The oil and gas industry faces strong federal headwinds. Alaska shouldn’t make it worse

Like a reoccurring nightmare you can’t wake up from, oil taxes are being debated in Juneau again. Stop us if you’ve heard this before, because frankly, you have. We all have. And we are tired of it. Oil taxes have become the lazy, unimaginative solution to solving state government’s problems, as if squeezing the state’s most important industry will make serious fiscal problems magically disappear.

First, the fact that a few Alaskan policymakers are even entertaining the idea of going after our oil and natural gas industry partners is almost unbelievable under the circumstances. Decisions made by the Biden Administration have erected huge barriers for Alaska resource development: attempts to cancel ANWR lease sales, put oil-rich federal lands off limits, raise federal taxes, and otherwise slow down or even stop development are depressing and well-documented. As Governor Dunleavy said in this State of the State speech, “No state has been targeted more by the current administration than the great State of Alaska.”

Worse, the Biden Administration is calling on organizations like OPEC, foreign nations in the Middle East, and Russia to pump more oil to make up for the loss of oil production here in the U.S. It is beyond frustrating, even maddening, to think that Alaska’s oil sits below ground because of federal policies while bad actors overseas call the shots.

In this environment, why would Alaska leaders decide to make it harder to produce our oil? At least one bill aiming to increase industry taxes in Alaska is being discussed in Juneau this legislative session. This is the exact wrong approach; given the tsunami of challenges Alaska’s industry is facing on the federal level, we should do everything we can to make it possible, even easier, to invest in Alaska. As conservatives, we know that hiking taxes on any business is bad policy, and increased taxes on the oil and gas industry will have bad outcomes for Alaskans, who still very much rely on oil and natural gas to fuel our economy.

Alaska is no longer the only game in town when it comes to oil and gas. We used to come in second behind longtime rival Texas in oil production. Not anymore. The shale oil revolution created competition for investment in Alaska and now our oil and gas industry partners must make the case for drilling here instead of places like Texas, North Dakota, or New Mexico. Alaska is already experiencing prolonged workforce reductions, and we cannot afford any more. Why we would raise taxes when we should be creating an environment for more jobs, especially when so many oil and gas workers can choose the Mat-Su to live and raise their families.

What should bother Mat-Su voters the most is the fact that voters’ voices are being drowned out by tax-and-spend legislators in Juneau. During the last big oil tax battle, Mat-Su residents were not fooled by false rhetoric of the 2020 ballot measure that would have dramatically raised oil taxes. Statewide, 57% of Alaska voters said no. Here in the Valley, we rejected the ballot measure by a wider margin than any other region of the state, at 70% no. This sent a loud and clear message: taxes are not the answer. We should expect our elected representatives to honor our wishes and follow the lead of a large majority of voters.

The state will not solve its fiscal problems by increasing taxes on the private sector. In a tale as old as time, government will only grow at the expense of private enterprise if more taxes are imposed. Instead, a steady, predictable business climate will lead us back to a healthy, post-covid economy. Knowing that, we must ensure Alaska remains a good place for all companies to invest and operate, including oil and gas companies. We have no control over the Biden Administration’s attempts to shut down Alaska resource development. We do, however, control how Alaska responds. Governor Dunleavy said it best himself during the State of the State a few weeks ago, “Good policy that encourages business works.” We encourage our state leaders to choose jobs, economic growth, and future prosperity by keeping Alaska competitive.

Colleen Sullivan Leonard is a member of the Wasilla City Council. Jesse Sumner is a member of the Mat-Su Borough Assembly.