Today was a day of endorsement-hedging. U.S. Sen. Lisa Murkowski declined to say who she’s supporting in the governor’s race, and gubernatorial candidate Bill Walker, a Republican who is running as an “unaffiliated” candidate with Democratic blessings, as well as with the endorsement of Sen. Mark Begich, declined to return the favor.
Jon,
It seems you do not understand the problem well enough to know where you are missing key points. You have not answered the key questions posed with the kind of specific answers they really require.
Parnell completed NO audits under ACES. You simply can not state that SB-21 brings more revenue than ACES because it is quite obvious that the producers have deliberately (and falsely) inflated the costs under that system. If you apply the costs as they existed in the first years of ACES (as a basis) Alaska is losing billions under SB-21 compared to ACES.
You need to look at the GVR provision that applies to fields developed from 2003 on- ward. We get no severance revenue. There is no doubt the producers will apply every credit that they can- whether they are legitimate or not. Why not? Parnell does not audit his former employers.
Jon, about $19 billion dollars worth of oil is taken from Alaska each year. If Alaska was taking the percentages you describe, then we would have about $10 billion in revenue, no deficit, money to put into savings. (Further, you have no idea what the feds are taking unless the federal returns are released- and I’ll bet you have never seen those.)
Your response is typical of many legislators. The industry has spent a lot of time and money to ensure you can not see the forest for the trees.
Again, you need to do some basic research. Calculate the number of barrels in all the fields that have had development since 2003. That is the free oil (no severance) and a negative NPV for Alaska. Hint- the value of the oil we’d give away under SB-21/GVR is worth more than the corpus of the Permanent Fund at today’s ANS prices. And that, Jon, is unconstitutional- just as was ELF.
Supervoter Man, you’ve proven you’ll say anything – no matter how out of context or misguieded you maybe – to paint Bill Walker as a flip-flopper. Or maybe you’re just Supergood at copying and pasting Parnell’s press releases. Good thing I can copy and paste too! Here’s Parnell’s flip-flop list. And let me be clear, Bill stands firm on his convictions and his beliefs. You are taking soundbites and mashing them together to create a fictional contradiction. I guarantee you can not vouch for their accuracy. The list below is Parnell’s RECORD. There’s no denying it.
He was for ACES before he was against it.
He was for AGIA before he was against it.
He was against paying down pension debt before he was for it.
He was against tribal recognition before he tepidly went along with it in limited instances.
He said was a fiscal conservative — but signed off on the biggest budgets and deficits in state history.
He said we had a natural gas deal four years ago (last gubernatorial campaign he repeatedly claimed there are “willing buyers and willing sellers”) but now is promoting another election-season deal (the Parnell PR machine is in full swing stretching the truth about the imminence of Alaska gas sales to Asia).
He opposed increases to the base student allocation before acquiescing to an increase less than the rate of inflation.
Lynn.
It’s not buyers remorse you are hearing. It is concern that Bill Walker will screw everything up because he has said that he will change the contracts and the law if elected. We have a structure in place. We are moving forward. There is tremendous momentum. Johnson, Hawker, and others expressed concern that the election will derail this progress.
Did you also hear Steve Butt explain why this project has a chance of succeeding?I did. He went on at length about the tremendous opportunities and the tremendous challenges. I hope you heard the part about the opportunities and what is being done to address the challenges. I also hope you heard the part where Steve explained why you can’t just start building this project, which is apparently what Walker wants to do.
In any event, we have parnell’s approach which caps our equity stake at 25 percent and allows us to partner with the leaders in the industry. Or you can go with Walker’s approach – unless he has changed his position again – that will somehow get the state a 51 percent stake in the project, which increases our exposure and risk and costs. Walker, again assuming he hasn’t changed his mind, does not explain how he is going to pull this off. I find that very frightening.
Stockholder,
Thanks for the questions. Before answering your questions, I wanted to point out that we are getting more revenue under SB 21 than we would have under ACES because spending is up and prices are down. Two reports have recently been issued establishing this fact. The Berman ISER report and a recent report issued by DOR. Now to your questions:
1. The state does get severance tax revenue on new fields. The effective severance tax rate on new fields is about 10-15 percent depending on whether they qualify for the additional GRE for leases, which applies to leases with higher royalty rates. The total number of barrels is very small.
