Dunleavy and Meyer’s policies have saddled Alaska with an economic mess

Sens. Mike Dunleavy and Kevin Meyer voted for Alaskans to receive the worst deal for our petroleum resources in our history, while also voting for among the highest state budgets in our history. The Dunleavy/Meyer policies have been a disaster for Alaskans and have undercut the long-term viability of our Permanent Fund and dividends. Largely as a result of the Dunleavy/Meyer policies, we are in a recession, have gone through $15 billion of our savings, have a huge state deficit and have not had a significant capital budget to maintain or improve our infrastructure for years.

Sens. Dunleavy and Meyer suggest our economic hardships are not the result of their policies but rather the result of the drop in the price of oil. While the decline in the price of our oil did cause hardship, the decline coupled with the Dunleavy/Meyer policies resulted in the perfect storm against Alaskans. Alaskans' share of production declined by $1.7 billion as the result of the production policies Dunleavy and Meyer supported, even when the price of oil remained identical. Our share of production dropped from $3.4 billion in 2013 (the year before the policies went into effect) to $1.7 billion in 2014 (the year after the policies went into effect), even though the price of oil remained identical at $108 per barrel.

The true impact of the Dunleavy/Meyer policies may be seen by comparing our share of production today with past periods when the price of oil was roughly the same. In 2009, the price of our oil was $68.34 per barrel, and our share of production was $3.1 billion. In 2010, the price of our oil averaged $74.90 per barrel, and our share of production was $2.9 billion. Under the Dunleavy/Meyer policies, in fiscal 2015, the price of our oil averaged $72.58 per barrel, and our share of production was $0.4 billion — $2.7 billion less than in fiscal 2009 and $2.5 billion less than in fiscal 2010. The Dunleavy/Meyer policies are resulting in Alaskans losing roughly $2.5 billion each year at current oil prices.

While gutting our share of production was justified by its proponents on the basis of creating new jobs, the Dunleavy/Meyers policies failed miserably in creating new jobs. In 2014, the first year the Dunleavy/Meyer policies went into effect, there were 14,765 oil and gas jobs in Alaska. In 2017, only three years later, there were only 9,752 jobs. Thus, under the Dunleavy/Meyer policies, Alaskans have lost 5,013 oil and gas jobs or 34 percent of the total oil and gas jobs in Alaska. Further, a greater share of these rapidly shrinking oil and gas jobs are going to non-Alaskans. The share of our oil and gas jobs going to non-Alaskans has increased from 28 percent of the total jobs in 2009 to 37 percent of the total jobs in 2016, or a 32 percent decrease in jobs going to Alaskans.

To achieve actual job growth in the oil and gas industry we need to recover our fair share of production from the largest and most profitable fields, redirect a portion of those revenues to incentives for exploring and producing our more challenging fields (typically held by independent oil companies), and reduce the permitting and regulatory overhead and time associated with oil and gas development. This would increase both our share of our production and oil and gas jobs. The Dunleavy/Meyer policies achieve neither of these objectives.

While they gutted our share of production and collapsed our revenues and jobs, Sens. Dunleavy and Meyer simultaneously supported the highest state budgets in decades. For example, in fiscal 2014, the state spent $6 billion for total operations from unrestricted general funds with Sen. Dunleavy and Sen. Meyer's support. This compares to the most recent budget for fiscal 2018 of $4.3 billion for total operations from unrestricted general funds. Essentially, Sens. Dunleavy and Meyer voted for state spending well in excess of our available revenues, contributing considerably to our state deficit.

Now, after helping create the highest state deficits in our history, Sens, Dunleavy and Meyer claim to be supporters of the Permanent Fund and our dividends. The simple truth is the Dunleavy/Meyer policies are what have put our Permanent Fund and dividends at risk in the first place.

For decades, our finest leaders (Republican, Democrat, and independent) have stood up for Alaskans and negotiated a fair share of our oil production, sought spending discipline, and acted to protect the Permanent Fund and our dividends. Sens. Dunleavy and Meyer are not cut from this same cloth. Given a choice between their major oil supporters and our share of production, our Permanent Fund, our jobs or our dividends, they have consistently voted in favor of their major oil supporters and against our future. In summary, Sens. Dunleavy and Meyer are part of the problem, not part of the solution for Alaska.

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