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Alaska Governor Sean Parnell’s Big Oil Bailout PDF Print E-mail
Written by Thomas Dewar and Jeanne Devon   
Monday, 14 March 2011 10:02

“Each of us is entitled to his own opinion, but not to his own facts.”
—Daniel Patrick Moynihan

“I can hire one half of the working class to kill the other half.”
—Jay Gould, 19th Century Robber Baron

School kids from across Alaska recently took a trip to the Capitol in Juneau to beg for needed classroom resources.

ConocoPhillips just boasted a single year’s profits of $1.75 billion from Alaska alone, and insists it’s not enough, demanding more money from the state.

Guess which of these two groups was told “no,” and which has found a compliant concierge In the Governor’s Mansion? You probably already know the answer, but read on anyway, because you’ll learn other interesting things along the way.

Divide & Conquer 

In state capitals across the nation, a calculated strategy seeks to pit neighbor against neighbor, so some of the most profitable corporations in history can abscond with ever more money from already ailing state and local budgets.

Facts, it’s been said, are stubborn things. And from New Jersey to Wisconsin to Alaska, a particular brand of regressive and reactionary dogma is colliding face-first with facts that can be known and proven and ironically, can be supported by the former’s own data.

To fuel a reactionary “divide and conquer” strategy, Wisconsinites are being told that their governor is simply and reasonably asking those pampered state workers to contribute to their own retirement. “Bless his heart,” says Sarah Palin, “that Wisconsin governor is doing all he can to make his state solvent.” Nevermind that their pensions are already self-funded without a dime of taxpayer money. Nevermind that they’ve agreed to accept the financial concessions demanded by the Governor. Sometimes outright lies are what’s required to deflect attention from the hundreds of millions of dollars in corporate giveaways that broke the budget, and shift suspicion onto the working mom next door whose union contract provided her and her kids with a flamboyant amount of health care.

Which brings us to the backlash. Nationally, thinking people began to wonder why, after corporate America’s most profitable quarter in history, and executive compensation skyrocketing north to record-setting levels, was the unemployment needle still stuck just below 10%? If we just did what was good for big business, wouldn’t then (to borrow a Scott McAdams riff) “the capitalist fairy come down and sprinkle us with pixie dust?”

Not so much, it turns out.

Nowhere is this epic collision between facts and the common good on one side, versus rapacious greed and blatant, easily disprovable lies on the other, on more vivid display than in Alaska—the nation’s most resource rich state, whose residents nonetheless pay more at the pump than motorists in the Lower 48.
Governor Parnell now tells us the most pressing fiscal matter before us is to ensure some of the most profitable corporations on the planet receive additional breaks. Yes, even if those breaks come at the expense of those supplicating apple-cheeked school kids and their teachers. Even if, when pressed on the matter, the oil companies who supposedly need bailing out refuse to commit that their additional loot will actually lead to any more jobs or any investment in the state. “Just give us the money, and we’ll see how it goes,” we’re told. Would you gamble billions on those odds?

ConocoPhillips, mopping their sweaty brow from raking in a single year’s profits of $1.75 billion in Alaska alone, does not believe its share of Alaska’s resources is enough. As a matter of fact, they’d like to shift more of the state’s tax burden to you. Over the past 5 years, and overlapping with ACES (Alaska’s Clear and Equitable Share), Conoco CEO James Mulva has had to make do on $95.2 million in compensation. Poor baby. One can see how this would make him have a sad.

 If doing whatever was good for Big Oil’s bottom line was inherently good for average Alaskans, why then would this industry need to saturate the state’s airwaves with ads convincing us of it? Why spend that much to blackmail viewers with threats of the ad’s telegenic little girl growing up to find a dry pipeline? Because it costs more to make people believe lies.

The shady socializing of risk and privatizing of profit has been intuited by most Alaskans on a gut level for some time. We even thought for ourselves and voted for a little cruise ship tax despite a zillion dollar ad campaign telling us that nobody would ever come to Alaska if they had to add $50 to the price of their multi-thousand dollar cruise ticket.
But while the issue of oil taxation is more complex than a $50 cruise ship tax, it’s actually easier to grasp than the oil companies and their newly acquired legislators would have you believe. Enter Senator Bill Wielechowski.