2. We aren’t NPV-negative with new fields under SB 21 if you include all of the revenue the state receives from production – royalties, production tax, property tax, and corporate income tax. Moreover, the Goldsmith report that Les Gara relied on used an 8 percent discount rate. That’s pretty generous. In any event, if you were to keep reading the Goldsmith report you would discover that the outcome IS WORSE UNDER ACES – that is, we are worse off under ACES from an NPV standpoint with new fields because of the tax credits. Why didn’t Les tell us that in his opinion piece? Very strange. In any event, whenever you combine a net tax system with generous tax credits, which is what both SB 21 and ACES do, you run the risk of being NPV-negative IF you only count production tax revenue. The bottom line is that we are worse off from an NPV standpoint under ACES for new field developments because ACES has more generous tax credits.
3. Costs have gone up. Nobody knows why. Perhaps the industry is cooking the books. If so, why didn’t they do that under ACES – the same deductions applied. If they wanted to lower their tax rates, they could have manipulated costs and reduced their tax bill. In fact there was more incentive to do this under ACES because you could spend down your tax bill. So are you saying that the industry was on its best behavoir under ACES and then manipulated costs under SB 21? Why? I’d also point out that costs in the oil industry have been skyrocketed across the globe. Why should Alaksa be immune from cost increases?
4. The state gets abotu 45 percent of every barrel when you combine total government take. The feds get about 20 percent. The companies get the rest. This exceeds the amount Hammond said would be a fair share – i.e., the state is getting more than 1/3. SB 21 is the second highest tax regime in the state’s history. Under your logic, PPT, ELF, and the gross tax systems were unconstitutional. Do you even know what the severance tax was at statehood? 1 percent. It was raised to 2 percent after the Fairbanks flood. Do you know what the current tax system, which Les Gara, Hollis, and others put into law, is for Cook Inlet oil? ZERO. That’s right, we don’t have a severance tax on Cook Inlet oil and we barely tax gas. Does that mean that the Cook Inlet tax regime is also unconstitutional? What’s the state’s NPV on Cook Inlet developments where we have some very generaous tax credits and NO production tax on oil? Note, SB 21 did not alter the existing Cook Inlet tax regime.
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Regardin Dermot. The man is a hack. He doesn’t care about facts. I’ll give examples later.
Jon,
You have much to learn about oil and gas issues. Read Dermot’s work more carefully instead of pre- judging it. A reporter does not last decades, as Dermot has, if they are not very good at what they do.
With regard to SB-21, here’s some questions that will test your knowledge:
1. Under SB-21, Alaska gets NO severance on oil from fields developed from 2003 on wards. What is the total number of barrels of oil in these fields, and what is it worth? (I know the answers, this is a test of your knowledge.)
2. Why should Alaska suffer a negative NPV for these fields where WE have paid millions in investment tax credits?
3. Do you know the cost per barrel the industry is claiming, on average, for expenses? Further, do you understand that the inflated expenses have come after Parnell has refused to conduct audits for the entire time he has been governor? Last, do you understand why, without completed audits, that you can not claim with any credibility that SB-21 is better for Alaska. This is a patently false claim Jon.
4. Do you know the approximate value of the oil being removed from Alaska each year, and what Alaska is receiving for her oil?
If you can honestly answer these questions, then you will know why SB-21 is flatly unconstitutional.
We are awaiting your response, Jon.
Thanks.
Stockholder – a couple of points. Dermot Cole writes great articles that are informative, balanced and well researched – except when it come to oil and gas issues and this administration. Cole’s MO is to delegitimize this governor. His articles on the gas line and SB 21 are full of errors and omissions. Today’s article on yesterday’s hearing is a perfect example.
SB 21 is bringing in more revenue than ACES would have at today’s prices. This is just a fact. So please drop the unconstitutional giveaway crap. Oil prices must exceed $110 for ACES to start bringing in more revenue.
As far as I can tell, Walker doesn’t have a credible plan to get the gas line built. While can write the same oped 100 times and attend conferences, he doesn’t know what he is talking about – or he does and he is lying. You choose which one. If populist slogans can get a project built, it would have happened by now.
