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Governor Parnell's Speech: Make it Meaningful


Dena'ina Center

Governor Sean Parnell
March 28, 2012

Thank you, Barbara Huff Tuckness. And, thanks to all the groups that brought us together again.

You all are a terrific testament to the spirit of our state, and to the confidence

that real Alaskans have in our efforts. As Governor, I promised we would unlock Alaska’s resources for Alaskans’ benefit. I set a vision for Alaska that we would once again produce a million barrels a day.

But some want us to lower our vision; limit our goals; and reduce expectations.

One legislator said something that should mobilize every Alaskan listening:

He said there is no way Alaska will reach 1 million barrels a day. He said it is not going to happen. Well…Alaskans, don’t live in a world of “We can’t.”

We live in a world of “Can do.”

WE live in a land where billions of barrels of oil are yet to be recovered.

WE live in a time where Alaskans can unlock this oil for our own benefit

and for future generations. So even though oil production trends downward,

there’s another trend line. And it’s going up:

More Alaskans are stepping up. Standing up. And speaking up …for responsible taxes that will lead to more oil production.

Many of you in this room took time away from your dinner tables, from your work day, to weigh in on this urgent matter. Many of you flew to Juneau. You waited patiently in LIOs around this state again this year to make your voice heard in committee hearings.

And what was the response? One senator said your voice doesn’t matter

because you work for businesses -- big and small. Trucking businesses, flooring companies, engineering firms, rental and expediting outfits, fabrication plants.

When did it become OK to smear people just because they work in the private sector? And, when did it become OK to vilify Alaskans who promote jobs and families in our great state?

Let me tell you that I’m proud of you. Proud that you’ve demonstrated your commitment to growing our economy, unleashing opportunity, and enlivening the dreams of more Alaskan families.

To you who testified— let me assure you. Your voice WAS heard…and YOU matter.

Kim Griffith testified before legislators and said: “I want my sons to have the opportunities I have had, my parents have had and my grandparents have had.”

Kim, Sandy and I want those opportunities for our daughters too, and we want that for every Alaskan.

That’s what this epic struggle is about— It’s about our future.

Will we claim those vast, untapped resources for Alaskans’ benefit, for our use

and our children’s use. Or, will they remain locked in the ground as the extremists want?

Karen Cowart of Anchorage testified: “Alaska’s tax policy is leaving Alaska’s oil in the ground.”

I’ve got to ask: Will we take control of our destiny as Alaskans, or will we act like the federal government and say—“uh, uh…not gonna do it,…no can do.”

Well, let me tell ya…Alaskans are better than that. Momentum is building across our state.

People realize:

  • That oil production is falling;
  • That production decline will become Alaska’s decline;
  • The urgency for change;
  • That tax policy impacts business decisions;
  • And, people understand what’s fair for the government to take,
  • and what hurts investment in our state.

This rally is important for many reasons. Today, we come together to take stock of how far we’ve come. And, we renew our strength for the battle ahead.

You are vital to this effort. Your efforts are strategic, and forward-looking.

You know that short term sacrifice, grows long-term Alaskan opportunity.

It’s about growing a legacy economy for us, for our children and grandchildren.

The year has flown by and the oil level in the pipeline keeps dropping. One might think we haven’t made much progress on tax reform. But we have!

You have a governor who believes in Alaskans. You have a House of

Representatives that acted in Alaskans’ interest by passing meaningful tax reform;

and more senators today compared to a year ago are committed to doing what’s right, and unlocking opportunity for Alaskans.

So while we’re at it, let’s acknowledge Alaska lawmakers among us. Will you please stand if you’re a member of the Alaska Legislature? Let’s applaud them for their public service.

Governor Knowles, good to see you again. And thank you for your recent op-ed piece that worked to pull us together. You spoke of coming together over a fair share and growing our economy. You cause us all to ask:

Should government really take 72% of the profit at $115 per barrel?

Should government really take 75% of the profit at $140 per barrel?

This is about our fair share as Alaskans and it’s about growing our economy.

What does responsible tax legislation look like? It’s legislation that unlocks Alaska’s wealth for Alaskans. It’s legislation that sparks investment and drives production increases.

HB 110 met those standards. Indeed, the fair share government take under HB 110 is about 66%. In exchange, companies pledged at least $14 billion in new projects.

Both ConocoPhillips and BP committed over $5 billion—And, Armstrong pledged another $9 billion in projects on currently undeveloped state land – all if the state makes meaningful changes in our tax regime.

That is $14 billion in new investment in exchange for meaningful tax reform.

And that’s just the beginning. With a competitive tax environment, The laws of economics say that if $14 billion in new investment comes, more will follow.

As business people— especially those of you with empty fabrication shops—

you didn’t need any studies.

But the public needed more information to support a tax change. So the studies conducted by the Senate have been useful to verify for the public what you already knew.

Today, nearly 60 percent of Alaskans say ACES needs to be modified. Of those, 89 percent believe tax reform must be significant— And be enacted this year.

Some senators thought when the studies were complete, they’d hear the consultants tell them: “Alaska should stick with status quo.”

To their dismay, the studies demonstrated the opposite: Alaska is not competitive at today’s high oil prices. And, they’ve heard the truth that status quo has driven producers into extreme harvest mode, with no new production.

Still, in spite of what their consultants told them, the Senate Resources Committee drafted and passed their own bill, SB 192, from committee.

The Senate Resources Committee version of tax change was a prime example of,

“Tweak a little bit and say we made a difference.”

You already know that I will not accept a minimal tax reduction with no new production.

Yet, at the end of the day, neither the Senate’s own experts nor industry

believe that SB 192 will incentivize new production. The bill has no financial pledges nor any investment guarantee behind it.

So where we are today in the legislature can be summed up this way:

On the one hand, your governor and the House have agreed on a plan where $14 billion of new Alaska work is on the table in exchange for meaningful tax reform.

And, on the other hand, SB 192, the Senate bill, has ZERO Alaska investment guarantees -- and no Alaska work pledged for the minimal tax benefit given.

That’s with 18 days remaining in this session. But hope springs eternal with me. A lot can change.

I have pledged to work with those senators and representatives who sincerely want to bring meaningful opportunity to Alaskans.

Senate Finance now has SB 192. And, we have Senator Stedman’s pledge that what he will do to SB 192 in Senate Finance will be more meaningful than what came out of Senate Resources. After that, I am confident the House will take action for Alaskans and more Alaska production.

There’s an old saying in politics: Some attribute it to Ronald Reagan,

but I think it goes back farther: “If they feel the heat, they’ll see the light.”

So I say, “Let’s bring it!” Talk to five people outside of this room today!

Get five more Alaskans involved. Stay positive!

Get the word out. Use social media. Call your legislators.

The message is: Say Yes to Meaningful Tax Reform. Say Yes to bringing billions of dollars in new investment to Alaska. Say Yes to unlocking Alaska’s resources for Alaskans’ benefit!!

That is how we will put more oil in the pipeline and get Alaska back on track.

Thank you.

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