Permafrost Friday: A Hair Raising Week
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Dazed & Confused: The week that was...
November 19, 2009: With all love and respect to my grandson Wyatt, this week wasn't just a hair raiser for him...I think it left a number of us dazed and confused.
On Tuesday, Alaska's former 1/2 term governor released her highly anticipated autobiography. While crowds in Michigan and elsewhere standed in line to buy her book, get a glimpse of Palin and maybe a picture, back in Alaska the economic mess she left the state in was quickly coming into picture.
On Wednesday in a surprise move, the man Palin hired to study an in-state gas line resigned his position. Lawmakers say he was forced out because of pressure from DNR Commissioner Tom Irwin who viewed Noah's work as a threat to his AGIA project.
Irwin was hired under Palin and has done more than any other DNR Commissioner in recent history to risk the state's economic future by tying Alaska's gas pipeline hopes to his ego and a failing strategy that Palin has very Palin-esqly termed competition.
The only competition with AGIA is for who was the more foolish of the two; Irwin for creating AGIA or Palin for supporting it and then lying to the country that it was responsible for building the gas pipeline when in fact no such pipeline is being built.
On Wednesday, while Palin was on Rush Limbaugh in New York talking about how the key to the economic mess is lowering taxes on job creators, Alaska's job creators were in downtown Anchorage complaining about the taxes that Palin hiked two years ago.
When asked by Limbaugh about how to get the economy rolling again, Palin responded:
What we need to do is shift gears and really head in another direction because what we're doing right now with the Fed, it's not working. We need to cut taxes on the job creators. This is all about jobs, creating jobs. We have to ramp up industry here in America, and of course reduce the federal debt, quit piling on and growing more. But those commonsense solutions there, especially with the cutting taxes on the job creators, that's not even being discussed.
Commonsense solutions. Like raising taxes to some of the highest marginal rates in the world on an industry that provides ninety cents out of every dollar state government spends and is directly responsible for one in three jobs in Alaska?
Meanwhile, three thousand miles away from Palin's lecture on the importance of lowering taxes, Alaska's North Slope oil producers were delivering the bad news at the annual Resource Development Council meeting.
Due to the high cost of doing business, competition for company capital spending and the new production taxes Palin jacked up two years ago called ACES, North Slope producers will be spending less, employing less which means less production.
Helene Harding, ConocoPhillips vice President of North Slope operations and development announced that for the first time in 45 years the company will not drill a new well in 2010. Harding went on to say that the company is shifting its focus to federal lands, which have a far more attractive tax structure than state land.
Conoco has repeatedly warned over the last two years, including on Wednesday, that it believes the Palin's recent revisions to oil taxes will harm industry investment and cause job losses.
Another speaker, John Minge, president of BP Exploration (Alaska) Inc., told RDC members his company faces three big challenges in Alaska right now: oil production continues to decline, costs are rising and taxes have increased.
He said it is more appealing to an oil company like BP to invest money in the Gulf of Mexico than it is in Alaska right now, because the tax structure "is more inviting there." In August, BP struck a huge oil field in Mexico's deep water gulf which has renewed significant interest in the area.
BP has announced that they will cut capital spending on the North Slope by 15% in 2010.
Minge also that one of Alaska's key future revenue generators, North Slope's huge amounts of heavy oil, is not economic to develop right now given current oil prices and again, Palin's ACES tax structure she pushed through in 2007.
This is not a good trend. Oil field developments take years to begin production and companies cutting back capital spending today means negative impacts on those timelines tomorrow.
According to the Department of Revenue predictions, 35% of the oil we are going to need to pay the cost of state government by 2014 hasn't even been discovered yet. So with declining production and no new investment going into the ground to replace declining reserves, the economic future over the next ten years is not pretty.
Meanwhile, after jacking up taxes, putting the gas pipeline at risk by thinking government could force the riskiest oil & gas project in the world and then quitting her governorship and leaving the state with an unemployment rate at its highest level in decades, Palin is now touring the country selling Americans her common sense solutions for the economy.
The only thing common about Palin's commonsense when it comes to the economy is that it's commonly known Palin doesn't possess any.
She's never held a private sector job for any length of time, she's never made a payroll, paid business taxes or created a job. In fact before she stepped down in July, Palin had collected a government paycheck for nine of the last eleven years.
What next; lectures about babysitting from that idot in Soldotna who just burned his kids head with what he called a "redneck flamethrower?"
Meanwhile, if you are looking for a visual to explain it all simply grab a printed copy of Thursday's Anchorage Daily News.
On Page A-3 the headline reads: "Oil companies curtail work on North Slope."
On Page A-5 the headline reads: "Head of in-state gas pipeline effort resigns."
Then on the bottom of Page A-5 the headline reads: " Hundreds line up for chance to meet Palin, get autographed book."
It makes you wish this were a movie we were directing and we could stop the scene and do a second take.
"CUT!"
"Alright, lets try the last three years again, and this time lets do it without the gross incompetence."
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