I have been watching the initiative process in Alaska for 44 years. Each and every one of them has been based on hate or greed. Prop 1, on the ballot this coming Nov. 3, is based on both. This is the proposal to increase the tax burden on the major oil operators in Alaska. Alaska already has a high tax on produced oil, nearly the highest in the world.
Prop 1’s sponsors are from two camps: Political operators who want the state to have more money to spend and do not believe the golden goose will be overly bothered (the greed side); and, enviro-climate activists who want to terminate the fossil fuel industry (the hate side.) The reality that the long-term interests of either group conflict with the interests of the other doesn’t seem to bother these strange bedfellows. The greed side thinks that the industry will just suck it up and keep on going as before. This is not true.
This is far from the first time such a destructive tax change has been proposed. The previous attempt, another initiative-based tax increase, flamed out in the 2014 election but had its roots in an earlier oil tax increase that was actually passed into law in the 2007 session of the Alaska Legislature called ACES. Who were the actors? Why none other than then-Gov. Sarah Palin in partnership with then House Minority Leader Rep. Beth Kertulla. Both bragged about “working across the aisle” to get it done. (Strange bedfellows indeed.)
The result? Upon passage of ACES, not one more nickel of petroleum exploration money was approved by the industry on the North Slope. Exploration projects that were already funded and underway went ahead, but nothing new was initiated. The exploration effort was all but ended by the time Sean Parnell became governor upon Palin’s abdication in mid-2009. It took Parnell a couple of years to set things right with Senate Bill 21 and exploration resumed and continues to this day with lots of good results and new oil headed for TAPS.
We have to remember that Alaska competes with other oil-bearing regions of the world and oil companies have choices about where they invest. Alaska has some attractions that other places do not, but the most repellent aspects of our treatment of the industry has been tax instability and disrespect. Instability from the greedy and disrespect from the haters.
I am not saying that we have to do whatever the oil industry wants. There have been legitimate beefs with the industry — usually tax accounting disagreements — that had to be sorted out, sometimes in court. But, occasional bad behavior on their part does not justify massive bad behavior on our part. I am saying that Alaska has to be in a responsible partnership with oil. The two essential ingredients of such a partnership are stability and respect.
The sponsors of Prop 1 don’t want us to have partnership with the oil industry. They want us to be at war where greed and hate have made their nest.
I am also not saying that we as a society have to be committed to fossil-powered energy indefinitely. There is a good trend, nationwide, to battery-based cars and now small trucks and also a trend toward generating electricity by non-fossil means. The transition is happening. Going to war with the fossil energy industry will only slow it down and surely will not speed it up.
The most significant change in modern society — from an air pollution standpoint — was the transition to unleaded gasoline. It happened without riots, mass upheaval or demonstrations. Society agreed on the need and got it done. Climate change activists should take a lesson from that experience. There don’t have to be losers in order for there to be winners.
Please join me in voting no on Prop 1.
• Murray R. Walsh is self-employed and has been an observer and participant in Alaska politics and economics since 1976. He lives in Juneau.