Real facts are finally emerging from recent debates on Ballot Measure 1, thanks to the 50,000 Alaskans who activated their constitutional right to petition for voter review of the SB 21 oil tax deal.
Department of Revenue figures show there is less oil production under SB 21. The reality of reduced production reveals the empty promises of the $13 million Exxon-BP-ConocoPhillips ad blitz. Now we know Alaska is in a bad situation with less oil production and less money per barrel.
We learned that SB 21 gives the Big Three oil companies tax breaks for fields they have already largely developed where incentives are not needed. SB 21 does not seriously encourage opening new production in areas where the bulk of Alaska's future oil development lies. ACES provided meaningful incentives to open new production areas sooner than later -- places where new companies showed high interest previous to SB 21.
A Yes vote to repeal SB 21 will return us to the ACES oil tax which was in line with our constitution, Article 8, Section 2, requiring development of our natural resources “for the maximum benefit of its people.” ACES worked well to protect oil companies during low oil prices, and it rightfully made sure Alaska shared profits when oil prices increased. A cap on extremely high rates under ACES would be much better than the low state share under SB 21 as prices rise.
If allowed to continue, SB 21 would effectively shift taxes away from oil companies and onto the backs of Alaskans. Alaska's savings accounts are already being tapped with this year's budget shortfall. The Permanent Fund will be the next target. Then, taxes on Alaskans will almost certainly follow, leaving little or nothing when our grandchildren will need it the most.
The main issue that underlies Ballot Measure 1 is whether Alaskans or oil companies will control oil development over the next 35 years. It needs to be Alaskans, like those who stepped up to this type of decision in the past.
A Yes vote will restore ACES incentives to invest in new areas of oil production that we need to secure a stable future for Alaskans across the state. Please vote Yes on 1.
Jim Sykes is a long time observer of oil and gas development and state energy policy. His preceding comment is his own and does not represent the Mat-Su Borough Assembly on which he serves.
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