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Vol. 19, No. 34 Week of August 24, 2014
Providing coverage of Alaska and northern Canada's oil and gas industry

SB 21 recall defeated

Primary election vote means current oil production tax stays, no return to ACES

Kristen Nelson

Petroleum News

The results were still unofficial as Petroleum News went to print, but at 80,508 opposed and 73,628 in favor, ballot measure No. 1, the repeal of Senate Bill 21, seemed to be going down in defeat.

The 52.23 percent opposed and 47.77 percent in favor, however, was not a uniform state result.

Five of six Interior districts centered around Fairbanks (1, 2, 4, 5 and 6) voted in favor of the repeal by margins ranging from 53 to 65 percent. North Pole was the only Fairbanks-area district voting in opposition to the recall, by a margin of 55 percent opposed to 45 percent in favor.

Four Anchorage districts (17-20), voted in favor of repeal by 51-60 percent, generally downtown and West Anchorage districts. The lower Kenai Peninsula and Kodiak districts (31, 32) voted in favor of repeal by margins of 56-66 percent, and Southeast Alaska (districts 33-36) voted 55 percent to 71 percent in favor of repeal, with Juneau’s 71 percent the higher pro-repeal vote in the state. Southwest Alaska districts centered on Dillingham and Bethel also voted in favor of repeal, but by smaller margins, 51 percent in the Bethel-area district and 54 percent in the Dillingham-area.

The strongest support for retaining SB 21 came from district 30 (Kenai, Soldotna), where voters opposed the repeal by 68 percent. Voters in the Matanuska-Susitna Borough, and down the highway into Anchorage from Chugiak to Eagle River, JBER and Russian Jack (districts 7-16), supported retention by 53 to 64 percent, with six of those districts at or above 60 percent in opposing the repeal.

Anchorage area districts 21-28 (Turnagain, Sand Lake to Rabbit Creek, O’Malley) opposed repeal by margins of 50 to 64 percent.

District 39, Nome, and 40, Barrow, Kotzebue, voted 63 percent and 52 percent, respectively, against repeal.

Winners pleased

A statement from No One On One, Alaska Native corporations opposing the recall, called the vote “a significant victory that shows Alaskans are looking to the future.” The corporations in No One On One are Arctic Slope Regional Corp., Doyon Ltd., Cook Inlet Region Inc., NANA Development Corp., Bristol Bay Native Corp. and Bering Straits Native Corp.

The corporations said they believed repeal “would take Alaska back to an old tax system that was broken,” and noted that during the election they told Alaskans “how the old law, ACES, did not create new oil production.”

The major North Slope producers made no secret of their opposition to the recall, which would have returned the state to the production tax instituted under former Gov. Sarah Palin, ACES, Alaska’s Clear and Equitable Share. They funded an extensive ad campaign against the recall.

“Alaskans have made it clear they are interested in moving forward and improving Alaska’s long-term economic future,” BP Alaska Regional President Janet Weiss said in a statement emailed after the election. “We agree with the voters that oil tax reform is working, and BP is committed to doing its part to make sure that continues,” she said.

A statement from ConocoPhillips Alaska, provided in an email by company spokeswoman Natalie Lowman, said the company is “encouraged by the election night results that indicate Alaska voters support retaining More Alaska Production Act. MAPA has improved the investment climate in Alaska and provides the basis for a more positive long term outlook for Alaska’s economic future.”

“Since MAPA was passed, ConocoPhillips has added rigs to its operations and announced plans to invest in projects that will add production, create jobs and business opportunities for Alaskans, increase the taxable revenue to the state and increase contributions to the state’s Permanent Fund,” the company said.

SB 21 has been touted as a way to increase oil production and as time passes the impact of the bill will be measured in terms of North Slope crude oil production.

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