Oil Tax Debate Draws SRO Crowd

By | July 24, 2014 – 9:33 am

It was standing-room only at an Anchorage debate on whether to keep the new capped oil tax rate or to switch back to a system where the rate goes up along with the profits.

The Alaska Common Ground forum Wednesday was close to violating fire code, and that was after turning 75 people away.

The two-hour debate had State Senator Bill Wielechowski (D-Anchorage) and economist Gregg Erickson making the case for repealing the law on one side.

Wielechowski and Erickson argued that tax rates historically have had little effect on oil production, and that Alaska was a profitable place to operate even when the state had a windfall profits tax.

Erickson also accused the oil companies of using scare tactics by suggesting that the development of a natural gas megaproject depended on the failure of the repeal, and he recalled similar rhetoric used in 2006 when voters considered a gas tax initiative.

“The oil companies, particularly Conoco Phillips, paid millions of dollars for ads that said, ‘You pass this initiativefolks, and there’ll never be a gasline,’” Erickson said. “Well, voters of Alaska took that to heart and declined to pass that initiative. Folks, we still don’t have a gasline, and they’ve been telling that same thing every time we proposed a change in the oil tax regime.”

The opposing side was represented by oil and gas consultants Roger Marks and Brad Keithley, who countered that tax incentives can encourage production and in turn bring in more state revenue.

The pair was also asked to explain why the oil companies were spending more
than $10 million to defeat the referendum. The audience skewed in favor of
repeal, and Keithley’s response was met with some skepticism from the crowd.

“I don’t think the oil companies are scared,” Keithley said.

Read the full story

Anchorage SB21 Debate Draws Standing-Room-Only Crowd

Caslon Hatch, Weekend Anchor KTUU Jul 23, 2014

ANCHORAGE – One of this election year’s most complicated and pivotal issues readily filled the room at the Loussac Library’s Wilda Marston Theatre in Anchorage Wednesday night, for a debate on the future of oil tax law Senate Bill 21.

In one corner, state Sen. Bill Wielechowski (D-Anchorage) and economist Gregg Erickson argued in favor of Ballot Measure 1, which if passed would repeal Gov. Sean Parnell’s slate of reduced oil taxes under SB21. The 2013 bill superseded former Gov. Sarah Palin’s plan, Alaska’s Clear and Equitable Share, an oil production tax passed by the state Legislature in 2007. “Under SB21 the oil companies get the biggest share, a much larger share of that increment,” Erickson said at the debate.

In the other corner, oil and gas consultant Brad Keithley and petroleum economist Roger Marks argued for keeping the new oil tax system in place with a no vote on Ballot Measure 1. “SB21 was propagated by one single big problem with ACES, and the problem was the structure accredited very high tax rates and high prices,” Marks said.

See the full story.

ACG Chair Cliff Groh on Hometown Alaska

Getting an audience for the issues

By | June 20, 2014 – 1:00 pm
Both Alaska Common Ground and the Anchorage Chamber of Commerce have public forums planned to discuss both sides of important issues coming before Alaska voters this election season.We bet both Cliff Groh (Alaska Common Ground) and Andrew Halcro (Anchorage Chamber of Commerce) would like an audience like the one above to hear out the discussions. We found it at Wikimedia Commons, and think it expresses a wish that we all get involved in understanding these complex issues so we can vote informed.Hometown Alaska has invited both of these community catalysts onto the show to discuss their organization’s upcoming forums, why they chose this format, do they find themselves preaching to the choir or do they manage to bring in new faces and fresh ideas through the format of public forums.Guests:

  • Andrew Halcro, president, Anchorage Chamber
  • Cliff Groh, chair, Alaska Common Ground

Link to podcast

Proposition 1 on Talk of Alaska

On KSKA’s Talk of Alaska on Tuesday, June 10th, Steve Heimel hosted a discussion on Proposition 1, the repeal of SB21.


  • Senator Bert Stedman, Republican from Sitka
  • Doug Smith, CEO, Little Red Services oilfield services company & member of No One On One coalition
  • Tara Sweeney, Senior Vice President for External Affairs, Arctic Slope Regional Corporation & member of No One On One coalition

Link to the podcast.

