Corri Feige: ‘Bait and switch’ tax policies are killing Alaska’s reputation

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By CORRI FEIGE

Alaska has a credibility problem. We have a habit of attracting investment, especially in our oil and gas sector, and then changing the rules after companies have come and made a commitment, by investing and doing business in our state.  

Don’t kid yourself by thinking “Oh, they are oil companies… they can afford to pay more.”  This reputation is bad for Alaska and very bad for our ability to attract new companies to do things like explore for gas in Cook Inlet, invest in pipeline projects, and explore for the critical minerals that will make Alaska a powerful player in the energy transition. 

Yes, you read that right. Our bad reputation has now begun to spread into the mining sector and companies are questioning whether they can trust Alaska to not change the rules and raise their taxes or reclassify the tax status of their business after they have made huge investments in exploration and possibly development.  

I have spent the last few days at a major global energy conference talking about the massive critical mineral development that will be necessary to achieve the energy transition to more renewables, and how Alaska will help support that. Alaska is prolifically endowed with the very minerals – nickel, cobalt, graphite, copper, and many more – that are essential to making renewables and new battery technology a reality. 

But as I have spoken with people at this conference attended by roughly 30,000 from around the world, I have been shocked and saddened that Alaska’s reputation for changing the rules on oil companies is now recognized more broadly – outside the oil sector — and Alaska is considered a dangerous place to do business because of it. 

In Alaska’s heyday, we attracted very large multinational, public companies that came to explore for and discover huge oil fields. They were successful and we have the Permanent Fund Corporation, an annual dividend, and 70% (or more) support for the State’s operating budget as a result. 

As the years have gone by, our oil fields have declined and most of the big public companies have left Alaska for other places that provide big opportunities at a lower cost than Alaska. Yes, it is expensive to do business in Alaska, even for big oil companies.  

But rather than recognizing that we need to work with companies to make it attractive for them to stay in Alaska, we have seemingly acted out of desperation and raised taxes and removed incentives at exactly the wrong times.

We’ve been successful in one thing, driving companies out because of a misguided notion that they somehow needed to be penalized for producing oil in Alaska, paying taxes, employing Alaskans, contributing to the Permanent Fund and driving the state’s economy.  

And now that reputation has begun to spread like cancer. The perception of Alaska as an unfair place to do business is impacting the reality of our ability to attract companies in other resource development sectors beyond oil.  We should all be a little horrified by that.

There is currently a bill (SB 114) in the Legislature that would again “bait and switch” on Alaska’s businesses. This one is aimed at changing the tax status on private “S-Corporations” in the oil business, making them subject to the same corporate taxes that the big public corporations pay.

But the implications of this seemingly oil-only change are far reaching. The resource development community broadly doesn’t trust that Alaska won’t change the rules on their companies, too. This will result in them going to other places in the world to develop the minerals needed for energy transition. It will also ensure that the smaller private companies that Alaska so desperately needs for the future of our oil business will go other places as well.  

Corri Feige, retired commissioner of the Alaska Department of Natural Resources and current president at Terra Piniun, LLC., has over 30 years of global experience in resource development. Photo: Rob Bussell

22 COMMENTS

  1. We have a Legislature of Dems & Rinos that can’t stop spending! I agree that Corporations are ready to pull out. Maybe it’s time to start meeting every other year in Juneau.

  2. I remember a former DNR Director of the Division and recently the Commissioner of the DNR told a reporter and me that her Agency has oil fossil fuel haters in, and she had to carry water for them; who knows why ALASKA IS RUNNING OIL AND GAS INVESTMENT OUT OF THE STATE?