On this week’s broadcast of Moore Up North, Alaskans were urged to use their common sense again.

“…and a youth shall lead them.” (Isaiah 11:6)

Facts are stubborn things and Sen. Wielechowski is, it turns out, a stubborn man. And this is a very good thing for Alaskans. From the stage of the Tap Root Cafe, the senator systematically dismantled talking point after talking point from the oil companies, and their lobbyists – including Governor Parnell.

Singular in their devastation of every false premise, assumption, and talking point by Big Oil and its advocate in the Governor’s Mansion were two graphs.

“Refudiating” the premise that Alaska’s tax climate is just too unstable and confiscatory to promote investment and economic growth, take note that the very companies spinning this line are currently investing in Russia, Libya (!) and other, significantly less stable regimes, with tax rates in the 90% range:

And the effective tax rate in the wild, unstable war-torn dictatorial hell hole of Alaska, USA?  About 30%. Yes, just 30%.

This might explain why a brand new player has entered the scene under ACES, making a big announcement just yesterday.

Spanish oil major Repsol announced it had acquired a 70-percent stake in several exploration blocks in Alaska, where it plans to invest around 550 million euros.

“This deal forms part of our strategy to incorporate new and high quality exploration sites into our portfolio,” Repsol chairman Antonio Brufau said in a statement released by the group. It is also “part of our strategy to balance our exploration portfolio with low risk assets through onshore opportunities in a stable environment,” he explained.

And then there’s Great Bear Petroleum, another company that has leased half a million acres of onshore exploration sites in Alaska, that also made the announcement this week. The President of Great Bear, Ed Duncan effused about the area which falls under ACES, “Alaska’s resource base is global in scale. It’s an international oil and gas player,” adding that Great Bear “is built around building Alaska back  to where it should be … where it was just a few short years ago. Not preoccupied with North Dakota or South Texas or the Northeast U.S.”

If you listen really carefully you can hear the sound of a talking point imploding.

Now to the correlation between tax rates for Big Oil and job growth in the state.  As you can see from the next chart, employment was it its low point at the very time of the zero percent tax rate. ZERO. But under ACES, job growth has climbed steadily north over a period of years.  And who created this little chart?  That would be Governor Parnell’s office.  There goes another talking point. >poof<

It would be interesting to hear the industry’s response to these damningly inconvenient facts, but we shouldn’t hold our breath for anything beyond the vapid, content-free spin, no longer distinguishable from overt extortion.

This is not a partisan issue. Former Governor Palin called ACES her “crowning achievement,” and was able to pass it with broad bipartisan support including Democrats who ensured the legislation would become reality. The Anchorage Daily News, furthermore, reports that Republican House Speaker Mike Chenault has doubts & skepticism about the proposed bailout for Big Oil. The ADN piece also reports the Speaker’s fellow Republican, Rep. Paul Seaton of Homer, is voicing doubts about the billions the state will lose:

Seaton disputed the main argument for the tax break—that it would encourage new drilling and other investments on the North Slope.

Drilling activity in years past has never followed changes in Alaska’s tax regime, whether rising or falling, he said. Investments follow oil company plans for field development, not tax codes, he said.

He cited recent proposals by an independent oil company, Great Bear Petroleum, that are       going ahead in Alaska without the incentive of tax breaks.

“The tax bill that we’ve got before us, none of that money is going to go there,” Seaton said. “The money is going to go to the current producers who have put not one plan of development, or accelerated development, on the table.”

Tea Party activists, hostile to corporate bailouts and crony capitalism, should likewise be with Senator Wielechowski on this one.

Here is the full broadcast of Moore Up North – must see TV for Alaska’s future. Contact your legislators and tell them you know ACES is working, and that the oil companies don’t need a bailout at your expense.


You can download the  Powerpoint slides here

and .pdfs here.

~Bill Wielechowski and Shannyn Moore on the set of Moore Up North

(Editor's Note:  This has been crossposted, with permission, from TheMudFlats.net.  Ask yourself if North Dakota's media will question the need for an oil company bailout in North Dakota when Ed Schafer's version of this scam shows up in North Dakota's bought-and-paid-for legislature in the coming weeks.)
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