SB 21.

It’s been...what? Six years now? We agreed to give breaks at a low PPB and take more at a high PPB-beginning at $70/bbl.

In exchange we would get...what? A million bbl/d or more thru the Pipeline.

SB 21 would take us back to the future!

The Republican advocates for SB 21 claimed that it would increase production—as if new oil production could overtake the natural decline in a massive field that peaked in the late 1980s!

Do you remember that debate?

Then Senator Hollis French was clear: the purpose of ACES was to increase our take from production and slow the rate of decline through incentives. It was NEVER represented as a means to REVERSE the decline of Alaska’s legacy fields.

But the Pro-industry Republicans built their SB 21 argument on the nexus of a FALSE premise: “the decline of North Slope production was BECAUSE of ACES.”

That was a lie.

Lying is something Americans have learned that Republicans are good at: but Alaskans NOW know this especially well. When it comes to SB 21, Republicans lied to the detriment of Alaska and Alaskans.

The newly installed President Pete Kelly was the Liar-in-Chief, leading the attack on ACES back in 2013.

Pat Forgey, writing in the ADN (back when it was a newspaper) reported the following:

“...The companies that operate on the North Slope say the aging oil reserves have been undergoing "normal field decline," most of which happened before ACES was adopted in 2007. But that's not how Kelly sees it: "When ACES was enacted, Alaska was producing about 700,000 barrels per day per year. Now we only produce around 550,000... "We either fix or tax system, or we suffer the consequences," Kelly said.” (Anchorage Daily News, April 9, 2013)

Mike Dunleavy was part of the Republican Big Lie operation v ACES as well. In the same article Forgey writes,

“Sen. Mike Dunleavy, another member of the powerful Senate Finance Committee, has asked why ACES was created in the first place. The tax structure was overhauled in 2006, but then was tweaked again in 2007, resulting in ACES...

... Was ACES created to raise more tax dollars for Alaska? Was it to punish oil companies for the oil tax created in 2006 during the taint of lawmaker-oil bribery scandal? Was ACES designed to increase oil production?...

... If ACES was to raise money, it may have worked, he said. If it was to punish the companies, maybe that worked, too. If it was to increase production, then ACES wasn't successful” (ibid)

Remember Sean Parnell’s li’l chant at the time: FILL THE PIPE, FILL THE PIPE...

The airwaves were filled with a lot of Republicans drawling that chant. A once-respected ISER Economist took a big paycheck from the oil patch (and NORTHRIM BANK) to make a highly dubious case FOR the tax change. Where is SCOTT GOLDSMITH now?

Scott? Hello?

Of course the industry saw all this coming when they made the deal. Of course they knew it.

The industry pays an army of analysts and experts to build scenarios. They knew the center point of multiple scenarios including the in-scope “unks” and out-of scope “unks” and the “unk”-“unks” (as Donald Rumsfeld liked to say).

Alaskans ARE blessed with a coterie of lawmakers and career professionals who are shining stars and who DO advance the interests of Alaska. But they are a small group.

And they are no match for an Industry that is supported by a stable of experts with long career arcs advising a policy board & executive operation focused on measurable outcomes guided by a 20 year planning horizon.

And our “shining stars” are crippled by a predominantly Republican partisan environment that wallows in an attentional deficit compounded by ignorance, mediocrity and corrupt intent.

The maintenance of that corrupt and deficient partisan environment through the Republican Party of Alaska is rewarded richly by the industry via their community apparatuses and apparatchiks.

SB 21 is the apotheosis of that industry planning and execution.

Like the fictional Five Point Palm Exploding Heart Technique featured in Kill Bill, SB 21 delivered a fatal blow to Alaska’s revenue system from which Alaskans now fully feel the staggering consequences.

“A $28 PPB brings great wisdom to a dying revenue system”, Pai Mei (the Master of the fatal martial art) might well observe whilst stroking his long, white beard.

A former lobbyist for BP told me 4 years ago that BP was leaving Alaska. He said that he knew that when he worked for them over 10 years before. So BP has been moving inexorably away from Alaska’s declining legacy fields even as they participated in the charade demanding tax cuts for production.

Yet back in 2012 after the Senate gerrymandering by Sean Parnell delivered Pete Kelly and John Coghill to the Senate that passed SB 21, BP (along with the rest of the Industry) promised much in exchange for the death of ACES.

Alaska’s Clear and Equitable Share had resulted in the generation of $17 B in surplus revenue in the several years that it was in effect.

SB 21 provided the claw by which industry “clawed back” some of that gain.

Now, with virtually no floor, as prices plunge to mid-1980s levels, we Alaskans can see it all so clearly.

The Big Republican Lie

SB 21.

Alaska’s heart is exploding

— Elstun W. Lauesen


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