As Alaska Legislature Begins Its Session, Energy Workers Are Under Attack via Both Initiative & Legislation

January 22, 2020

As the Alaska Legislature gaveled its 2020 session underway on Tuesday, the bodies faced a budget out-of-balance by over a billion dollars, constituencies upset over the organization delays and budget fights from last year, as well as pending campaigns for – at least on paper – 51 of its 60 members.

Those in the legislature looking to perform a ‘cut-and-run’ move could look to pass a budget with modest cuts and a further drain on savings accounts.  Others may choose additional revenue measures such as an income or sales tax.  Others may look to further modify the allocation of Permanent Fund resources; using more for government and paying less out in Permanent Fund Dividends.

There’s one more revenue source that is being kicked around in Juneau, and that option is found in SB129, known by its short title: OIL & GAS PRODUCTION TAX; CREDITS.

In submitting this legislation, Anchorage-area Senator Bill Wielechowski channeled his inner big-government-loving, jobs-killing alter ego, and is attempting to replicate the pending ballot measure pushed by anti-oil-zealot and attorney, Robin Brena, and his “Alaska’s Fair Share” initiative.

Whether the vehicle for changing tax rates on Alaska’s three largest legacy fields is being driven by extremist politicians or self-serving lawyers is – quite honestly – irrelevant.  The net result of either measure would be damaging to Alaska’s energy community as a whole.

Simply put, either way you slice it, Alaska’s oil and gas workers are going to lose if the tax structure triples, as the sponsors desire to have happen.  If a billion (plus!) dollars are to be paid to the State, then the payments are either going to be diminished by extracting less “marginal oil” from the ground, by decreasing expenses and costs of production, or both.

Either option will cost Alaskans far more than Senator Wielchowski, Robin Brena, or the folks pushing either “solution” will tell you.  The fallout from Alaska’s leading private-sector job industry will be immense.  Wages, salaries and benefits will be diminished.  Jobs will be lost.  Families will be affected.  Stress will be increased.  Divorces and addictions will rise.

The next time you hear one of the advocates for these job-killing ideas speak about all the supposed benefits, ask the tough questions on behalf of the tens of thousands of energy workers across the state.  Listen to the answers.  Really listen.  Our guess?  You’ll hear nothing of substance.