Wilson reflects on 14 years in Juneau

Wrangell Republican says communication across the aisle has improved, encouraged by Parnell oil tax change, progress on gas line

Steve Quinn

For Petroleum News

House Rep. Peggy Wilson is closing out her 14-year career with the Alaska House of Representatives, having spent the last four on the House Resources Committee.

The Republican from Wrangell is among a few who have held public office in two state Legislatures, North Carolina and Alaska, giving her 19 years in office between the two states.

In seven terms, she’s been around for some of the most hotly contested debates over oil taxes - from the Petroleum Production Tax to ACES to the newly minted More Alaska Production Act - and natural gas pipeline proposals: the Stranded Gas Development Act; Alaska Gasline Inducement Act and the recently passed Senate Bill 138 that brings the state into partnership with North Slope leaseholders ExxonMobil, ConocoPhillips and BP, plus pipeline company TransCanada.

Her last two years may be the most memorable, starting with Gov. Sean Parnell’s tax rewrite that survived a voter referendum and, she believes, put the state on the right track, having been derailed by Gov. Sarah Palin’s Alaska’s Clear and Equitable Share plan.

One of her final votes backed Parnell’s gas pipeline/LNG export proposal to draft a development plan with the industry and bring it back to the Legislature for approval late next year.

By then Wilson will have to read about it from her Wrangell home, leaving it to a yet-to-be-elected successor to cast the next vote.

Wilson spoke to Petroleum News, reflecting on her time in office and what the state needs to advance its resource development prospects.

Petroleum News: What stands out to you the most when it comes to resource development?

Wilson: I believe we can do resource development responsibly. I want to put that caveat in there. We have to do it responsibly. We don’t have a chance if we don’t. If we want to continue and sustain what we have, we have to do it responsibly. However, we have not been able to do a whole lot because every time we try to do something we get stomped by people who are opposed to any kind of development.

Petroleum News: So what can be done to advance this?

Wilson: I think nothing is going to happen until we have a different administration in Washington, D.C. I think we will have not too much trouble with the gas pipeline because it’s clean. However, the people who don’t want anything to happen, they are not realizing things taking place in our world. They want things like electric cars and all things they believe are not going to use our disposable resources. All the things they want, all the technology and all the electric car batteries, the cell phones, all of those things they want, it takes resources out of the ground to make them happen. They can’t have what they want and keep doing what they are doing with lawsuits.

Petroleum News: So what do you believe have been the state’s biggest achievements in the 14 years you were in office?

Wilson: I think that we are doing better at communicating across party lines in the Legislature. We are further along than we’ve ever been on the gas pipeline, and that’s been in the works for over 30 years. I also think we are starting to get a transportation plan in place for our state so we can expand our infrastructure.

Every single state has infrastructure in place so people can get from one place to another before they start growing.

We need that. The other areas of the state need it. We need to start looking at how we can move people so that they can get from one spot to another for work. I’m not talking about one specific road but roads.

Most legislators - and this is something I’ve found over the years - have a very narrow view of what’s best for the state. Their view is how can I get the most money for my district; therefore they are not united as a whole of what’s best for Alaska as a whole.

We are state representatives. We are not district representatives. Now we represent our district of course and we want to do what we can for our district, but we should look first at what’s best for the state as a whole to grow. We all flow to the top together.

That’s connected with a state fiscal policy. It’s very hard to get a state fiscal policy because everybody is fighting for a piece of the pie. You have to look at the whole state to make things happen. If you think about it, the fiscal policy is a small group. It’s never been a majority, and that’s sad.

Petroleum News: Does that become more important as the state has to contribute a share for a gas line?

Wilson: Definitely. We are in a bust cycle right now because our revenues are down. They are down because we didn’t have the right tax policy in place for Alaska. For instance, when you look at Canada and you look at Alaska. When we put ACES in place, and I’m saying we as a Legislature because I didn’t vote for it, Canada saw what we did and they changed theirs, too. They saw what was happening quicker than we did, and they changed back. They saw the writing on the wall - they changed, and we didn’t. We were not incentivizing the oil companies to have more production. It was counter intuitive. The more they produced, the more they paid. Why would they want to produce more?

The companies in Alaska, their machinery in Alaska has to fight within their company, has to fight on the worldwide market for investment. Take Exxon. They have people in Australia, Africa, all over. Those people, including the ones in Alaska, fight for a piece of the pie. Where is the company going to put their money? Where they make the most money. And it sure is not Alaska. Granted Alaska is safe as far as we are not at war. Did we incentivize them to put money in Alaska? No we didn’t and we saw the result. We still have people fighting us to keep that tax structure.

We will see some changes now, but it will take a couple of years to ramp up. We will see low revenues, for sure, three to five years. I would even say three to seven years. We have to look at the writing on the wall and see what the consequences are from our actions or our inactions, so it’s going to be tough.

Petroleum News: You mentioned people still fight this. Why do you suppose this debate went on for so long?

Wilson: The only way I can explain it is, I went to Colorado Springs for a legislative seminar. They put us all into five different groups for personality types. They told us about some people who were very outgoing, constantly visiting with other people. That was their personality type. In fact, during the session, they weren’t even listening all the time. They were out talking all the time.

So my personality was that my brain looks into the future and it realizes things. Ours was the smallest group. During that time, they trained us on how and why we had to be careful. They said you will have these visions and go forward with it, but you will turn around and no one will be following you. I said, how come? I used to get really upset with people. I thought they were being bullheaded. The trainers said, others don’t get it and don’t see it that way; they don’t see it your way.

So it’s kind of like our political philosophies in life. The Democrat philosophy is give people fish. The Republican philosophy is teach people to fish. We just think differently. So it’s difficult to get a bunch of legislators to do one thing and come up with one plan. Our brains aren’t capable of always seeing what the other people are seeing.

