Today Rep. Les Gara (D-Anchorage) called on the Governor to allow world class oil policy experts, who the Administration has on contract but has so far prevented from speaking, to consult with legislators, provide analysis, and provide their views on an oil tax policy that will work.
See pages 6 and the Amendment page in the attached contract. The two experts, Rich Ruggiero and Bob George, consulted on ACES and have ideas on improving that law. They have been hired by the Governor but cannot without the Governor’s consent, speak to legislators or the public.
“Silencing needed experts on the most important bill of the session values secrecy over good policy. We can’t let a bill that costs the state upwards of $6 billion and likely more in lost revenue, with statements from oil companies that it will not work, move forward to the detriment of Alaskans. By hiring Mr. Ruggiero and Mr. George, the administration concedes their work is valuable. We should hear from them and work with them,” said Gara.
Currently the state is facing a bill that one GOP Senate supporter calls a “crapshoot” and has produced no evidence it will work so he has nothing to “hang his hat on”. Juneau Empire, March 15, 2013 (article updated March 17), and Anchorage Daily News, March 14, 2013, respectively.
This is confirmed by oil company testimony that the bills before the legislature this year and last year won’t work.
In 2011, Rep. Gara asked questions in the House Finance Committee that got BP Alaska and ExxonMobil to admit that under the Governor’s bill they would do no new exploration in new fields, and ConocoPhillips said nothing different. The only new development from the three major companies is Point Thompson which ExxonMobil is developing because of a court settlement; and NPR-A which ConocoPhillips has moved into to develop under current oil tax law.
This year, ConocoPhillips’s Bob Heinrich clarified that substantial investments his company said it would make were not ones resulting from the new bill. He stated that ConocoPhillips was referring to investments that would be made under ACES, even if no new bill passed. That March 14, 2013 Senate Finance committee testimony is linked here.
Heinrich said, “At this point we are not in a place where we could say how much we would do differently if this bill passed.”
BP Alaska’s Damian Bilbao testified: “[W]e don’t feel that [SB21] goes far enough to attract the type of meaningful investment that’s required to make the future look different from the last six or seven years.”
Dan Sackers with ExxonMobil said it “does not make Alaska attractive enough.” The March 14, 2013 Senate Finance committee testimony is linked here.
Given that the current bill seems to be a giveaway, with no commitment of new projects, it is crucial for legislators and the public to hear from experts who can help the state craft a strong oil tax policy.
“The experts the Administration has kept silent should be allowed to speak. They are world-renowned, and familiar with Alaska. Silence from them will harm Alaskans. Input from these experts could help us avoid the fiscal cliff we are facing losses of up to $6 billion in revenue at a time that the state is already facing budget deficits, three years of school staff cuts, $8 million in lost funds for people with severe mental health problems, and a threatened huge draw on Alaska’s savings built under ACES,” said Gara.