We were having a rousing discussion on the state of the
republic. When he said “Democracy Is My Religion” We discussed that as a
concept to perhaps put the nation on a path of salvation, but he wanted to know
if I had read or listened to Senator Gary Stevens’s speech that he made to
commonwealth north?
No was all I said, but I will now that you have stressed its
importance.
If you don’t already know our governor and most of the
legislature want to give one of the wealthiest corporations on the planet, conoco
philips, a tax break of several billion dollars, and in return conoco philips will
promise to support the governor and most of the legislature for reelection.
Here is the speech….
Thank you for inviting me to speak. Frankly, you’ve got a lot of nerve. I
stand before you as the recipient of an “F” from the Alaska Chamber of Commerce
and the Resource Development Council. Legislators were given grades by these
organizations, apparently based on our support or lack of it for the Governor’s
Oil Tax Bill, HB 110. So, the biggest issue facing the legislature this year is
STATE OIL TAXES. Big surprise, right? This has been the biggest issue for many
years running.
All Representatives who got A’s voted for the Governors oil tax bill, while those of us who got D’s and F’s either voted against it in the House, or like myself, dared to question it in the Senate. Former Governor Jay Hammond was a constituent of mine for several years after he left office. Hammond, liked to quote Article 8, Section 2 of the Alaska Constitution:
The legislature shall provide for
the utilization, development, and conservation of all natural resources
belonging to the state, including land and waters, for the maximum benefit of
its people.
That’s people, not businesses or
corporations, but the people of Alaska – You.
It’s a very unusual constitution in
this regard. Now, you should know, I love the oil industry. I want to see more
oil flowing through the pipeline. Oil provides jobs to Alaskans as well as lots
of jobs to outsiders. But it is our oil, and Prudhoe Bay belongs to us. It is
true oil pays the bills here in Alaska. Some 90% of our annual revenue comes
from oil taxes. So, we like you, we respect you, and we need you. We want you
to be profitable.
So let’s not forget the
constitution or Jay Hammond. But, to be fair, let’s not forget the abuses we
have suffered at the hands of the oil industry.
Remember Edmund Burke’s famous
quotation – “Those who don’t know history are destined to repeat it.” I don’t
want to dwell on those abuses but I would ask you to remember just 3 events in
our historic relations with the industry, so we won’t repeat them. Surprisingly
enough, so many Alaskans don’t know or remember these events:
1. Remember Amarada Hess, when the
industry was found guilty of falsification and depriving the state of nearly 1
billion dollars
2. Remember the Exxon Valdez, when
the industry despoiled our environment from which it has not fully recovered
even today
3. Remember Bill Allen, when some
of our elected politicians were bribed and sent to prison
Those 3 events are not the only
abuses we have experienced. These are just the 3 I’d like you to remember.
Alaska v. Amarada Hess was a court
case which found that from 1977 to 1992 companies were guilty of “deliberate
falsification in computing the price paid to Alaska for its royalty oil.” It
ended with the judge saying that we, the state, were guilty of “inexcusable
trustfulness” in dealing with the oil companies.
You did get that, didn’t you? : The
judge said we trusted the oil companies too much. That we were guilty of
inexcusable trustfulness, WOW. I think you can get into heaven for that.
The 1989 Exxon Valdez oil spill was
a disaster I well remember. With enormous damage to Prince William Sound, the
Alaska Oil Spill Commission said Alaskans were abused in Exxon’s approach
towards risk management, saying the company showed “a corporate culture of
irresponsibility” and was unwilling to jeopardize profit when it came to safety
and risk mitigation.
I was elected to the legislature in
2000 and was surprised to see Bill Allen and Veco employees so often in the
halls and offices of the capitol. As we now know, some of our elected public
officials were bribed yet still voted on oil tax bills, and even went to prison
for their actions.
So, that’s all in the past. You may
say things have improved greatly and I want to believe that.
Still, the wise person learns from
history and remembers our past. We don’t want to be accused again of
inexcusable trustfulness. We don’t want anyone to think that a culture of
irresponsibility is OK, and we don’t ever want to see our elected politicians
bribed. To maximize benefits to the industry and to the people – What’s good
for the industry may not be good for you.
