Oil tax ballot measure will hurt Alaska’s economy, jeopardize new projects

We live across the state, work in different sectors, and we likely don’t see eye-to-eye on everything. Yet today we stand united on one important issue: We want to protect Alaska’s economy, and we strongly oppose the proposed oil tax ballot measure.

We’ve joined together as co-chairs of OneAlaska to pledge bipartisan support for defeating this misguided ballot measure. Our reasons for volunteering are as varied as our backgrounds, but all in service to Alaska.

This ballot measure would leave Alaska’s economy with a black eye. The supporters of the ballot measure acknowledge that our oldest, highest-producing oil fields would be subject to at least a 200% tax increase at a range of oil prices. No industry, whether it’s oil and gas, health care, or commercial fishing, can absorb a tax increase that massive without drastically changing the way it does business.

Passing this ballot measure would make Alaska far less competitive, which could result in the elimination or postponement of several exciting new developments on the North Slope, not to mention the jobs that go with them. We want new investment to stay here, in Alaska. Ultimately, it will be Alaska workers and families who will be hurt most by this measure. No matter what you think about changing oil taxes, this ballot measure simply goes too far.

Moreover, this ballot measure was written in private with no public input or expert analysis. Asking voters to decide incredibly complex natural resource tax issues when their only option is to vote yes or no is unfair. Our legislative process exists to vet tough issues using a combination of economic analysis and modeling, expert testimony and citizen feedback.

Alaskans know we are on the cusp of an oil renaissance. With big new projects and oil fields being discovered and explored, optimism abounds and our economy is recovering. Why would we jeopardize it with an unprecedented and punitive new tax that chases investment dollars away?

Near-term projects on the horizon, some within the legacy oil fields and units, could generate an estimated $13 billion in capital dollars, which would lead to hundreds of thousands of new barrels flowing through the trans-Alaska oil pipeline. And of course, more oil means more revenue for important state services.

Our current oil tax structure is working. It delivered as predicted, stabilizing oil production even during a period of extremely low oil prices. In fact, last year (fiscal 2019), oil production averaged 80,000 barrels per day above what was expected under our last tax structure.

The current tax law also encouraged new investment, with oil companies spending at levels we haven’t seen in a decade. Last year, the state Department of Natural Resources reported the busiest drilling season in 20 years. It makes absolutely no sense to hit the brakes on all this positive momentum with a punitive tax that was crafted in the dark, out of view of Alaskans.

More than anything, we oppose this ballot measure because we are hopeful about our state’s future and want to see Alaska succeed. We are currently engaged in an important debate about what kind of state we want to live in, and it’s understandable that oil and gas is part of that discussion. What we find unacceptable is another divisive, unproductive fight over our state’s most important economic driver, especially when everyday Alaskans have so much at stake.

We will work together to share our views with Alaskans, and will insist upon a fact-based, thoughtful, and honest conversation about the impact this measure will have on workers and families. Our opponents may use heated rhetoric and bumper sticker slogans, but the facts will be on our side and we believe Alaskans will join us in making the right choice by rejecting this ill-conceived ballot measure.

This commentary was submitted jointly by the co-chairs of the OneAlaska political advocacy group. They are Chantal Walsh, Nicholas Begich, Genevieve Bell, Gary Dixon, Jason Grenn, Crawford Patkotak, Bill Popp, Julie Sande, Jill Schaefer, John Sturgeon and Jodi Taylor.

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