Folks, it is time to admit: Alaska is no longer an oil state. Need proof? When oil prices crashed last decade and oil revenues quit funding state government, the oil industry told state leaders that the oil tax passed by Gov. Sarah Palin — ACES — was too high. They promised that if we would only cut taxes, they would produce more oil and create more jobs, thus creating more revenue for Alaska. They said that tax credits on new oil would incentivize new production and create more jobs and revenue. The Legislature complied by passing SB 21 which cut taxes by more than $1 billion per year and created huge tax credits on new oil production. How has that worked out?
Revenue for Alaska and jobs for Alaskans has fallen off a cliff, while oil production has continued to decline. In 2014, employment in oil and gas peaked at an average of 14,800 jobs. By June 2019, it was down to 11,000 jobs, June 2020, 7,100 jobs, and June of this year, 6,200 jobs. That is fewer than half the jobs that existed when the promise to increase employment was made. Meanwhile, oil tax credits that we literally can’t afford — we owe the industry billions — cancel any taxes that we do collect. If it were not for the royalties that we collect, we would be paying to have our oil extracted. We can’t even fund a decent budget. Another promise broken.
While the Earth is feeling the sting of climate change and the demand for fossil fuels declines worldwide, Alaska’s elected leaders continue to hope oil prices will rebound and that more oil will soon fill the pipeline. Dream on. They can’t even fund a decent Permanent Fund dividend. With this kind of leadership, is it any wonder that our adult kids leave Alaska to make their future elsewhere?
While oil will continue to play a significant role in Alaska’s economy, it is time to admit that it is not our future. Leaders who prostrate themselves to Big Oil are yesterday’s news. Voters need to ask candidates what will fund our future. If they answer “oil,” then find a new candidate. Our kids know that oil isn’t Alaska’s future. If you don’t want to fly Outside to visit your children, then vote for a future beyond petroleum. By the way, oil will never be produced from the Arctic National Wildlife Refuge. Get over it.
— John Farleigh
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