Monthly Archives: March 2010

A Reaction While “The Concerned” Awaits a Reply …

Created by the Alaska Dispatch, “The Concerned” is, to quote the person who channels it, “a fictional, collective persona (based loosely on the Alaskan Zeitgeist) which petitions various people and institutions on behalf of itself. Think Star Trek’s ‘The Borg,’ then add a sense of absurdist humor. The Concerned’s oil and gas petitions, in particular, are based on the idea that Alaska’s simultaneous dependence on and mistrust of the oil industry is a paradox, as are the opposing corporate and government mandates in regard to the resource.”

In that vein, The Concerned recently wrote to the Alaska Oil & Gas Association, suggesting that the state’s oil industry provide “exploration certainty,” in exchange for “fiscal certainty.”  The following is a reaction to give The Concerned something to read, while it stands by the mailbox waiting on a reply.


Dear Concerned:

Your letter of March 18th raises an interesting question.  While I certainly am not the intended recipient – and can only speak for myself on these issues – I thought I would throw in two cents while you stand at the mailbox waiting for the real response.

Your letter suggests that, in exchange for “fiscal certainty” related to the state’s take of oil and gas revenues (presumably, at a level reflecting the pre-ACES levels), the oil companies in Alaska provide “exploration certainty.”

There are several challenges with “exploration certainty,” but one of the most significant is that, in the current environment, it leaves the companies at risk if, after giving “fiscal certainty” a try for awhile, the state again changes its mind, once the additional exploration investment has been made, and reverts to higher taxes the next time oil prices rise. Continue reading

Why AGIA Should Be Terminated

As Senator Stevens has said, AGIA should be terminated and Alaska should begin to focus on developing instate pipeline options.  I agree with that conclusion and participated last night in a discussion on AK Syrin’s talk radio show on the subject.  The following is a link to a replay of the show.

Its About Energy- Katcha KLOO Sunday Show 3/21/2010 – Syrin from Wasilla on Blog Talk Radio

It’s our oil… but it’s their investment

As the current legislative session heads into the home stretch and the electoral season approaches, Alaskans increasingly hear the slogan “It’s our oil (and gas)” as justification for various proposals and positions.

While the slogan makes for good rhetoric, it is important Alaskans keep in mind that, although it’s our oil and gas, it’s the oil companies’ money that discovers, develops, produces and markets, and — hopefully — will continue to explore for new resources. Without their investment, our oil would still be in the ground, and according to Scott Goldsmith of UAA’s Institute for Social and Economic Research, Alaska would look a lot like Maine, with high state income and sales taxes, no dividend, and a very small local economy.

Theoretically, the development of Alaska’s resources could have been handled differently. When oil was discovered in the Norwegian sector of the North Sea, for example, the government established and funded a state owned corporation (Statoil) that put the country’s money in the ground alongside private industry. While the effort required significant capital and exposed the government to substantial financial risk, the net result today is that Norway has an entity capable of taking the lead in exploring new areas if private industry is hesitant to do so. Some other countries follow the same model with varying degrees of success. Continue reading