Point-Counterpoint: Sen. Bill Wielechowski on oil taxes, Pebble and gas prices


For decades, the philosophy in Alaska was that low oil taxes would spur more jobs and production. By 2006, 15 of 19 oil fields paid zero production taxes and oil was at a record high price. Yet jobs and investment declined and oil production plummeted from 2 million barrels per day to 858,000. A confidential 2004 BP memo revealed the oil company’s strategy regarding Alaska: make huge profits here and invest elsewhere — like Venezuela, with a 95 percent tax rate, and Iraq, with a 98 percent tax rate.

In 2007, on the heels of a massive corruption scandal, we overwhelmingly passed our new oil tax structure. The new philosophy was to reward reinvestment and incentivize new oil companies into Alaska. Contrary to what you may be hearing, it’s led to all-time highs in jobs and investment, while the number of oil companies in Alaska has increased 253 percent to an all-time high. Both sides have done well — Alaska has grown our savings to over $16 billion and the oil companies have made more than $35 billion in profits.

For months Bob Roses has attacked me for demanding that we provide no tax breaks without increased Alaska jobs or production — all while he’s had four fundraisers at the Petroleum Club and with oil industry executives who want billions in tax breaks with no strings attached. Now, seeing his position is wildly unpopular, he’s apparently attempting to adopt my position.  

But the fact remains — Bob Roses has already voted to keep our old, corrupt oil tax bill, which is even worse than the $2 billion proposed giveaway. As Alaskans, we simply can’t afford to go back to failed policies that have cost us billions.

Can we do better? Absolutely. We need to enforce our leases so oil companies don’t sit on profitable fields while holding us hostage for tax breaks. Instead of giving away billions in tax breaks with no strings attached, we need to remember that it’s our oil and there should be no tax reduction without increased production.



I am a big supporter of mining. But I have concerns about the Pebble mine. As currently proposed, Pebble would create a massive open pit sulfide mine at the headwaters of the largest wild salmon run on Earth. The problem with sulfide mines is they become toxic when exposed to air, creating acid runoff that leaches into waterways.

Pebble mine would destroy dozens of miles of salmon habitat and create the world’s largest earthen dam, some 700 feet high and miles long, to store up to 10 billion tons of toxic waste forever in an earthquake-prone area. Because of these concerns, I pushed for funding for an independent evaluation of our permitting process to ensure this mine could be developed safely.

If it cannot be proven that Pebble will not harm the fishery, we should not trade a renewable resource that has sustained Alaskans for thousands of years for a short-term, nonrenewable one.



Alaskans know we’re getting gouged at the gasoline pump. Most of the oil comes from Alaska, it’s refined right here and we have the lowest gasoline taxes in the nation. Two attorney general investigations show the culprit is legal price gouging by the refiners.

From 2004 to 2007, Alaska’s refining margins averaged about 19 percent higher than the margins in Washington. But from 2008 to 2012, Alaska’s margins skyrocketed to 106 percent higher. Price gouging has drained hundreds of millions from our economy and hurt Alaskans and our small businesses.

I’ve proposed legislation that gives Alaska the power to address price gouging. I’ve also pushed to increase competition to help drive prices down.


Bill Wielechowski, who has served in the Senate since 2007 and has been a member of the bipartisan coalition, is the Democratic candidate for Senate District G in East Anchorage, which includes part of Muldoon, Boniface and Joint Base Elmendorf-Richardson.