Parnell is certainly vulnerable and he is vulnerable because of mistakes his administration have made, but Walker’s lack of principle (see the post below capturing how he has changed positions in a matter of weeks) and the ease in which he misleads Alaskans concerns me.
Murkowski won’t endorse Parnell because she owes Mallott and Sealaska for their support in her write-in campaign. Deal’s a deal.
Response to Stockholder: I am a Democrat. My post wasn’t a comment on Walker. Wake up. Maybe you should read posts more closely before launching such missives.
That is about one of the most hypocritical, ironic and idiotic comments I’ve seen posted here FGW. Lisa Murkowski also declined to say which of the governor candidates she is supporting. What’s the difference? However, the “grossest form of political greed without values or principles” could just as easily be said about either Dan Sullivan actually, but Senate Candidate Dan in this instance. His family has poured over $750,000 of personal money to purchase this seat in a pre-conceived scheme hatched a few years ago by the national GOP just after Begich was elected to reward one of their biggest Ohio donors by buying a seat for ol’ Tommy Sullivan’s boy Danny. Then ol’ Tommy tried to hide some $300,000 of the $650,000 (that we know about) by misreporting the contribution he gave Karl Rove. Jeezus H people. Are you really going to let this guy take Alaska’s senate seat away from us? Selling your state out and your souls for the Party at all costs! It’s sickening.
Such vitriol from the Seanaco supporters tonight. They hate anyone who dares tell the truth, and is working to unite Alaskans. First, they take aim at Dermot Cole, one of the best reporters in Alaska. Why shoot at Dermot? For the same reason a News-Miner advertiser threatened to pull ads unless Dermot stopped reporting the truth.
So lets compare, shall we?
Bill Walker opposed the unconstitutional giveaway of Alaska’s oil in the SB-21 fight. Walker stood with the Alaska Constitution; Seanaco stood by the global royalists.
Bill Walker has been explaining patiently that Alaska needs a large diameter gas line for LNG export. Bill has been saying this for over 20 years. Seanaco has wasted many years, and many hundreds of millions “studying” a pipeline to the Lower 48.
Bill Walker was born in Alaska. Seanaco was born in California.
Bill Walker showed up for 14 debates. Seanaco was afraid to debate, and only attended three of the last 14 debates.
Bill Walker has condemned the insane Taj Mahawker boondoggle. Seanaco has stayed silent.
Bill Walker has explained how in his roll in advising clients how important it is that everything be done to investigate cases of sexual assault. Seanaco waits half a decade to decide what to do.
Bill Walker actually supports the Permanent Fund. Seanaco has voted multiple times for legislation that would have reduced our dividends. (Seanaco was in the legislature before he sold himself to Conoco).
Bill Walker has met a private- sector payroll for thirty years. Seanaco never has.
Bill Walker would not have supported HB-385- a scheme that has made it MUCH more expensive for local governments to pay for PERS/TRS. Seanaco signed the bill and then lied about its impact.
Bill Walker would not appoint (illegally) out of state residents to set state policy. Seanaco did this twice.
Seanaco doe not deserve a de facto third term. He sucks too bad. The deficit spending of $7 million per day is going to empty our savings accounts and destroy Alaska.
Jon,
The statment “… that doesn’t happen anywhere else” is part of Mr. Butt’s testimony. I forgot the closing quotation mark.
Jon,
I have now listened to most of it. I certainly can understand why Steve Butt “stays awake at night” pondering this effort. At 3:14:27 he clearly identifies my concern and fear when he states: “One of the very different characteristics of this project is the State has participating equity. THAT DOESN’T HAPPEN ANYWHERE ELSE (Emphasis Added). Earlier he describes this project, not as a “Mega Project” but as a “Giga Project”. Well Jon, I am conservative enough not to want to be a parachute test pilot on a “Giga Project”, “that doesn’t happen anywhere else”.
