Wednesday, August 05, 2015

Oil Addiction Prevents Alaskan Politicians From Making Good Decisions

Image Screenshot from Video In 2010 Post
Most people don't change their habits unless they have to.

Alaska politicians (and the people who elect them) have been addicted to easy oil money for the past forty years.  The cozy relationship between some of our politicians (i.e.  ex-governor Parnell was a Conoco-Phillips lobbyist (literally, not just figuratively) and two sitting senators are also oil company employees and others get lots of support and advice from the industry) doesn't hurt either.

So our Republican dominated state government (for the last ten years or so) has spent that money like giddy lottery winners.  They didn't listen to warnings of eventual declines in oil revenues from ISER over the years.  It's true, though, that new technologies allowed for oil extraction longer than originally expected and increasing oil prices kept the revenues up even when production started dipping, letting politicians ignore the economists' warnings.

But the politicians in power positions made no serious plans to find alternative revenues or cut spending.  And because oil so dominated the economy, other traditional sources such as timber or tourism would never come close to what oil has brought in.  And as Republicans, they kept new taxes off the table.  And since none of them have the vision,  the guts, or the charisma to inspire the public to new thinking,  they've avoided the idea of tapping the Alaska Permanent Fund for what it was originally intended to do:  supplement the budget when the oil money runs out.  Nor have they been willing to broach reestablishing a state income tax.

And now the oil is hitting the fan.  The oil price decline plus Republican led tax giveaways to the oil companies have put our state budget into crisis.  Instead of planning for the day when oil revenues would no longer pay all the bills like rational, intelligent people do, they've continued to spend until their fingers come up empty when they stick their hands into the state coffers, at least the ones that don't have special locks on them like the Permanent Fund and budget reserve funds. 

OK, some will complain I'm being partisan here picking on Republicans and letting Democrats off the hook.  Democrats certainly have challenged the big tax breaks the Republican majority gave oil companies, but after redistricting, they no longer had the votes to block them.  And even the public was there, losing a ballot initiative to restore the tax by only 4% despite huge oil company spending on the election. And the Democrats have challenged big capital projects like the Susitna Dam and the Knik Arm bridge.  I don't know that Democrats have been particularly better about leading the way to use the Permanent Fund as a trust fund to help support our budget.

But the fact is that Republicans have been in power - both in the legislature and the governorship - and thus we got to our current dilemma on their watch.  So naming Republicans isn't partisanship, it's factual.

All these thoughts came pouring out of my head after reading an AP piece on the impacts of the low cost of energy  in today's ADN.  Oil and coal and natural gas company stock is down, down, down.  And Alaskan's have known for the last year or so that our stock is way down too.  But it didn't have to be if we had looked beyond the short term and prepared.  But we were drunk on oil money and we weren't forced to.

And just the other day we learned that Sen. Murkowski worked to get Alaska exempted from new EPA rules on energy companies that would require them to lower their carbon emissions. 

I get the short term impacts this will have on rural Alaska.  But the actions they would be forced to take would help wean them off the expensive fuels they've continually been using.  And there are Alaskan locations - like Kodiak and villages around the state - who are already breaking their addiction and finding alternative energy sources. Instead, most places, especially in the Capitol building in Juneau, have continued feeding their and our addiction. 

Some addicts just spiral down into self destruction.  Others break from their destructive ways and learn new, healthier habits.  It's what Alaskans need to do.  And we need politicians who have vision and can inspire Alaskans to break from the unsustainable easy way, to the harder but ultimately necessary path.

We are a state of welfare recipients, getting our state budget funded by oil taxes and the federal government, not to mention the actual individual cash Permanent Fund dividend payouts.  We need to think like the wealthy people we still are -  our Permanent Fund has $52 billion and the constitutional budget reserves has another $10 billion - and use the income of our wealth in a responsible way as others have proposed.  We need to supplement that with some sort of taxes - yes, pay our own way, not rely on others to subsidize our schools, state parks, roads, police, health care.  Let's start being healthy, responsible adults. 

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