  3. Democrats always take money from the people no matter who the people are. Alaska is incapable of learning. So be it.

  4. Excellent observation, despite the terrifying reality. We have learned since Jr High school that once a reputation is damaged; it does not easily come back. Those pretty cheerleaders could wreck their own reputations with one bad party or one bad boyfriend when everyone else thought they were untouchable.
    On the world stage, our present administration has told the world they cannot trust the US. How? Here at home, was everything triple-checked and approved for the Keystone pipeline using zero govt money? Yup. Build it? Nope. Canceled on the first day of office. The reputation of the US keeping promises takes a hard hit right out the gate. We lied to Canada, our nearest ally!
    Are you rich and own a yacht AND might support Russia? If so, we will steal it and basically sink it because the govt isn’t into maintenance of yachts. Just stealing. Reputation takes another worldwide hit, and lessons are being learned not to believe that the US REALLY values private property as their constitution indicates. The world watches in disbelief.
    Do you hold wealth in dollars in banks and disagree with the US? Then we will freeze you out of your OWN dollars. More lessons were learned even by those NOT frozen out. And the fleeing from the dollar begins.
    Do you produce oil (Saudi Arabia) and heard that the US Govt state it hates oil and wants to kill it? Trade in Chinese money, not dollars, like the OPEC agreement since 1972. You CAN trust that the US govt ain’t gonna do nothin’ about it.
    That is ONE thing the world is learning. We’ll arm the Taliban, but we won’t do much but take your lunch money. We are the barking dog afraid to bite, and the world understands that. Even Iran has swooped in on its second oil tanker to commandeer last week. So, we swipe at the kid with glasses. Easy targets because we think so much of ourselves. Hubris is the word.
    In less than three years, the world has learned that the US cannot be trusted. For all the squandering of so much time and resources, it is squandering of TRUST that will cost us most dearly. Reputations are not easily restored, often never.
    And Alaska, the “fierce” independent, strong state, is stepping in with the same misguided philosophy that we are the prettiest cheerleader and no one will NOT want to date us. Sorry, but when our reputation includes lying and changing the rules, the wealth will remain in the ground, far away from the citizens in Alaska.
    But hey, China will sell us all we need. They have more oil and gas than they know what to do with now too. It only took a year, and they are swimming in it. Despite the US making this China energy boom possible, they will not send any thank you notes soon. But we’ll keep voting in the same kind of liars and disparage anyone who hints at thinking about America first.
    I am glad Corrie got to attend and discover our REAL reputation and how it is growing in the real world. It’s not good. This Alaska cheerleader may find out too late that her late-night escapades are now written on the bathroom walls. I hope it was a good time.

  5. Very “true” and “spot-on” narrative that really needs to be seriously understood by elected officials. If the current trajectory of this issue doesn’t change, all Alaskans stand to loose a lot.

  6. Corri resigned as AK Dept. of Natural Resources commissioner on June 14, 2022. Less than one year is the president of Terra Pinium LLC and appointed on the AEMC Company’s [formerly known as Millrock Resources Inc. (TSX-V: MRO, OTCQB: MLRKF)] board of directors. 2021 MILLROCK: Consulting, directors and salaries
    137,236 plus stock see ‘https://www.millrockresources.com/corporate/financial-statements

    *This Anchorage-based consulting firm specializes in communications, regulatory issues, permitting, land use and project planning in resource development with particular focus on mining and petroleum.

    1) May 2, 2023: Alaska Energy Metals Corporation (TSX-V: AEMC, OTCQB: MLRKD) (“Alaska Energy Metals” or the “Company”) is pleased to announce that Corri Feige has been appointed to the Company’s Board of Directors.

    Restriction on Employment After Leaving State Service (AS 39.52.180)- For two [2] years after leaving State service, a former public employee may not provide advice or work for compensation on any matter in which the former public employee personally and substantially participated while employed by the State.
    This prohibition applies to cases, proceedings, applications, contracts, legislative bills, regulations, and similar matters. This section does not prohibit a State agency from contracting directly with a former public employee.

    You be the judge on whether being on the board of directors (less than a year after resigning) for Alaska Energy Metals Corp. is in violation of the above and whether or not the State of Alaska A.G. actually cares enough about it to pursue it.

