The Alaska Senate’s ‘Big Lie’

  • By Eric Treider
  • Thursday, May 18, 2017 9:26am
  • Opinion

Alaska’s oil companies display the situational ethics of a band of rich, randy frat boys with pockets full of roofies.

Though nothing compares with the trauma and indignity of rape, sadly, our oil companies took unfair advantage of Alaskans through the direct purchase of a 10 percent share of our state Senate, oily influence on many of their peers and through a $15 million ad campaign in defense of Senate Bill 21, an ad blitz infested with misinformation, false promises and threats.

As a result, they have taken $11 billion dollars from us, money that could now be used to keep troopers, teachers and other vital state workers on the job. Money that could be circulating throughout Alaska’s private sector, which has been devastated by cuts in state spending.

Which brings us to The Great Lie: What’s good for the oil companies is good for Alaska businesses. When I ran for state senate against ConocoPhillips employee Peter Micciche in 2014 and we debated before our local Chamber of Commerce, I felt like Public Enemy No. 1 because these folks viewed me as a threat to the oil industry and consequently, a threat to their businesses.

That’s a fallacy. Alaska’s small business owners are intelligent, resourceful people who have worked hard to establish enterprises they often intend to sell to fund their retirement or they hope to convey these businesses to their children. These people are in business for the long haul.

What they don’t seem to understand is that our current oil tax structure is intended for the short haul. When, through our tax system, we provide incentives for oil companies to drill the hell out of the North Slope as quickly as possible, we’ll deplete these resources sooner. No more oil. No more oil company business.

And most important, no more oil tax money invigorating our economy through state spending. There isn’t a state in the union that relies so heavily on state spending to prop up the private sector. So it just makes sense for us to tax our oil production as aggressively as we can, short of driving off producers.

That brings us to the next biggest lie: If we raise oil production taxes even a little, we’ll push producers away. Not true. Right now, Alaska’s oil companies are getting a better deal here than anywhere else in the world. According to Sen. Bill Wielechowski, next year, we’ll get about 17 percent of the gross value of our oil. In Texas and North Dakota, oil producers pay taxes at more than twice this rate and their production costs aren’t too much lower.

Compare the way Norway and Alaska have handled their oil wealth. Norway has out-produced Alaska by a factor of two but their sovereign wealth fund contains twenty times more money than our Permanent Fund. The result? A $200,000 for every man, woman and child in Norway to fund their government in perpetuity. Apparently, cagey Norwegians drove a harder bargain with their oil producers.

So, where do we go from here? What’s the best way of taxing those who produce our oil? Oil tax attorney Robin Brena suggests, “Going to a simple progressive gross-market tax with adjustments upward for the lower-cost legacy fields and downward for the higher-cost minor fields.”

Will that ever happen? No. Not when Sens. Kevin Meyer and Peter Micciche continue to think it’s okay to vote on legislation that makes their company — ConocoPhillips — billions of dollars. And not when their buddies in the Senate continue to buy into The Big Lie or allow themselves to be influenced by greasy campaign contributions.


• Eric Treider resides in Soldotna. In 2014, Treider ran for Alaska Senate District 0 as a nonpartisan candidate.


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