Need for Leadership is Clear

Alaska’s current state budget is based on an average Alaska North Slope crude oil price of $77 per barrel.  So far this fiscal year, prices have stayed within a few dollars of that target. Production, however, is well below the 619,000 barrels per day (bpd) in the state’s forecast – with an average of 540,000 bpd in July and 459,000 bpd so far in August. These numbers highlight serious problems with our State government policies.

• The oil price required to balance the state’s budget gets higher each year because Alaska’s state budget has ballooned out of control and is not sustainable. The oil industry is carrying the primary burden of supporting state government, but government’s appetite for money is unlimited. When the oil industry can no longer feed that appetite, or is unwilling to continue investing in our state, state government will look to the Alaska’s businesses and its citizens to fill the gap.
• The administration and the legislature are not doing enough to stem the decline in oil production. Alaska’s state budget, and our economy, benefits not by high taxes on low production, but by the highest flow of oil through the pipeline. We have billions of dollars in assets lying dormant in the ground, yet our leaders continue to support policies that stifle investment in exploration and production. A barrel left in the ground gives us nothing – every barrel that is produced generates revenue for the State. ACES is a tax policy that is designed to harvest as much money as possible for state government in the short term without regard for the long term harm it does to the economy.
• The administration’s single-minded focus on the gasline, and AGIA, ignores reality. Oil is still the key to our economic future, and will be for many years to come. If and when a natural gas pipeline to the Lower 48 is built, natural gas revenues will not come close to replacing the declining revenues from oil.
• The administration’s adversarial relationship with the state’s largest industry is not productive. While this posturing may have populist appeal, it creates a negative investment climate that not only hurts the oil industry, but every small business and every citizen in Alaska that benefits from petroleum dollars circulating in the economy.

Alaska can’t afford the leadership vacuum that keeps these failing policies in place. We need to elect leaders who understand Alaska’s “Economics 101” and are willing to work with industry on a tax and regulation strategy that maximizes oil production.

Comments

[Regina]

Ok, so being an 3rd generation Alaskan and all, I'm not sure if I like your litlte game either. Rather than Alaskan Weirdness I would like to see the appreciation for the Alaskan Uniqueness . It is rare to find a original or unique personality these days. The lower 48 needs more of us to show them how to love life. ~