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Monday, April 11, 2011

Let The Big Dog Out!

Big Dipper Oil & Gas. Have you heard of it? It operates here in Alaska. It owns Billions of Barrels of oil and it owns trillions and trillions of cubic feet of natural gas. It pays you a dividend every year. Unlike Conoco-Phillips that claims to be “Alaska’s Oil and Gas Company”, Big Dipper Oil & Gas really is. Big Dipper Oil Company or “Big Dog” is, of course, the State of Alaska.
Now let’s see a show of hands: how many Alaskans have received a dividend directly from Conoco-Phillips? Ok…I see a few of you out there. How many of you receive a dividend directly from he State of Alaska. Do you get it now?
There is only one oil company that cares about maximizing benefits to Alaskans; there is only one Oil Company that gives a fig about Alaska’s ‘public interest’ and that is the Big Dog.
All the other companies are up here pretending to be our friends because they want what the Big Dog’s got. Oh, they spend a pretty penny on the gauzy lens and inspirational music, showing our First People in moving shots and lots of neighborly faces talking sincerely for the camera. But in the end, when the easy money is gone, so will they. As Walter Hickel once told a reluctant ARCO regarding undeveloped leases: “You drill ‘em or I will!”
Wally Hickel went eyeball-to-eyeball with the industry and the industry blinked.
Now that was a CEO of Big Dog that all of us Alaskans could be proud of.
Contrast THAT CEO to Sean Parnell. It appears to me that the main reason Governor Parnell can’t go eyeball to eyeball with the industry is that the Governor closes his eyes when he kisses.
Here are a few facts that haven’t been made in other articles on the Governor’s proposed Tax rollback for the Oil Companies:
·      A consultant hired by the Administration, Rich Ruggiero, of Gaffney, Cline & Associates of Houston, Texas, told the House Resource committee last month that he couldn’t endorse the Governor’s bill, but could only give an up and down scenario; In other words: it’s a crap shoot. 
·      Conoco-Phillips most recent 10-K report openly discusses its plans for the next 5 years: sell old assets, buy-back shares, enhance shareholder equity and invest in proven, emerging ventures.
·      Over 47% of new hires for Alaskan oil fields have come from outside the state. Let’s make certain that any employment deal that may be struck is not just an assurance of jobs, but hires inside Alaska and the best way to ensure that is through a project-labor agreement and a unionized workforce.
·      None of these oil companies are standing still, they are all investing to meet the changing future and so should we. $2 B worth of holes in the ground, if the desired reinvestment is realized, would rerun the last 20 years but would not diversify or transform our economy for a new century. Perhaps a $250 M a year University-Conoco partnership that would effectively shift their Research and Development unit to Alaska from Texas would look like more sincere investment than some vague promise to spend $5 B of our dollars enhancing oil production.
The bottom line is that our oil and gas future should be driven by Alaska’s real Oil and Gas Company and NOT by someone else. Alaskan’s don’t care how they do it ‘Outside’? It’s time we prove it.

Elstun Lauesen is an economic development consultant, writer, and lifelong observer of the Alaskan political scene.

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