Think that's a joke? From where I'm sitting, it's not far from the truth.
Yesterday, I got into a discussion about resource development with a couple of "died in the wool" anti-everything types. I admire their dedication and their viewpoints, but they aren't so welcoming to anyone who attempts to provide a little balance to the debate.
So, let's think about what is really happening up here in Alaska. First we'll start with some basic facts which can't be disputed. The State of Alaska is, of course, the largest state in the union. However, only a small fraction (less than ten percent) is "available" for regular folks-also known as residents. The rest is firmly in state and federal hands. We're talking Denali State Park, the Arctic National Wildlife Refuge, and so on and so on and so on....millions and millions of acres. In addition, there are preserves, native allotments, and refuges dotting the maps, from the Aleutian Islands on down to southeast.
The State is mandated to afford a means for resource development-it's actually in our state constitution. The State retains rights to all mineral resources on all lands it "owns". The issue of wildlife resources has been fought back and forth in court for decades, with the State eventually conceding most control to the feds. With each erosion of the 10th amendment accepted by our legislature (such as the issue of navigable waters) the state loses a bit more oversight of our lands, waters, and the animals that inhabit the state.
In the past few years, the legislature has trotted out some great sounding plans, which turned out to be not so great. ACES (Alaska's Clear and Equitable Share) increased taxes on North Slope production a whopping 400 percent. Nope, not kdding. Because of this, Alaska now ranks as number one for the highest tax structure in the entire world. Yes, you read that right: Highest taxes in the world. Coupled with the most challenging and harsh environment for oil and gas exploration and production on the planet...well, it has consequences. In the three years since it's passage, drilling on the North Slope has dwindled to.....nothing. Can't say as I blame the companies....who would want to invest all that money when the state ends up taking 87 percent? Of course that meant a lot of jobs....but, no one seemed to care. It was all about punishing the oil companies and filling already overstuffed state coffers, so that other pet projects could be done.
Then there is AGIA. Former Governor Palin's idea, to get a third party involved so that there wouldn't be any funny business over who could and could not ship any gas in the future. I thought it was a bad idea at the start, with the state promising a foreign company a half a Billion dollars if the deal fell apart. So here we are, a couple years into this debacle, and we still don't know the results of the Open Season that were promised "after November elections". I am sure a few people in Juneau know whether or not there were any results, but the rest of us have no idea. Between the time the plan was first planned and then brought to the Legislature, and today....gas prices have plummeted, and don't show any signs of going back up. So we have many millions invested into another scheme which is not likely to come to fruition. There are two other competing plans, and they too, are having troubles getting any commitments. And why is that? Because it's darn near impossible to proceed with oil and gas development in the state.
First, there is very lengthy (and expensive!) permitting process to go through. You have to have umpteen agencies' approval, and it can be halted at any time by a $100 lawsuit from any environmental group. Or, like with Pt Thomson, perhaps the Army Corps of Engineers will shut down the project. (They refused a bridge crossing, costing the company several hundred million dollars in lost revenues and about four or five seasons of exploration time-and 800 jobs too) Now, companies are forced to fund their own environmental impact studies, and the results have to be acceptable to a plethora of agencies and groups. For Alaska, five to fifteen years has become the norm for attempting serious resource extraction of any kind. Eventually, most companies give up, between uncertain and punitive actions by our legislature, stupendous tax burdens, and the huge costs of court actions. They just vacate their leases (which they paid millions of dollars for) and go to some other place where actually doing business is possible. Thier duty is to their shareholders after all. So less and less is flowing down the pipeline every year, with no real hope of increasing production. The only reason the state is "flush" is because of a) The outrageous tax structure, and b) The current price of oil. No one seems to remember the years that oil prices were under $30 a barrel, and yet plenty of activity was taking place up north.
As far as the North Slope goes, I see it this way: While the bloated state payroll merrily plans to spend, spend, spend those oil royalty and tax dollars, the legislature is "fiddling while Rome burns". Instead of facing the coming challenges head on, they have managed to name a state dog (last year) and designate "Marmot Day" this year.
On other resource issues, the uproar over Pebble Mine, plans by Usibelli and another company to ship coal, and other projects are hotly debated and staunchly opposed. The opponents forget that these leases have been held for years in some cases. At present, there is no way to effectively buy a lease, and then NOT develop it. This goes back to the state charter and constitution, remember? In the Sutton and Chickaloon areas, local residents are up in arms about plans to resurrect coal mining there. Aside from the obvious (Hello, you knew there was a mine there when you bought the property) they are forgetting the history of the region. Those mines provided much needed jobs and kept many people warm for decades before their arrival. Those mines would provide some much needed employment today too, if allowed.
It's easy to get frustrated with people opposed to development, but they see the risks and I understand them. Loss of habitat, pollution, ruining the environment for years to come-all very possible. Do I want to see salmon streams sacrificed? No! Of course I don't, my family fishes and hunts like many Alaskan residents do every year.
More later...........
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