The Alaska Legislature is on the verge of approving billions in oil tax cuts in exchange for the mere hope of more oil company investment and greater production.
If lawmakers follow through, they'll have given away a huge chunk of Alaska's finite oil wealth in exchange for a pat on the head and a kind word.
We don't get an unenforceable promise, much less a real commitment.
Yes, you'll give us billions in additional profits, says the industry, but it's still not enough to guarantee new development.
But at least you've improved your odds, they add reassuringly.
The three major North Slope producers -- BP, ConocoPhillips and ExxonMobil -- have made billions in profit in Alaska both before and after the Palin-era ACES (Alaska's Clear and Equitable Share) tax regime took effect in 2007. Now they will be guaranteed billions more.
The question isn't whether we're doing enough for them. The question is: Why aren't we telling them what they must do to reciprocate?
Alaska should be willing to negotiate all aspects of ACES. But the only negotiating going on is us negotiating with ourselves. Despite all the testimony and meetings and advertising, the majors have never come to the table to talk terms.
Our leaders should be rallying us and one another to stand our ground. Alaskans have been and are ready to deal with the oil industry on terms profitable to the industry -- that's been our history and the evidence is all over the annual reports of the companies. But when the response to billions in tax breaks is a shrug and a barely audible "maybe," it's clear Alaska is a resource, not a partner.
We shouldn't let any industry treat us that way. Ever.
Alaska is a sovereign state. Further, it's a sovereign state whose natural resources belong to the people of the state. Our constitution mandates that those resources be used for the maximum benefit of the people. (This makes us different from the other 49 states; the "owner state" isn't just a concept, it's a constitutional fact.)
We should expect our governor and lawmakers to act like the leaders of a sovereign state, not like supplicants and petitioners, and especially not like ones prone to panic and intimidation.
For all the industry talk about our woeful business climate, isolation and cold, Alaska is a solid place to do business. Politically stable, friendly to the industry and with vast oil and gas potential both offshore and on. Just as Alaska is not a colony, the oil industry is not an enemy -- even in the heat of a fierce disagreement over fair shares and fair play.
But we -- and our leaders -- need to keep in mind that Alaska and the oil industry are separate entities with competing interests. History shows that the industry will take what it can, fight to keep it and then fight to get more. That's what they're doing now in Juneau.
Alaska has fared best when its leaders have been willing to forcefully assert the best interests of Alaskans -- as in the Amerada Hess case, or the battle over development of Point Thomson. That's not what's going on now in Juneau.
Our lawmakers ought to draw on those hard-earned lessons and stop looking at the future with fear. Alaska isn't going out of business. Alaska just has to figure out how to adjust our tax regime to incentivize more investment that will lead to greater production. Nothing new or radical in that.
But we've hobbled our ability to get there by going about this in the wrong way. Gov. Parnell and the majority of legislators have had only one real question for the industry: "Is this enough?"
The industry won't offer guarantees? Fine. It doesn't have to. Alaska will make this one and only offer: Produce more, profit more.
But we can't get there with Senate Bill 21. Lawmakers should vote no.
Then they can go to work on a bill that actually works for Alaska.
BOTTOM LINE: Vote no on Senate Bill 21.