    • Since you obviously know the law so well, we all must assume you left out the part about being able to request a waiver from the attorney general. Why would you have left out that part of the law? Why would you not have the decency to presume or even inquire about whether Ms. Feige went through the normal process? Because you are a propagandist who is trying to discredit her by providing half the information. Now we know all about you.

  7. This is true. A feasibility study I prepared for a mining project was recently presented to two venture capitalists in London. They laughed and said they would rather invest in mining in Uganda, as it was less risky. The one to two decades required to finalize permits is an issue, but the risk of the EPA killing the project, after the investment had been made, was intolerable.

    • Obviously, Uganda has a corrupt government with no environmental policies, or tourism

    • No sane and ethical businessman would set up shop here.

      When you can’t begin to project expenses due to ever shifting political whims locally and federally, establishing a viable budget is impossible.

  8. Yes. And more and more small businesses and people are moving because of it. Oil and mineral support companies are leaving too. Just think: no real jobs for our young people. Local government have started taxing our seniors out of their homes. Crime is rampant. Many many people are choosing to leave.

    • Which is the lefts endgame. Run off anything not governmental except the serfs necessary to support them.

      Fewer people, less opposition, more for the chosen allowed to remain.

  9. Our brilliant tax and spending policies have led to negative GDP Growth over the last 10 years. Oil companies telling Alaska we tax too much and change the rules too often are standard talking points with only the State, or Country name interchangeable. Maybe investing in Venezuela, Iran, or Russia is better than Alaska with the lowest fossil fuel tax rates in the US?

  10. When our current oil tax scheme was put into place in 2013, the one dubbed “More Alaska Production Act” by then Governor Parnell, the oil companies promised it would result in 1,000,000 barrels a day through the pipeline.

    Per Alyeska Pipeline
    2012 547,866 BBLS per day
    2022 483,415 BBLS per day

    We have given the oil companies about 12-15 billion dollars since on their promise that more throughput would mean more revenue to the state. That has not happened.

    Remember that MAP only passed by two votes with 2 votes from legislators that worked for ConocoPhillips after they mutually allowed each other’s recusals for conflicts of interest to be excused.

    If there were 1,000,000 bbls per day going through the pipeline and Alaska switched up the tax scheme, then yeah, we’d be baiting and switching. But there isn’t and we are literally being bent over the barrel.

  11. What pathetic, whining impotence.
    .
    Yes, you read that right.
    .
    Impressive, no? 30,000 major global-energy conferees can’t figure out how to buy or lease just 60 legislators to help run their “renewable energy” scam.
    .
    For some unfathomable reason, Corri Feige’s people can’t seem to imitate what China Bill Walker’s people do routinely, indeed have raised to an art form: acquiring whatever they want through proxies, debt traps, Black Rock, regime change, whatever wins for them.
    .
    To Corri Feige, may we suggest not unkindly, pack your bags, go right now to other places in the world to develop your energy-transition scam.
    .
    And let us know how it goes when you find out the Walker-Xi team bought those places –and their governments– long before your 30,000 major global-energy conferees ever thought of showing up.
    .
    Bon voyage, cherie…

  12. I can hardly believe that I’m reading such an article in MRAK. Never before have I read such a clear, concise, and correct summary of the state of oil/gas taxation in Alaska.

    Over the years, a deep sense of entitlement has developed in the population, where ever-larger PFDs are demanded, and a (nearly) tax-free personal taxation environment is expected. And in order to achieve these goals, people are willing to eviscerate the State budget, and to drive out the oil industry goose that lays the golden eggs.

    Once again, the Curse of Oil has struck, and this time, with a particular virulence.

  13. Trust is given once, but it has to be earned the next time around and some lessons in life are hard! When we take God out of the equation be it business, government or our own lives, we will have hard lessons to learn. It is up to us, the people, the make this change and soon or we will reap the consquences.

  14. We don’t need no stinking oil or mining companies, we can burn wood, catch fish, shoot moose and caribou. Who needs electricity, that’s for city folk, carrying water from the creek ain’t that hard. Folks lived here for thousands of years like that, ain’t that right Mr. Rast?

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