David Williams: Devastating Alaska’s oil industry won’t help taxpayers

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By DAVID WILLIAMS | TAXPAYER PROTECTION ALLIANCE

Alaska is at a crossroads. The state is facing a challenging budget situation that has been exacerbated by inflation, Covid, and the Biden Administration’s failed economic policies. Which road it chooses now will determine its economic future. One road leads to renewed prosperity. The other leads to more economic pain for consumers and taxpayers.

The Taxpayers Protection Alliance has seen successful models for how to grow a state economy out of fiscal challenges. TPA has also seen how bad ideas can make a difficult situation much worse. 

A state like Alaska doesn’t always want the advice of groups from the Lower 48 states.  However, the currently proposed 40% tax on oil and gas production in Alaska is one of the most extreme examples of a disastrous idea for any state’s economy.

On paper, this tax hike might raise substantial revenue, but in the real world it would backfire and create economic and fiscal devastation. At a time when the oil and gas industry is under daily assault from the Biden administration and green activists, Alaska’s energy industry would be driven to other states and countries. The jobs, businesses, and revenue it generates – including threatening the future of critical oil drilling projects like Willow and Pikka on the North Slope – would go along with it.

Worse, the proposed tax hikes unfairly target small and medium-sized businesses that are the backbone of Alaska’s economy. These companies have been particularly important to Alaska’s economy in recent years because they are less susceptible to pressure from outside environmental groups.

As larger corporations have pulled back from Alaska to avoid attacks from activists, these small and medium-sized businesses have increasingly picked up the slack and powered Alaska’s economy.

It makes no sense why Alaska would consider this act of self-sabotage. Extreme environmental activists are working to capitalize on Alaska’s budget problems and deal a major blow against energy producers in the state, eliminating critical Alaska jobs in the process. With the Biden Administration already doing their bidding at the federal level, states like Alaska are the last refuge for responsible energy production.  

Gov. Mike Dunleavy is building a legacy as a real conservative and a more than capable governor. Rejecting these tax hikes would be in keeping with this legacy. One reason why Gov. Dunleavy became the first Alaska Governor in 25 years to win re-election is because he kept his word not to raise taxes on Alaskans without a statewide referendum. Voters typically reward politicians who keep their promises. Energy independence, especially with geopolitical threats from adversaries like China and Russia looming, is as important as it has ever been. Gov. Dunleavy has championed these efforts. Now is not the time to abandon those principles.

Many political leaders – including conservative and moderate Democrats – are standing up to reject these reckless tax hikes. They should be applauded for their willingness to put Alaska first despite the overwhelming outside pressure being exerted on the state.

Alaska’s energy industry has been a critical part of its economy for decades, and it will continue to be so for years to come. The state has abundant natural resources that provide good-paying jobs, support local businesses, and contribute significantly to the state’s revenue. A tax hike on oil and gas production will only serve to weaken Alaska’s economy, harm its citizens, and hinder America’s energy security.

Alaska’s leaders must reject these reckless tax hikes on energy production and focus instead on strengthening Alaska’s energy economy, encouraging the creation of good paying jobs, and protecting America’s national security. This approach will ensure that Alaska’s energy industry continues to thrive, even in the face of challenging economic times.

With the war on energy harming Americans every single day, the last thing needed is more states piling on, too – especially energy producing states like Alaska. 

David Williams is the President of the Taxpayers Protection AllianceThis column first appeared at Real Clear Energy. Top photo copyright by Rob Bussell.

9 COMMENTS

  1. Why would anyone or any industry want to pay more when there’s still a Billion left on the table to steal from the people, by taking the PFD???

    The top 20% want anything but an income tax. Oil companies don’t want anything to change.

    I want a flat tax on oil. Forty plus years I’ve been listening to the same hogwash from the oil industry. All of their talking points are generated because we allowed lawyers and accountants to write contracts with so many variables that it takes an army of employees to figure out what’s owed the State.

    How about we just charge something like 15% at the point of sale or as it enters TAPs, eliminate all the yearly arguments, fire a building full of lawyers and accountants and clear out the army of lobbyists in Juneau?

    I’m looking forward to the day an army of lobbyists descend on Juneau and argue that a simple stable tax is detrimental for development.

    Betting that lobbyist group will all be former State oil attorneys and accountants.

  2. Destroying the oil industry has nothing to do with “helping taxpayers”. They just want to do it.

    Our legislature rarely, if ever gives a damn about taxpayers. Unless they are government workers or union members.

  3. The checkbook needs to be taken from the legislatures and we the people should give them an annual allowance to spend.

  4. show me one “environmentalist” that doesn’t use a vehicle to get around to protest oil and minerals needed to produce what gets us all around. In communication through phones and the internet which requires minerals. Do they just walk and talk? They don’t use any of these resources, to communicate their next attack…. right? Whats that old saying? Oh yeah, calling the kettle black. oops, now I’m a racist.

  5. Both, the State of AK and the Municipality have systemic and fundamental problems:
    … 1) Spend way too much.
    … 2) Ineffective and Wasteful, focused entirely on self-serving initiatives.
    … 3) Bloated Governments with way too many State & Muni employees.
    … 4) Lack of true Leadership and Moral Direction.
    … 5) Conservative Voters need to “LEAD” at the polls, casting ballots for true conservative candidates.

    Solutions:
    … A) Kick the Bums “out-of-office” and furlow 30% of the employees.
    … B) Cut the Budgets of every Agency by 30%.

  6. Yawn, been listening to the doomsayers for 40 years, the drivel from these outsiders seems to never cease.

  7. Stolen Elections have consequences!!
    Water boiling enough?? Get rid of Dominion machines, Mail in voting, Rank Choice voting.

  8. My question is why do these tax issues get decided in Juneau and litigated in Anchorage ? Lot of folks don’t like the production of oil ! So they want more money from oil for govt and it’s a twofer , kill the oil industry by taxing the crap out of it to fund a horribly mismanaged govt in Ak . Oil is the lifeblood of the Alaskan economy ! Just look around Anchorage where most of it is administrated ! They’ve built a robust healthy community with all this money !

    The question I have is why with 21st century technology are we only producing barely 20% of the North Slope production of the mid 80’s ? At least 5 billion barrels of recoverable oil in the ground on NorthSlope that beyond current reserves or production . That’s 500,000 barrels of oil production each day additional to current production ! The folks are getting cheated out of all that possible thru put ! That would at least double the permanent fund check each year for our residents . Just simple math folks !

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