Support Senators who work to solve Alaska’s problems

To the editor:

Backbone formed in 1999 when BP attempted to acquire ARCO. The combination of BP and ARCO would have given BP a virtual monopoly on Alaska’s North Slope, leaving the state and its residents dependent on BP and negotiating from a position of weakness in terms of managing our petroleum resources. With merger support at that time from a Democratic state administration, we were on the verge of being controlled by Outside influences.

As a result, a bipartisan group of Alaska leaders saw the threat and formed Backbone. Through a media campaign, Backbone alerted Alaska’s electorate and got the attention of the Federal Trade Commission, which forced the divestment of ARCO’s Alaska assets before approving the merger.

Phillips Petroleum bought ARCO’s North Slope assets and eventually merged with Conoco to form ConocoPhillips. As a result, we still have three giants (BP, CP and Exxon) on the North Slope, instead of the virtual monopoly that would have otherwise resulted.

Today, the state of Alaska is at another critical moment in its history. Production is declining and Governor Parnell’s solution is to give the producers a no-strings-attached windfall in hopes of stimulating investment.

To increase their Alaska profits by $1 billion to $2 billion a year through enhanced oil production, the producers would have to invest several billion dollars in extra drilling and other costs. Alternatively, they prefer to achieve the same profit result by getting the Legislature and governor to roll back taxes $1 billion to $2 billion — just by investing a few million dollars on public relations, lobbying, charitable giving and campaign contributions. In other words, they can boost profits the same amount at 1/1,000 the cost if they secure the election of enough sympathetic legislators. The problem is that won’t actually produce any additional oil.

Don’t get us wrong. We want to encourage the oil industry to explore for and produce our energy resources. We want them to make ample profits, but not more than they need to in order to make reasonable rates of return, especially when it would imperil Alaska’s fiscal future. Remember, it’s our oil. Our tax structure may need to be fine-tuned and relaxed in order to encourage new exploration and production, but we don’t have to give the farm away.

The Big Three and the governor are working to defeat the Senate Bipartisan Working Group so the state can make a risky bet: that by giving producers a $1 billion to $2 billion per year discount, we will gain much more than it costs us.

A coin toss results in either a total loss or a doubling of your money. An even bet, but not a prudent one with money you can’t afford to lose. Stock investors expose themselves to perhaps a loss of a third of their portfolios in the hopes of doubling their money in five to 10 years.

In contrast, the governor and the House leadership would give away $1 billion to $2 billion of our revenue each year in oil price discounts, without any reasonable expectation that we would ever break even, let alone double it. That’s no investment. That’s not even a gamble. That’s a giveaway of our oil and our future, for nothing in return.

We will witness a massive effort by the oil industry and their friends to sway the upcoming elections. They will attack Backbone for being against big oil and jobs. Nothing could be farther from the truth. We want a fair taxing method that encourages investment and rewards all properly and fairly — not one that places our state’s fiscal future at higher risk than playing the crap tables in Las Vegas.

They will argue that this is a Republican versus Democrat issue and that Republicans who don’t toe the oil interest party line must be thrown out. We prefer the much more prudent and studied approach the Senate Bipartisan Working Group is taking with regard to our future. Wouldn’t we all like to also see such bipartisanship at the national level, too?

Alaskans come together when they feel they are threatened. Alaskans stand up and face difficult issues. Backbone supports the efforts of the Bipartisan Working Group made up of members able to work across party lines. They are standing tall and taking the heat from oil interests to help ensure that the state doesn’t turn from being an owner state to an owned state. We urge you to support those senators, Republican and Democrat alike, who have put aside party differences to solve Alaska’s problems.

Chancy Croft, former Senate president

Jim Whitaker, former Fairbanks North Start Borough mayor

David Gottstein

Bill Walker

Malcolm Roberts

Ira Perman