With a firsthand view on the Senate Resource Committee, I can see that there are majority members dead-set on two oil tax bills: one new tax (SB 92) and one to increase existing taxes (SB 112). As I’ve said before, we must not hit the tipping point on the Laffer Curve or we will see reduced production, reduced jobs, and reduced revenue and royalties. If we raise taxes on the one industry that is our lifeblood, the oil industry, and it back fires, what then?
We cannot forget that three major oil companies have packed up and left Alaska in the not too distant past: Arco, Shell, and BP. I am hearing “fair share” advocates argue that anyone who thinks an oil company will decrease investment in Alaska or set their sights elsewhere are succumbing to the-sky-is-falling fears. Hogwash. The risk is real, my friends.
“Some push back against the oil companies because they’re convinced the industry is on the decline and expendable. The truth is that our renewable share of energy consumption is advancing at a very slow rate.”
Love ‘em, hate ‘em, but you’ve got to admit, the billions in revenue the oil industry has provided to our state over the past 4+ decades to support state services have been a godsend.
As interest in Alaska as an energy producer picks up in Washington, D.C. and pro-oil tax activists here risk rolling up the welcome mat instead of rolling it out to investors and companies, there’s another important consideration to keep in mind.
Some push back against the oil industry because they’re convinced they’re on the decline and expendable.
The truth is that our renewable share of energy consumption is advancing at a very slow rate of only 0.3%–0.6% per year while the world demand is growing.
“Hydrocarbons are not going away. The demand is growing.”
The simple question we will answer via the legislature’s actions: are we in or are we out?
- Does Alaska want to play a major role or do we want to hang out backstage?
- Do we want to carry the ball down the field or sit on the sidelines?
- Do we want to be in the driver’s seat of our own vehicle or to take a seat in the back of a bus?
- Do we want to be the one making things happen or the wallflower observing things happen?
You get the point – that’s clearly more than enough metaphors (and bad ones at that!). How the legislature proceeds matters.
Hydrocarbons are not going away. The demand is growing.
Think about what the US Secretary of Energy Chris Wright had to say at a recent energy conference in Houston:
The world needs and will need lots of energy, and it’s going to involve hydrocarbons for the foreseeable future. Is Alaska going to help supply it in a major way or not?