Timeline: Notable moments in 40 years of Alaska’s history with marijuana

Megan Edge, Laurel Andrews- Alaska Dispatch April 13, 2014

Article link here

When men and women took their clipboards, pens and paper to the streets in 2013 to begin collecting signatures for yet another Alaska voter initiative to legalize marijuana in the Last Frontier, some were left scratching their heads. How legal is marijuana in Alaska already? they wondered. Well, it’s complicated. Over time, a great deal of gray area has developed when it comes to the enforcement of Alaska laws against the green.

The uncertainty has even predated Alaska’s statehood. Even the man mostly responsible for the nation’s first laws against marijuana was uncertain about where Alaska’s laws stood.

During testimony before members of Congress in 1937 on behalf of prohibiting marijuana, a substance “about as harmless as a rattlesnake,” Commissioner of Narcotics Henry Anslinger was asked if any of the territories had laws against its use.

“Hawaii has a law. I cannot tell you about Alaska. Puerto Rico does have a law. The only place I am not sure about is Alaska,” he said. By the 1960s the nation was deep into drug culture; the youth used it as a symbol of social rebellion, and in the midst of a morally diverse war, a sign of protest. Though Alaska was new to the nation, it was no exception to the phenomenon.

By 1970, the administration of President Richard Nixon began fighting back and Congress passed the Comprehensive Drug Abuse Prevention and Control Act. In June of the following year, Nixon declared the war on drugs, saying it was “public enemy No. 1 in the United States.” It wouldn’t take long for Alaska to start fighting back, with one man leading on the front lines. His case would turn into the biggest marijuana and personal privacy case Alaska had ever seen, setting precedent for decades to come.

Since Colorado and Washington have made headlines recently by legalizing recreational cannabis sales, marijuana has become a hot topic in 2014. But the drug’s use and place in society has been hotly debated in courts and among lawmakers for decades, leaving citizens as spectators watching an everlasting ping-pong match.

Regardless of Alaska’s history with marijuana, and regardless of what happens in the August election, pot remains illegal under federal law, listed among Schedule I drugs, a group of controlled substances defined as the most dangerous, without any accepted medical utility and with high potential for abuse.

1972 – The fall of 1972 was the start of a long fight for and against marijuana legalization in Alaska thanks to one man, who could be called the grandfather of the Alaska marijuana legalization movement. Irwin Ravin was pulled over for a broken tail light in Anchorage, and was discovered to be in possession of marijuana. A local police officer wrote him a ticket, but Ravin refused to sign it and held the contraband in his hand until he was arrested. Ravin v. State would end up setting legal precedence for decades to come.

1975 – The Alaska Legislature voted for the decriminalization of the long-debated drug. If a person was in possession of one ounce or less in public, or in possession of any amount in the privacy of one’s own home, he or she could not be fined more than $100.

1975 – Just over a week after lawmakers decriminalized the personal use of marijuana, the state of Alaska reached a decision in Ravin’s case, setting a precedent that would complicate laws against marijuana from then on. The Alaska Supreme Court deemed possession of pot in the privacy of one’s home constitutionally protected, despite the fact that Ravin was actually found in possession in his car, not his home.

1982 – The Alaska Legislature decided to let users keep a little more cash in their pockets, and got rid of the $100 fine.

1989 – A campaign to fight the use of marijuana began by circling a statewide petition.

1989 – Alaska State Troopers made a sizeable marijuana bust in Wasilla in December, where Thomas Wyatt, then 45, was found growing 2,006 plants in a residence troopers said was apparently constructed for the purposes of growing cannabis. The month before, troopers had seized 3,000 plants in four different growing operations in the Matanuska Valley.

1990 – In November of 1990 the voter initiative passed, making it illegal to even have or smoke pot in one’s own home. If caught with less than eight ounces, a person could spend 90 days in a jail cell and get slapped with $1,000 fine.

1995 – Three Point MacKenzie men were arrested and charged with poaching up to a dozen moose over the course of six months. One of the men was also charged with setting up illegal bear-baiting stations in the woods across the Knik Arm from Anchorage. Troopers said they believed the men intended to trade the bear parts to an undercover investigator in exchange for marijuana.

