilous than to take a bold, new course for Alaska's future. We reject the notion that we must sit back and manage our economic decline and call upon Alaskans to join in the conversation. This is no time to be idle-- this is the time to act.

 

Sen. Charlie Huggins has represented District E in the Mat-Su Valley since 2004 and is currently Senate president.

 

 

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