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Prop. 1 debate centers on oil production numbers in wake of tax decrease

Dermot Cole

The contradictory visions at the heart of the debate over repealing the SB 21 oil tax cut took center stage at the Wendy Williamson Auditorium on Monday night.

Supporters of repeal said the law adopted by the Legislature in 2013 gives away too much, while opponents said the repeal effort began as soon as the bill became law and voters should “give SB 21 a chance.”

The televised debate sponsored by KTVA-11 and Alaska Dispatch News featured three representatives from each side, offering conflicting statements on investment numbers, jobs, tax credits, oil production, state revenue and the future economy of Alaska.

One of the major points argued before the audience of 100 was whether oil production is up or down in the seven months since SB 21 took effect.

“In just six months we’ve already seen an increase in production,” said Anchorage Sen. Lesil McGuire, echoing a theme that has become a common one since the end of the Alaska fiscal year in June.

State figures showed that oil production in fiscal year 2014 dropped by 0.13 percent from fiscal year 2013.

But calendar year numbers show a larger decline in the seven months since SB 21 became law.

Oil production so far in 2014 is down from 2013 by an average of about 20,000 barrels a day, mainly because of a steep drop in production in July. In that month, oil production was about 77,000 barrels a day below July 2013.

According to state figures, oil production this year has averaged 515,598 barrels a day through Aug. 10, down from 535,540 barrels a day during the same period in 2013.

Andrew Halcro, head of the Anchorage Chamber of Commerce and a former state legislator, at first disputed the figures offered by Alaska Dispatch News reporter Richard Mauer about the 3.8 percent decline, saying it must have come from a press release from Anchorage Sen. Hollis French.

Mauer said the numbers came from the Department of Revenue.

Halcro responded:  “I have in front of me and I would be happy to share with you Alyeska Pipeline’s official spreadsheet. And the problem with those numbers is the state’s fiscal year actually ends June 30th,” said Halcro, challenging the use of numbers from July.

Mauer said the numbers covered the period from January to early August. Production numbers in August continued to be below those in August 2013.

Halcro then said: “In April, May and June, Alyeska Pipeline this year recorded a 2 percent decrease. In July, production was down 18 percent because the main gas treatment plant was offline.”

He may have meant to say that there was an increase in oil production in that three-month period, as that is clear from the Department of Revenue figures.

The decline took place in July. Comparing the first seven months of 2014 to 2013 is not fair, the opponents of repeal said.

“When you need to compare production, you need to compare it year to year,” said Kara Moriarty, president of the Alaska Oil and Gas Association. “You don’t compare your monthly budget in your own family from month to month.”

A bit later, McGuire again referred to the production numbers from early in 2014.

“I can tell you these Alyeska numbers right here show an increase in three months,” said McGuire.

Former Anchorage Sen. Chancy Croft quoted Anchorage economist Roger Marks as saying at an earlier debate that the oil companies would not take “any action” until after the repeal vote.

Croft said that nothing can be linked to their actions if they took no actions. Marks responded that what he said was that in “terms of long-term planning, I believe they are not going to make plans until this referendum is resolved.”