So, let’s get back to our current
situation and the bill introduced by the Governor. It is HB 110 and readily, if
barely, passed the House and was sent on to the Senate. It gives away billions
of dollars in taxes to the oil industry. Upwards of $9 to $10 billion of your
money with very little in return to Alaska.
We have been asking the
Administration for months to give us some proof this will do Alaska some good.
We asked them to make their case. Give us reasons to vote for it. Show us the
proof that we get something out of giving up billions. What does it mean at
various oil prices? We have yet to receive that information. And I hope it will
be forthcoming before our session begins in January.
Jay Hammond was asked how he would
tax the oil companies and he said, “For every cent we could possible get.”
Sometimes, even I think Governor Hammond may have gotten a little carried away.
I think what he meant was that Alaskans need to get their fair share. He knew
the job of the oil company CEOs was to maximize benefits for their
shareholders, and they have done that. They have made enormous profits. And I
don’t question that they should make enormous profits. They have done well for
themselves and for us. But Hammond saw his job, as Governor of Alaska, to do
the same for his shareholders – to maximize benefits for you – to make sure
Alaska got its fair share.
So, the Senate still has the
Governor’s bill, HB 110. Right now, it is in Senate Labor and Commerce
Committee. They are studying the issue of jobs. We all know how important this
is to Alaskans. We have been told, if we pass HB 110, that more Alaskans will
be hired on the North Slope. But as the committee has done its work, they have
found we have nearly as many jobs now as we have ever had and they found that
the lion’s share of new jobs have gone to outsiders, not to Alaskans.
The normal course for HB 110 would be to go to Senate Resources, to Senate Finance, then to the Senate Floor. Many Senators have concerns about the bill – real and important questions. I suspect if it does make it out of the Senate, it will only be with major changes. A big issue is that of progressivity, which is the tax we charge when oil reaches high levels of value. This I think is something that could be done and might give the oil companies the relief they seek. Also we will be discussing heavy oil. My priority is and will remain to provide for the maximum benefit to the people of Alaska
The normal course for HB 110 would be to go to Senate Resources, to Senate Finance, then to the Senate Floor. Many Senators have concerns about the bill – real and important questions. I suspect if it does make it out of the Senate, it will only be with major changes. A big issue is that of progressivity, which is the tax we charge when oil reaches high levels of value. This I think is something that could be done and might give the oil companies the relief they seek. Also we will be discussing heavy oil. My priority is and will remain to provide for the maximum benefit to the people of Alaska
It is quite telling that Pedro Van
Meurs, an international oil consultant, in his presentation here in Anchorage
earlier this month implied that Alaska tax rates are not particularly out of
line with other regions and suggested that there may be no need to make
significant changes in Alaska’s oil tax program. He did not recommend approval
of the Governor’s HB 110. This is the best evidence yet that the Senate was
right. Let me say that again, Pedro Van Meurs comments are the best evidence
yet that the Senate was right.
The past session and this interim
have been most contentious. The Senate did not rush to pass the Governor’s oil
tax give away bill. We were called a “do nothing” senate because we would not
be rushed into a precipitous decision that could cost the state billions with
little in return.
In conclusion – Have I mentioned
the State Chamber of Commerce and the Resource Development Council? I think I
did. As you know they gave those of us who dared question the Governor’s oil tax
bill failing grades. They gave D’s and F’s to just about every Representative
who voted on the House floor against the bill. Realize the vote was 22 to 16,
so that’s hardly a landslide. They also gave failing grades to all the Senators
who dared ask questions about the bill.
Many of those representatives and
senators are right here in this room, right now. Look around you and maybe you
will see members with giant letters on their chests. It’s right there if you
can’t see it. Sort of like a target. A Giant Scarlet Letter. Though I prefer to
think of it as a Red Badge of Courage.
Anyway, thank you for inviting me.
Republican From Kodiak Senator Gary Stevens
Thank you Senator Stevens
Great speech! Thank you for reposting!
ReplyDelete