When debating proposals that could cost Alaskans billions of dollars, it's important to have your facts straight. Recently a lobbying group took liberties with the facts to sway you into giving away Alaska's fair return on the oil we own. People are entitled to their opinions. But they are not entitled to make up their own facts.
It is irresponsible to mislead the public in an effort to promote a state giveaway to Exxon, BP and other companies that have reaped over $20 billion in Alaska oil profits since our new oil tax and investment incentive law, ACES, was passed in 2007. The very law that, according to a recent Petroleum News article, will likely lead to the busiest exploration season on the North Slope since 1969. A law only multinational oil companies reaping staggering profits could call oppressive.
In a recent AM talk radio tour, and on its website, a group calling itself "Make Alaska Competitive" has engaged in the politics of deception and personal attack. That's too bad.
Why the attack? Well, many of us believe it is unwise to give away $8 billion — as the governor proposes — in exchange for no binding promise that this money will create new Alaska investment in needed exploration. In fact, BP and Exxon both testified they won't likely do any new exploration when they receive the governor's tax giveback. The governor's proposal lets companies invest only in what they were going to do already, and take that $8 billion out of Alaska to give to executives and shareholders.
So what launched this group's recent attacks? A few weeks ago Sen. Hollis French noticed two new BP land-based drilling rigs on their way to Alaska. Sen. French and I noted that this was good news for Alaska, and showed the current tax credits and deductions — which a company can only receive if it invests in Alaska — helped bring the $250 million in more effective rigs up here.
Oil industry folks immediately claimed the rigs were contracted for in 2007, before BP knew about the 2007 adoption of our new oil tax law. They argued that had BP known the current law was going to be adopted, it would have never made this investment. They accused Sen. French and me of misleading you. Fishy, we thought. Our staff did some research.
In fact, these rigs were ordered in 2008, after ACES passed. It's not surprising BP knowingly made $250 million in needed investments under a tax law that has earned the corporation over $7 billion in Alaska profits since 2007 and that provides handsome tax credits for new Alaska investment.
Where'd we find the facts? First, there is Parker Drilling's 2008 annual report. Parker, which built the rigs in question, states in its "2008 Highlights" section that "BP subsequently awarded Parker a new contract to build and operate two new arctic class land rigs for development and drilling in Alaska." Newspaper accounts, including one from the Houston Business Journal on May 6, 2008, also noted this 2008 contract, stating "Parker Drilling Co. has won a five-year drilling contract valued at $250 million" for these land rigs, "awarded by a subsidiary of BP. …"
But for a week the "Make Alaska Competitive" folks went on the radio to personally attack Sen. French and me for, um, telling the truth. Since they haven't made a correction, I'll do it here. Oh, by the way: Contrary to industry claims, jobs on the North Slope are near a record high. We're not losing jobs. But not enough of those jobs are going to Alaskans, too many to nonresidents. That's wrong.
It's one thing to do as I and others have proposed — increase our tax credits for new exploration on the Slope, and for new processing facilities needed to put new oil in our pipeline. It's another to mislead folks into supporting a tax giveaway that requires no new investment in Alaska just to pad profit margins in Houston and London.
Let's debate. But please don't mislead Alaskans to get your way.
Read it at the Anchorage Daily News: http://www.adn.com/2011/08/21/2025143/lets-debate-oil-tax-without-making.html