GET THE FACTS ON PROP #1
By Mary Lynne Dahl
October 11, 2020
Fact: Alaska is in serious financial crisis. Government has cut all services to the bone, threatens the Permanent Fund, has cost countless Alaskan jobs and has all but eliminated the Alaska ferry system.
Fact: Big oil made promises to Alaska in 2013 in order to get Senate Bill 21 (SB21) passed, specifically that they would increase oil production, increase jobs, increase revenue and contribute to Alaska’s growth. However, since passage of SB21 in 2014, they have failed to keep any of these promises.
Fact: Since passage of SB21, more than 5,000 oil field jobs have been lost. Production has declined. Alaska is in recession. Revenue to the state has declined by $1.6 billion from 2015 to 2017. Today, over 34% of oil field jobs are held by “outsiders” who do not reside in the state and are allowed to commute to their jobs in the oil fields. SB21 has failed.
Fact: Our PFDs are now at risk. SB21 has cost the economy of Alaska almost $7,000 per person in PFD payments from 2016 to 2020. The dividend has been cut every year since 2016 while the state continued to subsidize big oil in Alaska. Prop #1 will safeguard the PFD by eliminating subsidies to highly profitable Texas oil companies.
Fact: Alaska pays more to big oil than big oil pays to Alaska. SB21 gives tax credits, paid to big oil by Alaska in cash, plus allows big oil to deduct expenses not related to North Slope oil production, making Alaska’s oil income “net negative”. Prop#1 eliminates these credits and unrelated deductions.
Fact: SB21 does not require full disclosure of all financial records associated with North Slope Oil production. Prop #1 will eliminate these exemptions and require public disclosure of all finances related to North Slope oil production.
Fact: Prop #1 does not discourage oil exploration and drilling. It only applies to the three (3) largest oil fields in the North Slope. New exploration and small producers are not subject to Prop #1, unless they are above latitude 68, have produced more than 40,000 barrels pe day in the last calendar year and a cumulative total of more than 400 million barrels of oil. Only the three largest fields meet this criteria.
Fact: Big oil can afford to be fair with Alaska. Since passage of SB21, ConocoPhillips has gotten 68% of its total income from Alaskan oil but only invested 15% of its profits in Alaska. It has raised its corporate stock dividend paid to its own investors by 60% since 2018. It made $31.10 per barrel on Alaskan oil compared to an average of $4.43 per barrel in the lower 48 states, according to the Legislative Research Service of Feb 2020. Texas gets a 25% cut of the oil income while Alaska gets 12.5%.
Fact: Big oil says Prop #1 is a bad idea because it is based on meddling from “outsiders” while Texas companies ConocoPhillips, Exxon and BP have paid $1.2 million to the Alaska Chamber of Commerce to run ads accusing Prop #1 of being influenced by “outsiders “. In a hearing in Southeast Alaska on Monday, Sept 21, 2020, when asked about this hypocrisy, big oil’s arrogant response was that the Texas oil companies consider themselves real Alaskans, rather than “outsiders”.
Fact: Ads paid for by OneAlaska, which represents big oil and is funded 99% by big oil, claims to have a broad base of support from many donors, including Native Corporations like Doyon. In fact, Doyon has a tremendous conflict of interest in urging anyone to vote NO on Prop 1, because Doyon does millions of dollars-worth of business with big oil. Doyon leases oil rigs and provides technical and engineering services through their five (5) oil services companies, to the big oil companies on the North Slope. Their opinion is hardly objective.
Fact: Big oil says, in an online ad, that Prop #1 is a bad idea because it is being proposed with “no hearings, no public comment, no economic studies and no independent analysis, behind closed doors”. This is absolutely false. From Monday, Sept 21 through Thursday Sept 24, public hearings were, indeed, held and public comment was given, including my own. Extensive economic studies and research has been done by the Fair Share Act and Prop 1 is funded almost 100% with individual donations, not money from “outsiders”.
Fact: Big oil claims that Prop #1 should be handled by the state legislature rather than by public initiative. The fact is that Prop #1 was, in fact, offered to the state legislature but the legislature failed to act. Instead, they spent almost all of our savings account and deplete our reserves, rather than deal with oil production tax reform. That left only one way for Alaska to fix this problem, which is the Constitutional option of a citizen’s initiative. If we cannot rely on the legislature to fulfill their Constitutional obligation to manage our resources for maximum benefit, we will have to do it ourselves. Thus Prop #1 was born.
Don’t be fooled by the whining and threats of big oil. Alaska is their very best customer and our North Slope Oil is their largest, most profitable oil field in the world. They need our oil and they can afford to be fair with us. We need to fix our fiscal problems and Prop #1 is a great start. A “Yes” on Prop #1 is the right thing to do and now is the right time to do it.
Mary Lynne Dahl
About: Mary Lynne Dahl is a small business owner with 35 years of experience as an investment advisor and Certified Financial Planner ®, who lives in Ketchikan, Alaska and is concerned for the future of her state.
Received October 10, 2020 - Published October 11, 2020
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