Wake Up and Smell the Giveaway

Oh, Boy.  $1,000,000,000 + and that is just a start of the serious money that the State of Alaska is proposing that we give away to the oil industry, those very same companies that posted record profits. And what for? To protect oil companies from the vagaries of the free market system.  The governor and all of our locally elected officials that represent the Kenai in Juneau would give this amount of money and more to the oil companies without actually requiring them to guarantee that they would do more exploration or drilling. BTW, the state has already given these companies about $3,000,000,000 in breaks in the last four years with no guarantees.  Guess what? In this case, you don't get what you pay for. If you haven't read Mike Doogan's take on this, you should click here.

So, the oil companies are stinking rich, the state is flush.  Why the rush to promote development by giving away subsidies to the filthy rich?  What happened to free market system dictating development?  Why are those who decry government bailouts for the bankrupt auto industry the first to want to bailout extremely profitable oil companies? 

And then Mike Chenault has this piece in the Clarion about how we need to act or opportunities will pass us by.  Wow, that sounds we should do something and do it now, but just what are you proposing Mr Chenault?

Some other competitor beat the price that Conoco and Marathon was selling LNG to the Japanese.  Business happens.  And it wasn't because of regulations or taxes - with new technologies, new fields in the world and a glut of natural gas on the market, Alaskan natural gas is just priced out of the market right now.  Is Mike proposing that the state subsidize an in-state pipeline when there is not much of a market for the product?  That smacks of something that is not free-market capitalism to me. Well, Mike really doesn't offer much of a plan as there are no facts, no figures, no projections, just some sort of sense of impending doom and gloom. 

Please, someone help me understand this.  Yes, we have oil in the ground and offshore.  Yes, we have tremendous reserves of natural gas. Does anyone really have any doubt that sooner or later, these fields will be developed?   Our state fiscal reserves are brimming, and while production is certainly down, revenues for the oil owned by the state are the envy of every other state in the nation.

And when the price is right, and it sure isn't now, the state will make a bunch of money, the oil companies will make a lot of money, but maybe you and I won't make a lot.  But maybe our kids and grandkids will.  We've already proven that we'll piss away what we get.  Let's hope that our kids aren't quite as dumb .

And if you are of the tea-bag persuasion, here's your golden moment.  If you really believe in the free market and no government bailouts, don those tri-corner hats and just tell those republican politicians in Juneau that garsh-darn it no, no more subsidies for the most profitable businesses on the planet. Yeah right.  I won't hold my breath.

Of course there is a fallout to it all.  By giving away our natural gas at subsidized prices to Agrium and their fertilizer plant and to Conoco and Marathon to sell to the Japanese, enough natural gas was produced to offer the citizens of the Kenai the gas at relatively affordable prices.  Now that the free market is about to reclaim its place, we are all going to give more to Enstar.  The free market sucks when you have to pay market prices, but that is the way supply and demand works, isn't it?

Now imagine that we got smart.  Instead of paying $500,000,000 to Transcanada for looking into building a natural gas pipeline across Canada (surely that will create a lot of AK jobs), instead of giving the oil companies over $4,000,000,000 in subsidies, instead of thinking about giving  $150,000,000 to the Knik Arm Bridge developers, instead of the $11,000,000+ to study The road to Nome which could cost a few billion by the time it is completed, instead of funding the $5,000,000,000 Susitna Dam, let's take that all of that money and begin moving AK to sustainable clean energy (and maybe on a local rather than grand scale), fully fund our universities to attract and keep the best and brightest minds, help more homeowners make their homes energy efficient (and reducing the demand for more fossil fuels), develop viable mass transit and promote and develop businesses and industries that match the needs of the changing world?

Then our kids and grandkids might have a fighting chance.