On Aug. 19, Alaskans should vote “yes” on Ballot Measure 1 to repeal SB 21. SB 21 goes too far. It does not provide Alaskans with a fair division of our resource wealth or with a rational resource development policy.
Alaskans have an obligation to future generations to optimize revenue from the three major oil companies harvesting our most economic fields. SB 21 gives away massive future revenues for harvesting the two largest oil fields in North America (Prudhoe Bay and Kuparuk) when neither requires additional support. SB 21 also gives away massive future revenues for Point Thomson by designating the oil as “new,” even though it has been economic to develop for decades and the state forced its development. We should not give away massive future revenues to a few major oil companies for harvesting our most economic fields, for developing economic fields when forced to develop, or for a poorly drafted definition of “new” oil.
While giving away massive future revenues for the wrong reasons, SB 21 does not do enough to support exploration and development for the right reasons. Those oil companies engaged in the exploration and development of our more economically challenged and smaller fields need more support than SB 21 provides.
While there is a great deal of misinformation, be assured, SB 21 will create an unfair division of resource wealth and will result in a lower quality of life for all Alaskans as the schools, roads, libraries, police, fire protection, and other services within our villages and communities suffer and the major capital projects critical for our future fail for lack of funding. Also, be assured, SB 21 will result in the loss of Alaskan jobs as the three major oil companies take much of their new SB 21 profit out of Alaska to support their out-of-state projects and shareholders. With budget deficits of $2 billion per year, we cannot afford to spend our savings, give away the revenue from our major economic fields, and put our Permanent Fund and economic future at risk to enhance three major oil companies’ profits.
For those concerned that these three major oil companies are not making enough from Alaska, I offer two observations.
First, they will realize more than three times the revenue this year (about $19.2 billion) with production at 525,000 barrels per day than in 1988 (about $6.1 billion) when production was at its peak of 2.1 million barrels per day. Because the price of oil has risen from $8 in 1988 to over $100 today, they were realizing “windfall” profits before SB 21.
Second, if they want even more, they should reveal their actual Alaska profits rather than, with one limited exception, hide them in secrecy. The division of our resource wealth with the three major oil companies dominating the North Slope should be done through a transparent process. Instead, they substitute expensive public relations campaigns for sharing the truth.
While some Alaskans will disagree with me, I hope all Alaskans acknowledge there is a good-faith disagreement as to how best to proceed with resource development. Only a “yes” vote on Ballot Measure 1 will repeal SB 21, permit the disagreement to continue to be discussed, and force the politicians to go back to Juneau and do a better job for us all.
Robin O. Brena is is a longtime Alaskan and Anchorage attorney who has worked in major oil and gas matters for 30 years.
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