What others say: Bans on oil and gas leasing rob Alaska of potential jobs, revenue

  • Sunday, January 1, 2017 8:21pm
  • Opinion

The outrage from Alaska’s political leaders and industry groups was swift, predictable — and completely appropriate.

Once again, President Barack Obama has acted in a manner detrimental to Alaska and to the nation’s energy needs. What he did on Tuesday was use a provision of a 1953 law to, in his view, indefinitely put most of the U.S.-controlled portion of the Arctic Ocean off limits to future oil and gas leasing. The announcement Tuesday also affected some waters of the Atlantic Ocean.

In doing so, the president cited the importance of the Beaufort and Chukchi seas to the subsistence lifestyle of Alaska Natives and also referenced what he sees as the “significant” risks of a spill and the nation’s “limited” ability to clean up a spill. He said the nation needs “to continue to move decisively away from fossil fuels.”

It has become well-established that the nation does, indeed, need to broaden its sources of energy and to continually work toward producing energy in a cleaner way. The nation and the energy industry have steadily been moving in this direction, in part because that’s what consumers and energy company stockholders want them to do.

President Obama’s decision to act unilaterally and on such a tremendous scale, taking such a large swath of potential energy out of play, is uncalled for. It also appears to be an action done out of an irrational fear that the impending presidency of Donald Trump is going to become one of widespread pillaging of public lands by energy companies, with oil rigs poking holes in wilderness areas and pipelines criss-crossing national conservation sites.

That doomsday scenario is just not likely.

What does President Obama’s decision to put an end to future Beaufort and Chukchi sea oil and gas leasing mean for Alaska?

In terms of direct revenue to the state, not much at the moment. That’s because there’s no Outer Continental Shelf drilling going on. If there were, Alaska would be receiving some income through a revenue-sharing program with the federal government, though not as much, percentage-wise, as states in the oil-producing region of the Gulf of Mexico. That’s a separate issue that Sen. Murkowski has been working on.

So what the president essentially did is rob Alaska of the potential for additional revenue, albeit revenue that would likely not be seen for many years given the lengthy amount of time it would take for an offshore lease to be brought into production. Why don’t we have offshore production now, you ask? In part because this administration, through previous actions, has never been friendly to offshore drilling in the Arctic.

The president’s decision this week also robbed Alaskans of job opportunities. The oil industry workforce has seen good employment in recent years, but that has been steadily declining along with the drop in oil prices. The Alaska Department of Labor and Workforce Development, in its October employment forecast for all industries, projects the number of jobs in the oil and gas extraction sector will fall 10 percent by 2024. Within that number, and perhaps most telling, is that drilling jobs are expected to fall 18.9 percent. The president’s decision exacerbates that.

And, although it’s an offshore production would certainly be many years distant, the additional oil flowing through the trans-Alaska oil pipeline could have a direct effect on the Fairbanks North Star Borough through property taxes. More oil in the pipeline would mean a greater assessed value of the pipeline, which in turn would mean the oil companies would be paying more in property taxes for the portion of the pipeline system located within the borough.

The law President Obama exercised is the Outer Continental Shelf Lands Act, approved in August 1953. The issue as it relates to the president’s decision focuses on a brief section under the heading “Reservation of lands and rights.” It says simply that “The President of the United States may, from time to time, withdraw from disposition any of the unleased lands of the Outer Continental Shelf.”

There’s no mention in the law about a subsequent president undoing such a predecessor’s declaration. Presumably the present Republican-controlled Congress could pass a law to undo it, but such an attempt would surely be subject to filibuster in the Senate. Republicans would need the help of Democrats to reach the 60-vote threshold to end the filibuster blockade.

So there will have to be another way to overturn the president’s withdrawal of the ocean acreage from the federal leasing program. But there is apparently no precedent for how to do it. Sen. Lisa Murkowski, in a recent interview with the Daily News-Miner, said, “How we can reverse this is something we are going to have to reckon with and figure out.”

Let’s hope a way to overturn the decision can be found quickly.

— Fairbanks Daily News-Miner, Dec. 24

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