R E V I E W Special Session in Retrospect
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December 07:OCT 2003 NL 12/7/07 9:02 AM Page 1 RESOURCEDec2007 REVIEW A PERIODIC PUBLICATION OF THE RESOURCE DEVELOPMENT COUNCIL FOR ALASKA, INC. www.akrdc.org This Edition Sponsored By: Past issues of the Resource Review (1978-2007) are available at www.akrdc.org/newsletters/ SPECIAL SESSION IN RETROSPECT GOVERNMENT TAKE SOARS TO OVER 80%, PETROLEUM PROFITS TAX UP 400% IN TWO YEARS Last month the Alaska Legislature 80 percent. That means out of every dol- completed a 30-day special session re- lar earned in Alaska at current oil prices, sulting in the most comprehensive over- industry will keep less than 20 cents of it, haul of Alaska’s petroleum production even though it invests billions of dollars tax (PPT) in decades, handing the oil in- each year to keep Alaska’s oil flowing to dustry an enormous tax increase that market, doing all the work and taking all could discourage the future investment the risks. needed to stem the decline in North Initial estimates indicate the latest Slope production. rewrite of the PPT could result in a stag- The final bill approved by the gering $1.5 billion to $2 billion tax hike Under the new PPT, the total government take, in- Legislature last month increases the PPT on the state’s leading revenue-producing cluding other taxes and royalty, at current prices will twice as much as what Governor Sarah industry over the PPT enacted last year, increase to over 80 percent. (Photo by Judy Patrick) Palin initially proposed as ‘Alaska’s fair which itself boosted industry taxes by $1 Many Alaska business leaders share.’ When combined with the tax in- billion in 2006. Last year’s PPT would throughout the private sector, as well as crease in the PPT last year, the oil indus- have collected $2.8 billion annually at some legislators, are worried the huge tax try is now faced with a 400 percent $80 per barrel oil. The bill passed by law- increases of the past two years will deter increase in production taxes. makers last month hikes the tax to $4.4 vital future investment. The state should Under the new PPT, the total govern- billion – far more aggressive than the be concerned since it estimates more than ment take, including other taxes and roy- governor’s proposal, which would have alty, at current prices will increase to over boosted taxes by $700 million at $80 oil. (Continued to page 4) ALASKA RESOURCES 2008: RDC’S NOVEMBER I NSIDE CONFERENCE PRESENTATIONS AVAILABLE ONLINE Special Session In Retrospect 1,4-5 RDC's Annual Conference, Alaska Resources 2008, wrapped up November 15 at Executive Director’s Message 3 the Sheraton Anchorage Hotel. This year’s conference, attracting a record 580 reg- Permitting Process Defended 6 istrants and 133 sponsors, featured 21 speakers from Alaska’s resource industries. Anti-Mining Initiative 7 The opening day was dedicated entirely to oil and gas issues while the second day Kensington Update 7 featured an in-depth panels on the impact of the Endangered Species Act on oil, min- ing, fishing, timber, and tourism. Text and video presentations and a list of raffle Pebble Partner Speaks Out 8 prize winners are available on our website at www.akrdc.org. See page 9 for a list of RDC Conference Sponsors 9 sponsors. Reflections On Dale Lindsey 10-11 December 07:OCT 2003 NL 12/6/07 2:56 PM Page 2 December 07:OCT 2003 NL 12/7/07 11:24 AM Page 11 Last Memories Of Dale Lindsey (Continued from page 10) and, for him, Carol Ann was that woman for over 53 years. The word “partner” does not begin to define her role. She was the anchor in any storm, the wheel when the ship was headed off course, the winch when the Last month at RDC’s annual conference, Skip Reierson, President of Petro Marine Services, reflected on Dale and Carol Ann Lindsey. Reierson noted Dale was inducted into the Alaska Business Hall of Fame in 1997. At right, conference sails needed to be taken in a bit, attendees join Mr. Reierson in the traditional RDC conference toast, one week before Dale passed away. and, to the very difficult end of the voyage, provided the warmth and comfort of a snug cabin talked about Seward and Alaska and Dale’s hopes for the fu- on a cold and wintry day. ture of both. At the end of our last visit my wife, daughter and As I mentioned at the RDC conference several weeks ago, I came in from harvesting some of the Lindsey’s excess rasp- Dale once told me, somewhat facetiously I assume, that at one berries to find Dale pounding away on the treadmill. Thus, it time he had been only one more failed gold mining investment is fitting that my last memories of Dale involve both his gen- from a divorce. However, although risk taking was as much erosity and him charging ahead and not giving an inch to what as part of Dale