1996 – Troopers seized 1,465 plants, worth more than $700,000, in a shed next to couple Doug and Heather Gregg’s home. Trooper Al Storey said the bust was the largest in recent history.

1998 – The use of marijuana for medical purposes became legal, with 69 percent of voters signing off on a citizens’ initiative. Those smoking for their own health and registered in a state database could possess an ounce or up to six plants, of which only three can be budding. Critics say a problem has been that there is no legal way for Alaskans with legal permission to obtain the drug.

1998 – In October, Anchorage police confiscated 1,097 plants during a bust on Birchwood Loop Road, the largest pot bust in Anchorage at that time.

1998 – Also that month, troopers found what they said was the most impressive growing and packaging operation they had ever seen hidden in four secret rooms beneath the garage of an Anchorage Hillside home. Troopers seized 181 plants and indicted seven people.

2000 – Weed was once again on the mind of Alaska residents. An initiative sought to return the laws to pre-1990 status. Measure 5 would have regulated the drug like alcohol, allowed residents over 18 to farm and possess their own supply, and would have granted amnesty to those serving time for marijuana offenses, and purged the criminal records for many others, and would have created an advisory group to study possible restitution. It failed to gain enough support, losing 59.1 percent to 40.9 percent.

2002 – At the Olympic Torch Relay in Juneau, a senior at Juneau-Douglas High School held a sign that said “Bong Hits 4 Jesus.” Joseph Frederick’s obvious disobedience became the focus of a national debate over the First Amendment.

2004 – Marijuana legalization failed once again in 2004. The campaign pushing Ballot Measure 2 spent more than $850,000 in polling, canvassing, staffing, mailers and print and broadcast advertisements before it failed. A study commissioned by the Alaskans for Rights & Revenues, the group backing the initiative, found that marijuana prohibition costs ranged from $25 million to $30 million annually.

2005 – The killing of Thomas Cody was found to be a drug slaying connected to a multi-million dollar marijuana smuggling operation of “B.C. Bud” from Canada. Nopenone Dennis Shine plead guilty in 2007 to the shooting of Cody, in what was a hostile takeover of the operation. The group was smuggling 900 pounds of product into the state every six weeks, U.S. Attorney Frank Russo said. The bust dismantled one of the largest marijuana smuggling operations in state history.

2006 – Former Alaska Governor Frank Murkowski went head-to-head against the Ravin decision. Murkowski made the possession of one to four ounces of pot a misdemeanor and punishable by up to one year in jail. He argued that the marijuana available by the mid-2000’s was much stronger than what Ravin was smoking in the 1970s. The American Civil Liberties Union challenged the new law.

2006 – One of the largest drug busts in Western Alaska occurred when troopers seized 42 pounds of marijuana in Bethel. Francis Cryan, then 57, was found to have marijuana hidden in his checked luggage, as well as in a locked gun safe he had shipped to himself through a cargo carrier. Troopers estimated that the street value in Bethel, nearly four times the price in Anchorage at $1,400 an ounce, was worth around $940,000.

2007 – The 9th U.S. Circuit Court of Appeals ruled that Fairbanks man John Collette, whose marijuana grow operation was disbanded in the early 1990s, did not get proper notice for the goods seized in the bust, including two airplanes, snowmachines and more than $40,000 from bank accounts. Collette’s operation was seized in 1993 when authorities raided the home. He fled the country but later returned and pleaded guilty to multiple marijuana manufacturing and distributing charges, serving eight years of an 11-year sentence. After that, he said he spent much of his time working on lawsuits against the government.

2008 – Alaska’s Supreme Court began hearing testimony for the State v. ACLU, but — plot twist — no decision was made. Privacy rights were to be reexamined when a defendant would actually be prosecuted for a marijuana offense.

2010 – The Iditarod Trail Sled Dog Race began testing competing mushers for drug use. Mushers are tested for a variety of different drugs, marijuana among them. The drug tests occur at White Mountain, the second-to-last checkpoint during the 1,000 mile long race.

