There is little more important to the success of any nation’s economy than energy. America, in general, and here in Alaska in particular, the United States has a lot of the raw materials that provide that energy: Coal, oil, and natural gas. But the Alaska state legislature has spent the last few weeks tossing brickbats back and forth over the state-level tax deal that would not only get the new natural gas pipeline from the North Slope to the Kenai Peninsula going, but would also give the State of Alaska a piece of the pie.
The legislature didn’t get it done in the regular session. Governor Mike Dunleavy (R) called a special session. The state Senate, in that special session, coughed up a proposal, about which Governor Dunleavy simply said, “It doesn’t work.”
Now, the legislature is, once again, in another special session.
The Alaska Senate approved in a 12-8 vote Friday a bill that would reduce taxes on the Alaska LNG project. It was the last day of a special session Gov. Mike Dunleavy called to consider the issue.
But Gov. Dunleavy, in a news conference minutes after the vote, said the Senate version “doesn’t work.”
Dunleavy called lawmakers into a new special session starting at 10 a.m. Saturday.
“We’ll introduce a bill very close to what the bills were that …the Senate put together, minus a lot of these amendments that went in there,” he said.
As of this writing, the session is still going on. Some members of the legislature are warning the others against letting the perfect be the enemy of the good.
The House, appearing to lack the 21 votes necessary to concur with the Senate’s changes, canceled a floor session following Dunleavy’s press conference. Rep. Chuck Kopp, a member of the narrow 21-member bipartisan majority caucus, appeared alongside Dunleavy at the news conference.
“I think that the greatest mistake we can make is allowing the pursuit of maximum government revenue extraction become the reason we receive no revenue at all,” Kopp said.
That’s a fair point, but there’s a lot more to this than just how much of the boodle flows into Alaska coffers. And Alaska’s cut could be considerable. The current proposals all center, in one way or another, on a volumetric tax rather than a property tax. The state would, in short, tax the amount of gas flowing. Incentives: Produce a lot of gas, keep developing, keep the gas flowing.
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Speaking as an Alaskan, since this pipeline runs exclusively through Alaska, it makes sense that the state, which already derives revenues from energy extraction, should have a piece of this pie as well. But there will be economic benefits to this far beyond just the flow of gas, not the least of which will be jobs, including in some very remote areas where there are few other options.
Speaking as an American, the United States has become, in the last year and a half, a net energy exporter, but to keep that up, we need to keep finding and developing known and new sources. This pipeline is tailor-made to provide liquid natural gas (LNG) to our Pacific partners, like Japan, in addition to adding to domestic stocks.
It’s past time that those folks down there in Juneau stopped throwing things at each other and got this done.
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