Those who understand that Alaska's Clear and Equitable Share oil tax is draconian dreck much adored mostly by Palinistas, Democrats and other oil industry haters can only marvel at the folks who loudly, even belligerently, defend the tax.
You have to wonder: How can rational people see ACES as anything but an economy killer? There is so much evidence proving the tax's supporters are wrong that even the Justice Department could not hide it all.
The only way to make ACES sound swell is to resort to half-truths, apples-and-rutabaga comparisons and more than a little sleight of tongue. Supporters inexplicably, conveniently confuse exploration wells -- there is only one this year -- and development wells, or hype tax credits as if the one-time gifts somehow offset ACES' rapaciousness over the long haul -- or they pretend offshore drilling will happen soon and, voilà , fill the trans-Alaska oil line.
Since Sarah Palin's unfair levy was imposed in 2007, the state has milked more than $1 billion a year too much from the industry because of the law's wildly aggressive progressivity. That component gives Alaska perhaps the highest marginal tax rate in the world. Because of ACES, investment, exploration and production are down on the North Slope. Jobs are being lost. The economy is teetering.
ACES supporters and a handful of politicians say that is untrue; that things are peachy; that future oil supplies -- based on no more than broad promises, new technology and really lousy projections -- somehow will save us. They will tell you the oil pipeline will have more than enough throughput to keep operating, that fears it prematurely will shut down in just a few years is bunkum, despite the experts. Nothing to worry about, supporters coo.
Why, I wondered, would anybody peddle this nonsensical fluff when Alaska is tap-dancing at the edge of a fiscal abyss? Do they so badly want to bleed the industry for votes here and now that they could not care less about Alaska's future?
Then, it dawned on me: They must have a grand plan already detailed, spit-polished and stuffed into a Prius glove compartment someplace for the fateful day when ACES' onerous provisions finally ensure oil no longer can carry the state, when it no longer pays for 90 percent of government spending or supports more than half of Alaska's jobs. A blueprint to save us all. The mother of all plans.
OK, I admit it. I cannot for the life of me figure out what it would be. I'm embarrassed to admit that, but these good folks are smarter than the rest of us and must know what to do when the oil dries to a dribble. Whatever it is, I'm in the dark. If you add up all the revenues generated by tourism, fishing, timber, other mining and whatever else the government can beg, borrow or steal, you could buy a pretty good cheeseburger. The plan must be something else.
Maybe, I thought, they are banking on a gas line. But there is that darned shale gas thingy. All of a sudden, shale gas is more plentiful than water in the Lower 48. Then, there is the new technology to economically suck it out of the ground.
A gas line seems a pipe dream -- at least for the coming decades. We will have been dead broke a long time before we see it built -- if ever. No matter what, gas would not begin to replace oil as the state's main revenue source.
What's left? Not all that much. Maybe ACES backers will use what money we have socked away to buy vast shale gas tracts in the Lower 48 and we would not need a long pipeline. They could auction state buildings or sell off harbors and airports or subdivide state parks or even organize guided wolf hunts.
Oh, wait a minute. What about a back-breaking income tax and a sales tax and a tax on just about everything else? Maybe that's their grand scheme. Or maybe they are just going to bail out when Alaska goes belly up. That cannot be it. Surely they have a real plan.
If legislators and ACES supporters working against reform have a plan, now would be a nifty time to share it with the rest of us.
We can only hope it is more than: "Will the last person out please turn off the lights."
Paul Jenkins is editor of the AnchorageDailyPlanet.com.
PAUL JENKINS
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