Understanding of terms critical to oil tax debate

This editorial originally appeared in the June 28 edition of the Fairbanks Daily News-Miner.

The debate over whether to repeal the oil tax law approved by the Alaska Legislature earlier this year and signed by Gov. Sean Parnell is fraught with points and counterpoints. One of those in particular requires a good bit of attention. That’s because it has to do with two phrases in the Alaska Constitution regarding how natural resources must be used for the benefit of the public. Both references are found in Article VIII, which deals with the subject of natural resources.

Here’s the wording:

Section 1. Statement of Policy

It is the policy of the State to encourage the settlement of its land and the development of its resources by making them available for maximum use consistent with the public interest.

Section 2. General Authority

The Legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State, including land and waters, for the maximum benefit of its people.

But what constitutes “maximum use” and “maximum benefit”? The Alaska Constitution goes no further.

Does it mean, for purposes of discussing the Aug. 19 ballot referendum on the oil tax law, that the new oil tax must have a clearly demonstrated near-term maximum benefit to the state and to Alaskans? That’s the argument advanced by some people who favor repealing the law.

But what about another interpretation, one that takes the long view? Yes, Alaska gives up some revenue in the short term under the new oil tax law, but the idea is that the Alaska will benefit in the long haul through increased oil production — and the accompanying increase in state revenue and direct and indirect employment. Certainly those are subjects worthy of consideration as a measure of maximum use and maximum benefit.

How to define “maximum use” and “maximum benefit” has been the subject of many columns and much discussion over the years.

But there’s no answer except that it’s what the majority of Alaskans determines it to be.

Minutes from the convention at which the Alaska Constitution was written offer no real insight into what the authors of the state’s guiding document intended, either.

The word “maximum, in the context of Article VIII, appears in the minutes of Day 56 of the 76-day convention in a comment on the convention floor by delegate Burke Riley, of Haines.

“We thought it desirable to include in the outset a statement of purpose, and we feel that shows the Committee’s basic thinking; the doctrine of putting all of our resources, both to maximum use while, at the same time, safeguarding the public interest in the avoidance of waste.”

Section 2 was discussed briefly at a few points the following day, Day 57, but the definition of “maximum use” and “maximum benefit” was not brought up.

So here we are, we Alaskans, left to sort out what it means.

Delegate Barrie White, of Anchorage, on Day 70 offered a comment about the natural resources component of the Constitution that perhaps can be applied from the pre-oil era of the convention to the tumultuous post-oil era of today’s Alaska.

“I think all of us are aware that the article itself could have been shortened, could possibly be less detailed, but balanced against that we have always kept in mind the newness of the subject to Alaska, the newness of the opportunity to deal with the subject, and the great problems that will evolve and the great opportunities that will evolve when we gain statehood.”

Problems and opportunities. That’s what we have today with encouraging the rejuvenation of the oil industry in Alaska and in deciding what is the best and greatest use of our oil.

It’s an issue that requires maximum attention.