Killing the Golden Goose

Today’s lesson in the politics of envy (the fundamental principle underlying every single democrat political campaign and governing style) is the analysis of three bits of news over the last week or two.  The news concerns the oil patch, that piece of the economy Governor Walker, his bag man Robin Brena, the unions, greens, Alaska First, Backbone and related rent-seeking strap hangers have done their level best to destroy.

Here are the stories:

On the surface, these bits of news are all great, as they support the fundamental goal of more oil through TAPS.  The Smith Bay prospect alone is good for 200,000 bbl / day through TAPS, nearly a 50% increase in what we are seeing flow today.

The bad news is that according to Super Dave Stieren, Caelus Energy announced a couple weeks ago they were putting the project on hold due to the uncertainty over production and exploration taxes / tax credits from Juneau.  This uncertainty is typified by the “screw them all” mentality of the usual suspects listed in the first paragraph of this piece.  Les Gara’s most recent screed in Alice’s fish wrapper defines the problem those of us who want to develop resources and put people back to work.  https://www.adn.com/opinions/2017/06/08/senate-leaders-put-oil-company-profits-first/

The comments break down as expected, with the politics of envy types and pro-development types going after one another hammer and tong.  The envy side defines itself by one commenter who claims that Robin Brena proved that the oil companies have screwed the State of Alaska out of tax revenue for decades and by inference, it is long past time to get even with them.

The problem is that all agreements between the State and the producers were made by the political apparatus at the time.  They were generally non-partisan in nature, as democrats and their supporters believed until the last decade or so that it was not wise to strangle the income stream into the state treasury, the golden goose.

Not so today.  Why the change?  Probably because they think the $60 billion Permanent Fund is big enough, and they are targeting it for plunder.  The thought that they are systematically chasing jobs out of the state never seems to cross their minds.  And it should, as their greed and envy aimed at the producers are taking place at a time when there is a worldwide glut of oil and natural gas, and there are far better business climates for the producers to operate in than Alaska, with its current wildly unstable taxation and regulatory environment.

We Alaskans stand on the precipice and will have to make a choice for our future.  We are about to see an administration that will open NPR-A, ANWR, and the offshore fields of the Chukchi and Beaufort Seas to oil exploration and development.  Each one of them holds perhaps as much oil as The Prudhoe Bay fields held 50 years ago.  Each one of them presents the possibility to keep oil and in turn revenue flowing through TAPS and into the state treasury.

But if Governor Walker, the democrats, and their envy-filled supporters get their way, we will have chased the producers out of the state right at the point in time when we can drill the three remaining known high volume fields on the North Slope.  And if the oil doesn’t come out of the ground, nobody will make a dime off it, regardless of whom it belongs to.

We will have killed the golden goose.  And for what reason?  Envy?  Greed?  Getting even?  And to what end?

Alex Gimarc lives in Anchorage since retiring from the military in 1997. His interests include science and technology, environment, energy, economics, military affairs, fishing and disabilities policies. His weekly column “Interesting Items” is a summary of news stories with substantive Alaska-themed topics. He is a small business owner and Information Technology professional.

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