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Referendum to repeal governor's oil tax cut takes another step

Alex DeMarban

On the sun-drenched plaza below the governor's Anchorage offices, the forces behind a nascent effort to repeal the "oil-tax giveaway" announced a heavyweight lineup of key backers on Thursday, just before submitting their proposed referendum to the lieutenant governor's office for approval.

The prime sponsors of the effort -- Vote Yes! Repeal the Giveaway -- are Jim Whitaker, a Republican and former Fairbanks mayor, Bella Hammond, widow of late Republican governor Jay Hammond, and Vic Fischer, a former Democratic senator.

Fischer, who helped draft the Alaska Constitution more than half a century ago, was the only of the three primary sponsors in town -- Hammond lives near Port Alsworth in the Dillingham area, and Whitaker was in Fairbanks, organizers said.

But Fischer was flanked by other prominent figures, including Jack Roderick, author of the oil business memoir “Crude Dreams,” and Jane Angvik, a former Anchorage assembly member.

"In the '50s, Alaskans worked to get statehood to get away from absentee control of Alaska resources," said Fischer, referring to outside industries that dominated development.

The Constitution says the state should manage its resources for the maximum benefit of its residents. But Senate Bill 21 doesn't do that, Fischer said, calling it an "unconstitutional" giveaway of billions of dollars benefitting BP, Exxon Mobil and ConocoPhillips, the companies that produce nearly all of Alaska's oil.

Gov. Sean Parnell has said his measure is meant to stimulate oil production that's sorely needed to pay for state services. The latest estimates say the bill would reduce state revenue by $3.5 billion over five years, but opponents say the cost will be far higher, particularly if crude prices rise from their current level of about $100 a barrel.

To help pay the bills, the state plans to draw from the $16 billion in savings that have racked up in recent years, due to the Palin administration production tax that hit oil companies with a progressive fee that rose as oil profits rose.

Organizers said getting the 30,000 qualifying signatures -- 10 percent of those who voted in the last state election -- to put the measure on the ballot won't be easy. They have less than 3 months to do so. If they're successful, the referendum would show up on the ballot on Aug. 26 of next year.

Spokesman Pat Lavin called on Lt. Gov. Mead Treadwell to verify the referendum language as quickly as possible so petitions can be printed and the signature-gathering can begin. The group presented a referendum they said had 372 sponsors, more than three times more than what's needed.

ConocoPhillips announced on Wednesday that it would boost production on the North Slope by bringing a rig to Kuparuk, one of the largest oil fields in North America.

But organizers of the referendum blasted that announcement as politically motivated. Roderick, a longtime authority on the Alaskan oil history, said corporations such as ConocoPhillips make such decisions several months in advance, meaning the announcement was timed to put a positive spin on Parnell's plan.

Also, while it might bring a small boost in production, the revenues for Alaska will be far smaller under the governor's tax plan.

Roderick said it's unsettling that the governor would propose giving away state resources without getting a promise that companies will search for new oil. In fact, a BP executive told state representatives that the company wouldn't do any exploration because it's already tapping oil from Prudhoe Bay, one of the largest oil fields in North America.

"Now that's not good business," Roderick said. "The governor's the CEO of this state. How dare he give our resources away without a commitment in exchange? Come on. Come on Alaskans, be realistic. I get a little emotional because damn it, we need to control our future, for our kids."

Contact Alex DeMarban at alex(at)alaskadispatch.com

(Correction: An earlier version of this article erroneously called Jane Angvik a former state representative.)