Petroleum News: So with that in mind, what would your message to your colleagues be these next two to four years as you continue to pack your boxes?

Wilson: People are going have to work harder on personal relationships. That’s hard. Even within your own caucus, it’s difficult.

We used to do it better when we had 120 days of session. We were in Juneau and we had time to get to know each other and understand each other. Now that we are down to 90 days, we don’t have time for those personal relationships.

You have to take time for that. They are going to have to work harder at getting to know each other better. When they are friends they are more open to trying to understand each other and where they are coming from.

Petroleum News: Let’s look at the gas line, the last piece of major legislation in your tenure with the Legislature. What do you believe has been accomplished thus far?

Wilson: We are making progress - definitely making progress. We are in the lull right now while we figure out if this is going to be economically feasible. I think they are looking at the three Ps - public, private partnership. I think it’s going to take that to make it happen. But right now the state doesn’t have the money. I don’t know how the companies are going to do it. We have silos (systems) yet we are trying to pull everybody together at the same time. It’s pretty difficult to do. If we can pull this off, it will be one of the first times in the world that something will be done this way. The state of Alaska can make deals and so can the companies make deals. We aren’t going to tell them what our deals are and they aren’t going to tell us what their deals are. So that makes it tough.

Petroleum News: You mentioned the Arctic for development and how a change in the administration might loosen some regulatory burdens. Do you see that happening soon?

Wilson: That remains to be seen. It’s not going to happen under this administration. I’m hoping it will happen under the next administration. We are hoping the courts will step and get things taken care of early rather than later.

Petroleum News: What would you say was the toughest time for the Legislature? Would it have been the 2006-2007 block when the cloud of corruption hung over lawmakers?

Wilson: That was such a crazy time. It was just an embarrassing time for our state. But I think the worst time is now because the Legislature during the good times when the money was rolling, all they think about is how to spend it and they are not always wise on what’s best for the state as a whole. I do not think we were wrong in having big capital budgets. The reason I think that is because if we wouldn’t have had the capital budgets that we had - and they were high - if we wouldn’t have had them, Alaska would have gone through the terrible dip that the Lower 48 did. But we should not have been throwing bunches of money and growing the operating budget.

The operating budget is the budget that we have to contain. We have to constantly look at are there redundancies? Is there a better way to do this? Can we take this program here and that program there, then merge them together to do the same thing with less and still not hurt the service? We didn’t do those things. I think that is sad.

Now we are going to be forced to. No matter what we do, people are not going to be happy. I have found even if you did the right thing all the time, people are going to be upset with you. Legislators have to realize that. Sometimes they try to please too many people. So it’s the operating budget has to be curtailed and not let it grow. It grew every single year. Now we have to say, we need to keep it down to 1 percent, so that we could sustain it.

Remember when we got rid of the longevity bonus. When we got rid of the longevity bonus that made so many people made. Let’s face it we might have been able to do it differently. Once people have something and you take it away, you’re in a no-win situation. We’ve put ourselves back into that position with all of our departments.

We are going to have to cut back and you know what people are going to be mad. They don’t care as long as it doesn’t bother their corner of the budget. But when it bothers their budget, they come out of the woodwork. They are the same people who say cut the budget, we’ve got to be careful, but just don’t do it in my area. I think the time coming up in the next few years is going to be very difficult for legislators. It goes back to ACES.

It’s easier to take a step back and look. Then you see some things you don’t like. It’s going to be hard; they are going to have to do some things they don’t want to do, but they are things they have to do. In the past when we made cuts, I think some of it was a little fat that we got rid of but this will be interesting. Even last year when we held the budget back, we did it in ways that didn’t hurt the services. In the next few years they will have to hurt services.

Petroleum News: So where do you think the state’s biggest promise lies when it comes to resource development?

Wilson: I would say, is right now, the promise is we are going to see what we can do. I don’t think there is anyone saying there’s a promise we are going to get a gas line even if all of our data shows it’s impossible (editor’s note - AGIA was to go forward even if there were no takers at an open season). We do promise that we are going forward to fully evaluate this in every way that we can to make it happen if we can. As far as the Arctic goes, we can’t do a lot of that until Washington, D.C., changes some things. One of them is being part of the Laws of the Sea. Alaska will lose out on so much if we don’t get that taken care of.

The other thing is other countries are already taking steps and doing things to make sure they have a place in the Arctic and the United States hasn’t done that. The development will come. It will come up through there and if we are not prepared, they will just say move out of the way. There will be an oil spill and the traffic will increase tremendously.

Petroleum News: So you’re saying the future is we’ll see what we can do?

Wilson: I hate to think of it that way, but there are a lot of things up in the air. If we can get some things settled within the Alaska area and get some priorities to see what’s best for Alaska as a whole, I think we can get some things done. We have to look at Alaska as a whole and stop chopping it up into districts. When you do that, then Railbelt has all the votes and we don’t do what’s best for Alaska because the other areas where our resources come from don’t get taken care of like they should. So a lot of it is going to be up to the Alaska Legislature. In the Arctic, we can be ready and be ready to do what we can. We are going to have to spend some money up there and we don’t have the money to spend right now so it’s going to be really hard to look at priorities overall and make those decisions. As far as the gas line, we just won’t be able to afford it without the private and public partnership.

Maybe the people of Alaska, if they get a chance to own part of the pipeline, if that can be worked out, I think that can help a lot, something like saying put my Permanent Fund Dividend toward that. It’s been talked about and will be again. Somebody in the Legislature will bring it up. There are so many different factors right now, I wish I could make the right recommendation, but I can’t.