I am appreciating the concern of the legislators and wonder if I am not hearing a bit of “buyer’s remorse”. Representative Johnson broached the extreme problem of legislative mortality when he commented that many who brought this project may not be in office or in positions of Government after January. Certainly that is correct over the life of the project. Kitimat is in trouble when a partner bailed and it only had two partners. AKLNG has four partners including a sovereign with conflicting motives to realize both income and affordable energy to Alaskans – the other three are motivated by profit and not a bit concerned about affordable energy to Alaskans.
Next, I heard that a significant amount of information relating to marketing and proprietary business data relating to the AKLNG gas will hence forth be only released to legislators who have signed confidentiality agreements. So I am now preparing myself to endlessly be told by the proponents that I am wrong but they can’t tell me why because they are privy to the “big picture” and I will just have to trust them.
Couldn’t agree more with my friend Jon K’s comment about Dermott. He use to be such a fine reporter. What happened? Is it his editors? Or what? Something is fishy.
Dermott is a good guy, however, his reporting fairness lately leaves something to be desired. Hopefully, he’ll find a path to greater objectivity soon.
I’ll be voting for Begich for senate. Young for congress. Care Cliff for governor.
Alaskans, liberal or conservative, would have to be menatlly ill to vote for Walker. He’s shameless.
There’s an old saying, that familiarity breeds contempt. It doesn’t take much in the way of familiarity to realize that Walker isn’t fit for public office under any banner or party.
Bill Walker proved one thing in the debate today in Juneau – – that he’ll say anything to get a vote, to hell with telling the truth. Here are several examples of Bill Walker’s flip-flops:
· Walker told Anchorage talk radio host Dave Stieren that the 16% budget cut would be made all in one year. He backtracked in Juneau, saying his massive cuts would be over time, and he didn’t know how long it would take.
· Walker told Great Alaska Schools he would introduce legislation increasing and inflation-proofing the BSA, but told Juneau’s debate listeners education cuts were on the table – and Medicaid, too.
· Walker told the Fairbanks Daily News-Miner he’s behind the Susitna-Watana project, but in Juneau, wouldn’t commit to the region’s Juneau Access Road, an economic driver.
· KTVA reported that Walker said he and running mate Democrat Byron Mallott will be “equals,” but in Juneau, said he’s the one in charge under the so-called “Unity Ticket,” and he’ll simply consult with Mallott as a “special advisor.”
· Walker said he’ll keep on the current course with Governor Parnell’s gasline project, but told the Associated Press he would renegotiate, and possibly scrap the deal entirely, calling it “fatally flawed.”
Mr. Willis, the question regarding their preference for senate is relevant and germane. It exposes the dirty deal of political power brokering. It shows that Bill Walker is a vacuous candidate, void of priniples and willing to say anything to garner favor and support. Just as he did with the Democrats. Today at the debate in Juneau, Bill Walker flip-flopped like a fish out of water. He looked like a liar and a hypocrite.
The notion of the Unity Ticket sounds okay theoretically; however, in practice it is nothing more than the grossest form of political greed without values or principles. Bill Walker quit his party, tossed his values and has already embarrassed himself by changing his story from one day to the next, one group to the next.
Hey Lynn, I hope you had an opportunity to watch today’s testimony on AK LNG. They provided a great overview of the structure of the project and on just how much work has been completed. Unfortunately Dermot Cole covered the hearing so you won’t learn anything about what was discussed. If you didn’t watch, you can catch it on gavel to gavel.
I will keep trying to view the debate. I am reading the articles about it now. With all the issues facing Alaska interjecting the US Senate Race into this debate forum was as germane as asking these two what our foreign policy toward the Middle East should be. If he wanted to bring up the US Senate perhaps the moderator could have been more specific about US domestic policy issues that impacts Alaskans and what do these two want for Alaska from the Senate leaving the audience to reflect on who might best bring them those policies. But,alas, Parnell was thrown a softball to hit.to placate some audience members.
Walker gave the correct answer to the question. The whole idea of the Walker/Mallot ticket is a tactic to appeal to the political center. The party is subordinated and, as a political independent, I appreciate that. The opposition was out maneuvered. The opposition sued and that didn’t work so now they will try any distraction including the old standby of name calling.
Walker is a total political whore. He and Begich are cut from the same cloth and should support one another. You can’t believe anything either of them says.