A big fight is going on in Juneau, and it's coming to a head. The stockholders of three of the world's largest oil companies are trying to take money away from Alaskan citizens. So far, the Governor and the House have helped the oil companies. On Monday, twenty members of the Alaska Senate will have to decide whose side they are on.
This takeaway/giveaway is Senate Bill 21, masquerading as an inducement for future development of Alaska oil resources. Nobody supporting the takeaway/giveaway even pretends any actual development by the oil companies is required. The oil companies don't have to do anything to take $1 billion a year away from Alaskans. Nothing. Nada. Zero. Cutting to the chase, SB 21 is the reality of billions of tax breaks married to the pipe dream of an unidentified future bliss, if not marriage or a kiss, then possibly holding hands. It is, as Sen. Kevin Meyer acknowledged last Friday, simply "a crapshoot." And gambling with Alaska's future is something we should never do.
Revenue's fiscal note calculates, without increased oil production, SB 21 will transfer more than $5 billion over the next five years alone from Alaskans to the stockholders of these oil companies.
Obviously, it embarrasses the supporters of SB 21 to defend the takeaway/giveaway. Sen. Pete Kelly has spoken the real truth. SB 21 is simply a Grover Norquist effort to cut spending, hamstring government and then eventually kill it. I've known Sen. Kelly and his brother Mike since Mike and I were on the University of Alaska Board of Regents and Pete was a lobbyist for our university -- doing a fine job helping Mark Hamilton and Wendy Redman get more money out of the Legislature. A few days ago, Sen. Kelly acknowledged that Alaska is spending too much money. He and Mike were always candid. As much as I respect his candor, the policy of giving away billions, without getting a concrete commitment in return, is a disaster.
While I served in the Legislature between 1969 and 1978, every significant piece of oil legislation was considered in one form or another - from complete state ownership of the pipeline, to royalty bidding, right of way leasing, ad valorem taxation, severance taxation, cents per barrel and separate accounting income taxation. In the 1970s, we all wanted to get Alaska's fair share while insuring the development of Alaska's great resources. Even so, no one suggested we simply give money to the oil companies and merely hope they do something good with it.
The three oil companies did not like separate accounting either. That's the system by which the state taxes the companies based on their Alaska earnings, rather than by a formula that includes their worldwide income, dilutes their Alaska take and thus cuts their tax obligation. Jay Hammond said that allowing the repeal of separate accounting in 1981 was his biggest mistake as governor. Alaska has lost tens of billions since then, and oil company stockholders laughed all the way to the bank.
In 1975-76 I was Senate president. We knew non-renewable resources would run out but Alaska's needs would not, so we created the Alaska Permanent Fund. If Sen. Kelly is correct that we do not need the money now, and the companies won't commit to using the money for Alaska's benefit, I suggest we store excess revenue in the Permanent Fund. That way, it will be available to Alaskans at the point it's needed in the future.
The stockholders may not like that, but the citizens of Alaska will and that's what's important. After all, we are not buying love, we are selling oil.
Chancy Croft is a former state senator and Democratic candidate for governor. He lives in Anchorage.