The industry that has been so good to this region is faced with peril.
Our oil and gas industry is suffering and it will take drastic measures to return it to good heath. Agrium has no gas supplies beyond October. That means this great company, which annually injects $374 million into our economy and supports 685 jobs and $42 million in wages, may shut down.
We don’t know if our LNG plant can survive its license renewal and we have to import oil to keep our refinery going.
What we need is a dramatic paradigm switch. We need to figure out what we must do to increase oil and gas production, not just here but on the North Slope.
We need to seize control of our future. To implement a taxation formula that stimulates the billions of dollars of investment we must have to fully realize Alaska’s potential. I look at Alaska’s reserves and shake my head. We have billions and billions of oil and gas in the ground yet our pipeline is running at less than half capacity. If we don’t do something soon, it sill shut down.
I admit that I have been taken back by some of the oil industry profits. But then I remember those years when oil sunk below $10 a barrel. The industry debt on investing the hundreds of millions of dollars needed to keep the oil flowing even though it was losing millions each day. It’s good that we have the good years to balance the bad ones because we now need an enormous capital investment to keep our future secure.
The stakes are great and I encourage my former legislative cohorts to proceed with caution to make sure we develop Alaska’s full potential. A barrel of oil left in the ground pays Alaska not a penny in taxes. I believe we all need Fiscal and Regulatory Certainty for this State to move forward.
Former state congressman,
Former Soldotna mayor and councilman
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