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To undecided voters: Big Money ads are 'Baloney marinated in oil'

Joe Paskvan
OPINION: Those in favor of keeping SB21 would claim credit for the sun rising in the east if they thought it would buy your vote.

Nearly 50,000 of your fellow Alaskans signed a petition to give you the opportunity to say yes to Ballot Measure 1. A crucial vote will occur on Tuesday. Alaskans will be asked to affirm the courageous Alaskans who have made this voting opportunity real. There is no way, however, that the grassroots efforts to overturn SB 21 can compete with 'Big Money;' we just can’t.

Big Oil and its supporters are now spending multiple millions of dollars. Many polished claims are advanced that likely make you wonder. Be wary of the slick and smooth-tongued Big Money campaigns, which are trying to mislead you.

A few core points may be kept in mind to help you vote yes on Tuesday. Decline started in 1989, and taxes had nothing to do with decline then or now. Political statements unconnected with reality in 1999 made the false promise: "No decline after ‘99." The last 15 years have proven the political promises were false in 1999; they are also false now. If SB 21 had applied in FY2012 to two fields -- Prudhoe Bay and Kuparuk, Alaska would have lost $1.7 billion from just those two fields. SB21’s tax structure drops Alaska at least $1.4 billion below North Dakota’s revenue for the same amount of oil projected in FY2015. In FY2014, which ended June 2014, Alaska’s deficit was approximately $2 billion for one year.

Now Alaskans are told that SB 21 should be credited with the slight bump-up in production in 2014. Bump-ups in production were predicted, under ACES, in 2011 for calendar years 2014 and 2016. SB 21 would falsely claim credit for the sun rising in the east if they thought it would buy your vote.

In the mid-1990s the Big Three determined spending more money on surface treatment facilities in Alaska was “unwarranted." Alaska’s North Slope was in harvest-mode decades before ACES and oil profits were deliberately -- intentionally -- removed from Alaska. Decline started in 1989 and ACES, enacted in 2007, is not responsible for throughput decline; rather, harvest-mode decisions 20 years ago by Big Oil are responsible for throughput declines since the late-1980s. The North Slope processing facilities have been maxed out for decades. Current declining throughput was designed, engineered and intended decades ago and long before ACES. Under the Economic Limitation Factor, the tax system before ACES, 15 of 19 producing fields paid zero or next-to-zero percent production tax. Alaska has “been-there-done-that” with low or even no tax and there was no increased production in the pipeline; the decline under ELF continued as it had started in 1989.

If SB 21 were applied to the entire period of ACES, the people of Alaska would have lost about $8 billion in revenues. SB 21 over time gives away too much. SB 21 will not pay for itself.

A particularly erroneous myth that has been advanced by Big Oil and its supporters, including politicians like our governor, is that cutting taxes will increase throughput from Prudhoe Bay and Kuparuk. This is a false statement. I searched for a way to explain this without having the readers eyes glaze over.

A Pulitzer Prize-winning business journalist at the Los Angeles Times -- Michael Hiltzik -- this year wrote about the falsehood advanced by Big Oil in Alaska.

Hiltzik wrote on  the false propaganda that lowering taxes will increase throughput: “this is baloney marinated in oil.” Baloney marinated in oil!

Mr Hiltzik continued: “Petroleum economists generally counsel that state oil taxes have no effect on production decisions, which are guided by the world market price.” Hiltzik concludes his commentary stating the “claim that low taxes mean higher production will continue to walk the land, like a zombie.” Big Oil and our governor’s false argument is dead; it just hasn’t stopped moving. The falsehood keeps moving because without it SB 21 would also be dead on arrival in August.

Big Oil and our governor want to mislead Alaskans beyond August this year. Big Money with its Big Money ads is filling the political pipeline with baloney ... and it is marinated in oil.

Big Money spending multiple millions to protect billions will continue to spin zombie logic.

I know this -- the voters in Alaska do not have to believe “baloney marinated in oil.” Vote yes on 1.

Joe Paskvan lives in Fairbanks and is an attorney at Paskvan & Ringstad. He served as a Democrat in the Alaska State Senate from 2008 to 2012, including a year as co-chair of the Senate Resources Committee for 2 years focusing on North Slope development and oil taxation issues.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.