2010 – Then-three-time race winner Lance Mackey said in 2010 that he believed the Iditarod decision was aimed at him. Mackey, a throat cancer survivor, had been open about using medical marijuana on the trail. Officials said the idea had been discussed over the years, but executive director of the Iditarod Trail Committee Stan Hooley told the Anchorage Daily News that it would be difficult to deny the allegations and that other mushers had complained about it. “The reality of it is he’s won the race three times and people would like to figure out a way to beat him,” Hooley said.

2010 – On April 11, Ravin died at age 70 from complications caused by a massive heart attack.

2010 – The ACLU estimates that in 2010 Alaska spent more than $11 million enforcing marijuana laws, and that every 4.32 hours someone in Alaska is arrested for having marijuana. The study used data from the Federal Bureau of Investigation’s Uniform Crime Reporting Program and the U.S. Census to document arrest rates, as well as the Bureau of Justice Statistics’ Criminal Justice Expenditure and Employment Extracts data from fiscal year 2009. Also included in the analysis were federal and state-level estimates for government expenditures and employment for law enforcement, the courts and department of corrections.

2010 – In July, Alaska State Trooper Kyle S. Young busted a married couple for growing after attesting that he could smell marijuana from the road, hundreds of yards away. Young claimed that he smelled marijuana while off duty and driving in the Meadow Lakes area of Southcentral Alaska. He followed his nose to the house of Trace and Jennifer Thoms and concluded that there were no other nearby structures that could have been the source of the odor. Young later executed a search warrant to search the house’s specific address and immediate vicinity, and during that time searched two buildings that were more than a football field’s distance from the house, where 400 marijuana plants were seized. Three years later, the Ninth Circuit Court of Appeals would throw out the case, saying that the grow operation discovered during the search lay outside of the scope of the officer’s search warrant.

2012 – A pungent smell and claims that Kenny Champ of Houston, Alaska, was illegally dumping raw sewage into a creek near Bench Lake led Alaska State Troopers to investigate Champ’s home. When they arrived, the 49-year-old Champ greeted troopers with a sawed-off shotgun and threats that he’d shoot if they didn’t leave his property. Next, troopers discovered 1,700 marijuana plants on the property. They also discovered that he had, indeed, been polluting the stream. Champ plead guilty to growing more than 1,000 plants.

2012 – Juneau musher Matt Giblin was sanctioned under the Iditarod’s drug testing program and was stripped of his 38th-place finish after testing positive for THC, an active compound in cannabis.

2013 – Petitioners were once again looking for signatures to legalize, tax and regulate marijuana. The Campaign to Regulate Marijuana turned in more than 45,000 signatures in support of the ballot measure in January 2014.

2013 – 20-year-old Nathaniel Harshman was sentenced in January 2013 to five years in federal prison for working on his father Floyd Harshman’s marijuana farm — a 477-plant grow off the Elliott Highway in Interior Alaska — as a teenager in 2011.

2014 – Lt. Gov. Mead Treadwell approved the voter initiative to legalize, tax and regulate marijuana, to appear on the Aug. 19 ballot.

2014 – In mid-March, the legalization campaign, now dubbed the Campaign to Regulate Marijuana Like Alcohol, received a cash infusion of more than $200,000 dollars to be used for an “aggressive campaign” to build voter outreach, including print, television and radio ads. In the meantime, opposition to the measure has been relatively subdued thus far.

Contact Megan Edge at megan@alaskadispatch.com

Contact Laurel Andrews at laurel@alaskadispatch.com

Tim Bradner: Lots of Oil Remains on North Slope

April 8, 2014, Tim Bradner, Anchorage Daily News

How much oil is left on the North Slope? Will the tank run dry?

We need to know. A third of our state’s economy depends on oil, according to University of Alaska studies. Oil pays for 90 percent of our state budget too.

The short answer to this is no – there’s lots of oil. A more complete answer, though, is that it also depends on the economics.

It’s very unlikely we’ll find any more super-giant deposits like the Prudhoe Bay and Kuparuk River fields. We can find a lot of smaller fields, though.

