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Paul Jenkins: Democrats cling to ACES in defiance of reality

Any rational person must marvel at the Democrats' Kafkaesque fetish for returning to Alaska's failed, economy-busting oil tax and their odd predilection for turning good news into sour milk.

Their battle cry? "If it is good for Alaska, it stinks for us," and they seem willing to leave no stone unturned, no spitball unlobbed, in their quixotic quest to wreak as much havoc as possible -- and lay the blame at the feet of evil Republicans.

They appear unsatisfied with making fools of themselves, stooping to just about anything to return this state to Alaska's Clear and Equitable Share oil tax, and, worse, they turn to dragging innocents into the fray to say things embarrassingly untrue.

Now they have Bella Hammond, widow of the late Gov. Jay Hammond, saying oil tax reform -- the reform Democrats are desperate to repeal in the August primary -- is "another attack on the Permanent Fund."

They have Vic Fischer, a guy who helped frame the Alaska Constitution, hammering away with the thoroughly debunked claim that the reform somehow is a $2 billion "giveaway."

None of that is true.

There is no "attack" on the Permanent Fund. In fact, the opposite is true. The reform, by boosting North Slope oil production -- as it has -- funnels more money into the fund, not less. ACES, which triggered years of production declines, was an attack on Alaska's entire economy.

"Based on actual production data, we have seen an increase of 13,300 barrels per day of North Slope oil production in FY 2014 (which ends June 30), compared to what we had forecast just five months ago," Revenue Commissioner Angela Rodell said in a letter released with the spring update. North Slope production for this year is forecast at 521,800 barrels per day, up from the December forecast of 508,200 barrels per day

Despite the Democrats' fondest hope, there also is no "giveaway." Instead, the state is taking in more money this fiscal year -- $374 million more in unrestricted revenue -- than the Revenue Department predicted in its fall forecast.

Rodell said that in "FY 2014 and FY 15, unrestricted revenue from oil production is higher than the fall 2013 forecast ..."

While the spring forecast predicts a dip to about 496,000 barrels per day in fiscal year 2015 (which begins July 1), Revenue officials say that can be attributed to an active summer maintenance season. They expect by fall to revamp production estimates to reflect new projects coming online.

From all that, The Associated Press reports Sen. Bill Wielechowski, D-Anchorage, a rabid repeal supporter, is bemoaning that North Slope oil production has not reached the 1 million barrels a day Gov. Sean Parnell once had hoped. "I don't know how you read these (numbers) and take anything good away from this," Wielechowski says.

Good grief.

Revenue officials predict $5.3 billion in unrestricted general fund revenue for this fiscal year, up from last fall's $4.9 billion forecast, and $4.5 billion for next fiscal year. They say the decline is attributable to a drop in expected investment earnings.

Facts are facts: ACES was a disaster for Alaska. It took too much when oil prices were high -- prices we may not see again for a long time -- and discouraged investment for new oil. North Slope production slid and Alaska plummeted to fourth among oil-producing states.

The tax reform, which went into effect early this year, already is having a tremendous impact on the North Slope. The Alaska Economic Report mentions several North Slope projects underway and predicts "104,600 barrels per day of new production by 2018 or shortly thereafter based on company announcements."

State officials believe those projects, the Report notes, "are enough to bring the North Slope decline to near zero by 2018 ..." North Slope producers are talking about $10 billion in projects over the next 10 years.

The good news is that, after years of production and revenue declines, there is good news.

To ensure Alaska's fiscal health, the state needs stable production and higher oil prices. It cannot control prices but has taken the only step it can -- implementing reasonable, predictable oil tax policy -- to promote more North Slope investment and production.

But despite the good news, Democrats would rather tear something down and lay blame than acknowledge the truth: Oil tax reform is working.

Paul Jenkins is editor of the AnchorageDailyPlanet.com, a division of Porcaro Communications, which is performing services for the "Vote No on 1" anti-repeal effort.


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