As the Alaska State Legislature inches closer toward passage of controversial oil tax reform legislation, citizens across the state are letting their voices be heard on the matter. Kenai Peninsula residents got a chance to do just that during a committee meeting Monday.
The Alaska Senate passed Senate Bill 21 March 20th by a narrow 11-9 vote, sending the bill to the House for further tweaking, debate and testimony. The House Resources Committee is taking a closer look at the bill and invited members of the public to testify on it during a meeting Monday afternoon.
Homer resident Brad Faulkner testified that he is against the bill in its current form. Faulkner said he thinks the state stands to lose more from the bill than the legislature is letting on. He also said he thought there was plenty of untapped oil in the existing Prudhoe Bay fields that oil companies could tap if they wanted to.
"There's a huge pool of oil sitting just of the eastern shore of Prudhoe (Bay) that's never been tapped," said Faulkner. "They've warehoused 600 million barrels of oil for 35 or 40 years and now we're going to give them a tax break to develop it? As a lifelong Alaskan, that doesn't sit well."
Representative Dan Saddler of Eagle River pressed Faulkner on where he got his information about un-produced fields on the North Slope. Dissatisfied with Faulkner’s answer, he called his claim an “unsubstantiated allegation.”
Kevin Walker is also from Homer and is also against SB 21. He noted that the Trans-Alaska Pipeline has already outlived its 30-year life expectancy by about five years.
"Why rush getting $110-barrel oil out of the ground now when if we wait 10 or 20 or 30 years, it might be worth $2,000 a barrel?" asked Walker.
The Resources Committee also heard public testimony from the legislative information offices in Petersburg, Ketchikan, Fairbanks and Anchorage. Several people testified about numerous facets of the bill; some in favor and some not.
Rachael Petro is the President and CEO of the Alaska State Chamber of Commerce. She testified from Anchorage, saying the state chamber – along with 13 other statewide chambers of commerce, including Kenai – have made oil tax reform a top issue for the last three years running.
She said Senate Bill 21 is a good start toward making Alaska more competitive with other oil-producing regions of the world.
"We can't change our arctic climate, our high labor and logisitical costs but we can and should consider these factors as Senate Bill 21 is crafted," said Petro.
In his weekly newsletter Monday, Homer Representative Paul Seaton wrote that he is concerned about a new section of the bill – introduced Friday – that specifies the Corporate Income Tax that oil companies pay as the source for a community revenue sharing program. Seaton says he thinks that could mean a higher liability for the state if and when oil prices dip to low levels.
After two hours of testimony, the committee ran out of time with 17 more people signed up to testify. Saddler promised that the committee would reopen testimony Tuesday morning at 9 a.m.
Members of the public can testify via telephone at the LIOs in Kenai or Homer. You can view the committee hearings online at the website 360north.org.