These will be expensive, and less profitable than big fields, and that’s where the economics come in.

Big donation to legal marijuana campaign

Laurel Andrews, Alaska Dispatch, March 19, 2014

Five months before voters head to the polls on Aug. 19 to decide whether to legalize, tax and regulate marijuana in Alaska, campaign activity has remained relatively subdued. That may soon change, however, as the campaign sponsoring the initiative plans to ramp up its voter outreach efforts with a new infusion of funds.

Contributions to the Campaign to Regulate Marijuana Like Alcohol [3], the organization sponsoring the initiative, have been trickling in since June 2013. But on March 13, the campaign reported by far its largest contribution to date, a check from the Marijuana Policy Project for $210,000.

The money was a planned contribution from MPP, wrote Taylor Bickford with Strategies 360, spokesperson for the campaign. The funds will be channeled toward an “aggressive campaign” to mobilize voters that will include TV and radio advertisements and direct mailing, Bickford wrote. “This is an important issue that Alaskans support, and the campaign is committed to raising and spending whatever it takes to win in August.”

To date, the campaign has received $246,191.84, largely from MPP. In addition, MPP has spent $147,493.07 on campaign activities and sent one staff member, Chris Rempert, up to Alaska to coordinate volunteer and field activities.

Read more

Tim Bradner: Alaska Struggles to pin down a “sweet spot” on oil Tax

January 27th, 2014 Tim Bradner, Anchorage Daily News

Will we ever settle on what’s a fair share for Alaskans from the extraction of our mineral resources? What does “fair share” mean? And how do we calculate it?

This is the second of my columns in which I attempt to explain the mysteries of our oil tax system.

In August, voters will consider a repeal of last year’s Senate Bill 21, which changed our taxes. Critics called it a “tax giveaway,” but supporters credit it with renewing industry activity on the North Slope.

What will sharpen this debate is that it now appears there may be no giveaway. The state Department of Revenue’s latest estimate for fiscal year 2015, the state budget year starting next July, is that SB 21 is essentially a wash between what the former tax, called ACES, would have brought in and what the new tax law will earn. If oil prices slide a bit more, as the U.S. Energy Information Administration now expects, SB 21 would actually bring in more money than ACES would have.

For the current state budget year, FY 2014, there is a revenue loss of between $250 million and $300 million because of the changeover between ACES and the new law, which occurred Jan. 1.

Tim Bradner: Alaska’s Oil Tax Debate is Volatile, Long-Running

by Tim Bradner – January 12, 2014 – Anchorage Daily News

A new tax on Alaska oil and gas production went into effect on Jan. 1. The new law — known by the shorthand SB 21 (for Senate Bill 21) — remains highly controversial.

Opponents call it a “giveaway” to the oil industry. Supporters say it has already spurred several billions of dollars in new investment, and that will produce oil in the future that wouldn’t have been produced otherwise.

As a result, a ballot proposition to repeal the tax change will come before voters in the August state primary election.

Alaskans have debated oil taxes for decades but the issue never seems to get settled. As a long-time observer of Alaska oil policy, both as a journalist and as a participant (I was an oil company lobbyist in the 1970s and early 1980s), I’ve watched this cycle again and again– like watching the movie “Groundhog Day.”

Alaska’s Major Energy Projects

November 15, 2013 – Alaska Public Media

This week on Addressing Alaskans, listen to a panel discussion hosted by Commonwealth North on five major Alaska energy projects. Panelists Tim Bradner, Mark Foster, Scott Goldsmith and Harry Noah address how the different projects complement or complete with each other, challenges ahead for each, how state deficits and declining revenue impact the projects, and finally how to navigate the future and decide which one is best. All five of the potential projects discussed have received state funding.

Major projects discussed:

  • Alaska South Central LNG Project (North Slope producer-led large-volume gas pipeline)
  • Alaska Stand Alone Pipeline (State-sponsored smaller-volume gas pipeline)
  • Alaska Interior Energy Plan (North Slope to Fairbanks LNG trucking)
  • Susitna-Watana hydroelectric project
  • Cook Inlet gas exploration (State investments and tax credits)