Alaska is on the cusp of another historic mistake with the signing governor's oil wealth giveaway--a much bigger mistake than the Seward grain terminal or the Anchorage fish plant. In fact, Alaskans stand to lose more in a month than we lost for those two projects combined.
The giveaway's own backers call it a "gamble" and a "crapshoot," and the Legislative Finance Division says it will put the state in the hole $1.7 billion dollars next year alone. Worse yet, the governor told Alaskans last month that he expects us to front about a billion dollars for this gamble next year with cuts to schools, roads, and public safety. The other $700 million he'll take from our hard-won savings.
You would never take your kids' college fund to Vegas, but that's what the governor is doing to Alaska with this gamble of a giveaway.
We cannot let this stand.
The Alaska constitution requires the state to manage its natural resources "for the maximum benefit of its people." Telling Alaskans to sacrifice a generation of children to overstuffed classrooms or to spend thousands of dollars in vehicle repairs from driving on crumbling highways is far from providing for the maximum benefit of the people.
I was lucky enough to grow up here, graduated high school in 1974 during construction of the pipeline, and like many of you, I remember the cash people were making and the economic boom that rocketed across the state. We all want the benefits from that pipeline to last, and we know there's plenty of oil in the ground and plenty of people who want to buy it. But giving it away to the richest corporations in the world for nothing in return is not the way to do it.
The only guarantee in the governor's giveaway is that the state will lose billions of dollars. A former Department of Revenue official from the Murkowski administration has said this giveaway "just simply doesn't pencil out."
It is a fact that there is not one thing in this bill that is a guarantee to Alaskans for new production or new investment. It removes the incentives in current law to re-invest in Alaska, and it has no requirement for companies to produce more oil, create more jobs, or invest more in Alaska to get the extra cash from our oil.
To me, that is a scandalous situation. Even a simple contract must have a mutual benefit for both sides. Giveaway backers refused to include any side bars, time limits, production benchmarks, or Alaska investment requirements in the bill. SB21 is a giveaway pure and simple.
Alaska has a history of outside industries taking our resources and the wealth they afford out of our state. First it was our furs, then our gold and copper. We rallied to create our state to stop it from happening with our fish, and now we must rally to stop it from happening with our oil.
The governor's oil wealth giveaway gives billions of dollars to the oil industry and guarantees nothing in return. It's a gamble that puts Alaska's future on the line when the industry has told us that at best it might get them to do what they were already going to do, just a couple years sooner.
Alaska cannot afford to repeat past mistakes or gamble away its future or its savings. Alaska gave away our oil before and got nothing but deficit budgets for it, not more production.
The current tax system isn't perfect, but it's far better for Alaska than this giveaway, and it can be made even stronger with balance at high and low prices and production-based incentives for new oil in the line. But to do that kind of production-based, Alaska-first system, we must first repeal this across-the-board giveaway and demand a better deal for Alaska.
Rep. Beth Kerttula, D-Juneau, in House minority leader and has served in the state House of Representatives since 1999.