In 2005 I joined a small group of legislative Democrats led by Les Gara in what seemed then to be an impossible quest to fix a broken oil tax system that was sending billions in profits to BP and Exxon and shortchanging Alaskans. Along the way we were encouraged by Jay Hammond, Vic Fischer and other Alaska heroes.
We finally won in 2007 when we passed ACES, which has stimulated jobs and capital spending on the North Slope and has swelled Alaska's savings accounts to a record $12 billion.
Thus I was surprised recently when my opponent in the Democratic primary began campaigning to discard this very hard-won victory.
Ethan Berkowitz and I respect each other and agree on many things. But his proposal to cast aside ACES in place of his untested idea highlights our differences.
I'm proud of the bill we passed. We did it in the face of well-paid oil company lobbyists and knowing the industry would send campaign money to our opponents to punish us for our work.
We prevailed with a carefully pieced together coalition -- Democrats, a minority of Republicans who bucked party leadership and then-Gov. Palin, whose ACES bill as proposed was substantially strengthened by the Legislature.
I believe both in responsible, safe oil development in Alaska and in the constitution's requirement that Alaskans receive a fair share for the oil we, as Alaskans, all own. As a former oilfield worker, with 12 years of blue collar work in Cook Inlet and on the North Slope, I know we have to do both. And as a small businessman, I also know that investment can be harmed when companies think the Legislature is going to change its tax rate every year.
Economist Richard Fineberg noted in a recent article that my opponent's proposal to change an oil tax system again that changed in 2006 and in 2007, can "create instability that is not good for the state or the industry."
Here are a few things you should consider. Despite oil company advertising claims, North Slope employment and investment are higher now than when ACES passed. According to the state Department of Revenue, capital investment on the North Slope last year was up nearly 33 percent from 2006, the year before ACES passed. And employment is 25 percent higher. That's right. Claims that the 2007 ACES reforms have cost oil industry jobs are false.
Meanwhile, the oil industry in Alaska continues to enjoy strong profits. Keep in mind that Exxon and BP don't share their Alaska profits publicly. Conoco Phillips does, however, and their numbers are revealing. They reported over $8 billion in profits in Alaska between 2006 and 2009, including annual profits in the $1.5 billion -- $2 billion range under ACES. And we know Exxon earned higher profits than any company in the history of the world in both 2007 and 2008 -- totaling over $80 billion.
Most importantly, though, Alaskans have benefited from these reforms. We've used our fair share of these oil revenues to forward-fund education, something school districts have requested for years. We've invested in renewable energy projects around the state. We've weatherized homes, given raises to VPSOs and enhanced pre-kindergarten education opportunities, though we need to do more.
And all the while we've been saving, saving, saving. Since 2007 we've put over $7 billion into Alaska's savings accounts.
Remember that old bumper sticker about praying for another oil boom, the one we wouldn't waste? Well, it came and we didn't fritter this one away.
Governing is about getting things done, not undoing good policy.
I cannot agree to toss away a law that provides both a fair share for Alaskans and fair investment incentives for industry in favor of one for which my opponent concedes he does not have details or even any revenue projections.
It took a lot of work to finally get Alaskans a fair share for our oil. The law has served us well. It's something we should improve and protect, not toss aside in an election year.
Hollis French represents District M (Anchorage) in the state Senate and is a Democratic candidate for governor.
By SEN. HOLLIS FRENCH