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Crazy Palin leaves stain on Alaska's oil industry

Dan Fagan

Between the bizarre tweets, the incoherent "good-bye Alaska" speech, and the ensuing and constant pleading that quitting is fighting and fighting is quitting, it has become abundantly clear to anyone with any sense that Sarah Heath Palin has become "Crazy Governor Lady."

Yes, she has lost it and revealed herself as flaky, delusional, dishonest, slightly paranoid, and in way over her head. Palin should have never been elected governor. She wasn't ready and those of us who voted for her should have known it. The lesson is that personality, image and looks should never trump substance when evaluating a candidate.

But that's all in the past now. Hopefully most of us have learned from our mistake. The big question now is how do we get busy cleaning up her mess?

Let's start with the worst piece of legislation in the history of the state, Alaska's Clear and Equitable Share or ACES.

The evidence is overwhelming ACES is killing Alaska jobs and drying up future investment. BP's development of the Liberty field is one of the most glaring examples.

When BP announced in July of last year it will invest $1.5 billion to develop Liberty field, we learned the oil company giant would incorporate the world's biggest land-based drill unit, with power two to three times that of a typical North Slope rig, and that the investment would create hundreds of high paying jobs and extend the life of the Trans-Alaska Pipeline. This project is a big deal and the kind of investment we have seen very little of lately in Alaska.

It's the kind of investment you see in many other U.S. states where the oil industry is booming. Companies are pouring billions of dollars into exploration in states like Louisiana and Oklahoma.

So why are we not seeing more investments like the Liberty field in Alaska? The answer is easy. It's because of ACES. BP says if Liberty were on state land instead of federal, it would have scrapped the project. Because Liberty is on federal land it is not subject to the ridiculously high production taxes Sarah Palin's ACES gave us.

One of the many great myths Sarah Palin used to rise to power is the idea oil companies have to invest their limited future capital in Alaska and therefore we can treat the industry anyway we want. For ACES to work we have to accept the notion taxes don't deter investment. Nothing could be further from the truth. Oil companies only have so much capital to invest and, like the Liberty field, will only invest if prospects pencil out.

But the Liberty field is not the only evidence "Crazy Governor Lady's" ACES legislation is hurting our economy.

The Fraser Institute, a Canadian think-tank, recently issued its 2009 Global Petroleum Report. The report evaluates the highly competitive world of oil company investment options. The news is not good for Alaska.

The 2009 Global Petroleum Report showed Alaska ranking 78th when it comes to oil companies investing in exploration and production. We dropped from 46th in 2008. The report cites a number of factors for the decline in Alaska's competitiveness. High taxes and royalty rates are listed as top deterrents for the oil industry when it comes to investing in Alaska.

The international study showed nine U.S. states ranked in the top 10 which makes Alaska's dismal 78th ranking that much more troublesome.

Remember ACES raised production taxes on the oil industry 400 percent when prices are high. And oil companies make their investment decisions on how much they will earn when prices are high. This is another reason ACES kills so many investment dollars in Alaska.

The focus for Alaska now should be to undo ACES. Remember the original ACES bill took a very different form as law after liberal Democrats in the Legislature were through with it.

It's time for new Gov. Sean Parnell to take up the fight against liberal Democrats and undo ACES. Parnell must abandon his "Palin can do no wrong" stance and clean up the mess she left us. Sean, let's make Alaska competitive again.

Dan Fagan hosts a radio talk show on KFQD 750 AM. E-mail, faganreport@me.com.


DAN FAGAN
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