In his Sept. 26 commentary, Robert Seitz made many interesting and accurate observations about energy prices in Alaska. There was, however, one glaring error in his commentary that I must address. He contended that raising taxes on oil produced in Alaska would increase our energy costs. He could not be more wrong. The price we pay for fossil fuel in Alaska is directly tied to world commodity prices, not the cost of production in Alaska. Why else would our fuel prices fluctuate so much when oil production and refining costs remain relatively stable?
Since we produce and refine our own oil here in state, we should enjoy low and stable gasoline, natural gas and heating oil prices. Instead, our prices change constantly. The reason given by the oil industry for the constant change in price is world supply and demand. That is why prices fell during the pandemic and why prices rose when Russia attacked Ukraine.
World oil and gas prices are not significantly affected by Alaska’s tax policy. World events, such as the war in Ukraine and Saudi Arabia’s recent reduction of their oil exports by a million barrels per day, affect the price we pay much more than any policy we have in America, much less Alaska’s tax rate.
We are among the lowest taxed regions on Earth for the production of hydrocarbons. Alaska should levy taxes on the oil industry that approach a world — or at least a national — average. Don’t let some of the most profitable companies in the world tell you that raising taxes in Alaska, bringing us closer to the world’s average, will raise the price that you pay, or the amount of oil that they produce here. Their lies just line their pockets. Don’t be fooled.
— John Farleigh
Anchorage
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