as his infectious smile, he never made that one became the unbeatable foe. more investment. Carol and his family were much too im- Now that my friend is gone, one of my hopes for the future portant to him. is that somewhere in Alaska we are growing a few more like My family and I were in Seward in September and stopped him. We really need them. Editor’s Note: See Dale Lindsey’s obituary at: by to see Dale and Carol Ann a couple of times. As always we http://www.akrdc.org/newsletters/2007/december/dalelindsey.html DALE’S 2007 CHRISTMAS MESSAGE OIL TAX: GOVERNOR APPLAUDS LEGISLATURE (Continued from Page 4) “IT’S NOT EASY” It was November 1, 1959 when my wife Carol and I entered Republicans and most Democrats, claimed last year’s overhaul the business world. As our 48th anniversary in business has just of the PPT was tainted by corruption and didn’t go far enough passed, the event has provided an opportunity to reflect on the in its tax rate. principles which have guided us over the past 576 months. We Governor Palin credited lawmakers for “improving” her knew it was not going to be easy to bridge the gap between bill. “All Alaskans should applaud the hard work of our youthful enthusiasm and mature realism, and in many respects...it Legislature on this important issue,” said Palin. “The bill has not been. From these experiences has evolved strikes a careful balance. It assures a fair share of our oil’s value this year’s seasonal message. for Alaska, while encouraging producers to invest in new IT IS NOT EASY... fields. This legislation creates stability for Alaska and I know To apologize, it is the right thing for the state.” To begin over, The new PPT includes a 25 percent tax on the net value of To be unselfish, oil and a steep progressivity schedule that applies a 0.4 percent To take advice, charge for each dollar the price of oil rises above $52 per bar- To admit error, rel. While allowing tax credits to encourage new development To face resentment, and reinvestment in existing infrastructure, it severely restricts To be charitable, capital expense deductions to scheduled maintenance and im- To Keep on trying, plements extended audit provisions. The new PPT caps oper- Resource Development Council Executive Committee Officers To be considerate, ational costs at 2006 levels for the major fields and limits To avoid mistakes, President John Shively The Resource Review is the official periodic publica- growth to three percent a year, even though industry costs 121 W. Fireweed, Suite 250 To profit by mistakes, Sr. Vice President Rick Rogers have climbed 53 percent since 2005. The tax hike is also Anchorage, AK 99503 tion of the Resource Development Council (RDC), To forgive and forget, Vice President Wendy Lindskoog Phone: (907) 276-0700 To think and then act, retroactive to July 1. Secretary Scott Thorson Fax: (907) 276-3887 Alaska's largest privately funded nonprofit economic To Keep out of the rut of complacency, At RDC’s annual conference last month, President John Treasurer Stephanie Madsen E-mail: [email protected] To make the best of little, Shively warned that the massive tax increase represents a huge Staff development organization working to develop Website: www.akrdc.org To subdue frustration and despair, risk for Alaska’s private sector economy. Executive Director Jason Brune To maintain a standard of excellence, “Taxes do deter investment, and I hope five years from now Deputy Director Carl Portman Alaska's natural resources in a responsible manner Material in this publication may be To shoulder a deserved blame, we don’t look back at 2007 and concede Alaska made a terri- Membership Director/ Deantha Crockett reprinted without permission provided and to create a broad-based, diversified economy To recognize the treasure of teamwork, Projects Coordinator ble mistake,” said Shively. “If so, it may be too late to turn the appropriate credit is given. To endure success... Writer & Editor Carl Portman Projects Coordinator/ Marleanna Soto while protecting and enhancing the environment. ship of state away from its ill-fated course.” AMEREF Development Director BUT IT ALWAYS PAYS! Page 2 December 2007 Resource Review www.akrdc.org (907) 276-0700 December 2007 Resource Review Page 11 December 07:OCT 2003 NL 12/7/07 11:24 AM Page 10 December 07:OCT 2003 NL 12/6/07 2:56 PM Page 3 A MESSAGE FROM THE PRESIDENT A MESSAGE FROM THE EXECUTIVE DIRECTOR JOHN SHIVELY JASON BRUNE DALE LINDSEY: MY KIND OF ALASKAN THE PERMANENT FUND DIVIDEND NEEDS TO GO We’ve long heard that what Alaska needs is leadership or differently if we were all receiving Royalty Checks from de- My friend Dale Lindsey left us the day be- exploration company is doing on the North fore Thanksgiving after putting up a valiant, Slope, risked capital in the fishing industry, more big ideas.