The Fair Share tax initiative

The “Fair Share” tax initiative is another example of the anti-development crowd’s insanity. A repressive tax on the oil industry in Alaska is ill-advised at this time and place. Contra-productive is an understatement.

BP pulled out of Alaska. Why BP pulled out has more to do with EU politics than economics, because BP was being used to fund green projects and to pour money into freebies than to produce oil. BP is now trying to restore solvency in the face of the unrealistic feel good goals of the Queen, who owns the majority of BP stock. BP leaving Alaska has all but ended the cash flow to Alaska’s NGOs,

Even with the increase in economic activity in the CONUS, the oil rig count is down, because of low oil prices.

The Saudi’s have pretty much fixed their damage from the Iran drone strikes.

Without a world-wide economic recovery creating a demand for production or a direct military threat to the oil producers in the Middle East, the price of oil is not going to spike upwards any time soon.

Even the speculators have given up on inducing a spike in prices that might hang around for longer than a few days.

The Syrians and Turks going at it have not produced significant changes in price. Syria’s oil production is not significant, and there is no real threat at this time to the Saudi’s and the Emirate’s oil production.

The world economy is continuing to slow, the U.S. is the only bright spot.

The PRC is continuing its return towards a Maoist-style communist social and economic structure, with increasing repression, unemployment, and growing social unrest resulting from massive corruption. Xi’s strategy has been to increase the PRC’s military and economic influence throughout the third world and into Europe largely through a cynical plan to exploit the greed of the despot and the inability of those countries to repay the loans made for grandiose infrastructure projects. This is a double edged sword that will increasingly drain China’s monetary and military resources.

Deutsche Bank is in the red, Germany’s economy is posting quarterly losses in production and trade. Germany is the financial heart of the EU. And, now, the German economy is fraying.

The Norwegian Permanent Fund is leveraged to over 3 times its actual value, because of an increasing national debt load.

Russia’s economy is suffering, because of the price of oil and the reduction in the market for raw materials.

There is nothing on the horizon that says things will get better in the near future.

Alaska has yet to recover from the price drop in oil in 2014, and, now, in the midst of a recession, those opposed to oil production in Alaska want to raise oil taxes?

What activity there is on the North Slope results from the need to upgrade and to increase the transportation and conditioning infrastructure to deal with improvements in recovery (fracking) and the potential for new oil into TAPS from future ANWR development. This is an activity that can be put on ice, literally, after completion, if a new tax scheme is implemented with oil prices still on the low side.

So, what’s the portent for Alaska? It is what it is, and the portent is “Sucks” , if new taxes are the future.

Governor Mike Dunleavy’s balanced budget attempt to jump start a badly needed dialogue with the Legislature crashed and burned. Any cuts were made by the veto pen, not negotiation. Even so, the veto pen produced over 12% in cuts. However, the Legislature managed to mitigate those cuts by keeping our PFD from being paid by statutory formula.

There was no quid pro quo from the Legislature no matter the concessions made by this governor over the last year. That bodes ill for the chances this session of a serious discussion by Alaska’s government about achieving a sustainable budget that will attract business, not drive it out of the state.

Were ANWR to come online before any deal is made regarding a sustainable budget, all bets are off for any sanity coming to Alaska’s spending excesses that has been ongoing since the first barrel of North Slope crude headed to Valdez down TAPS.

Dunleavy is our last hope to achieve a sustainable budget into the foreseeable future. If there is nothing else, then there is the veto pen and Dunleavy will succeed in slowing the slide to fiscal disaster for as long as he is in office.

If this initiative passes, we can kiss any economic recovery good-bye.

Larry Wood is a 65-year resident of Alaska living on Lazy Mountain. Opinions expressed are those of the writer and not necessarily those of the Frontiersman or its parent company, Wick Communications.