My colleagues in the House of Representatives have recently appointed me Chairman of the Legislature's Special Committee on Oil & Gas beginning in January and continuing until 2005. This is a pivotal position because the majority of Alaska's economy is based on the oil and gas industry.
With a Republican President, Congress, Governor and Legislature, chances are good that a major expansion of the industry will take place. As an advocate of responsible development of Alaska's natural resources, now is the time to act. We can start by removing unnecessary regulations and restrictions on the industry. Rational, limited and consistent laws and regulations should characterize our relationship with oil companies, indeed all private enterprise. Let the regulation fit the activity, not force the activity to fit the regulation.
As head of the Oil & Gas Committee, I will focus on three major areas: (1) make plenty of high potential lands available for leasing. (2) streamline the regulatory and permitting process by removing all but the most necessary steps to exploration and development. (3) create industry confidence in the Legislature by maintaining a consistent policy of low taxes. Low tax rates stimulate economic activity and result in higher tax revenues, just as high tax rates discourage development.
If we don't change the way we do business, we may suffer the same fate Seattle did when Boeing pulled out thousands of employees and relocated them to Chicago where it could act in a more favorable regulatory environment. In addition, opportunities for developing oil and gas abound throughout the world such as China, Russia and Indonesia, so we face fierce competition.
Governor-elect Murkowski has stated his desire to spur growth in the industry. I agree with him that the answer is not to introduce new taxes to people, but allow them to create wealth unhindered. In other words, we will achieve prosperity if the goal is not to tax anything that moves but rather encourage private enterprise, including oil companies, to invest their dollars here.
If we keep taxes low and lessen government controls, industry will come to us. So will classes of people who are industrious and creative. To simplify, we should discontinue the failed policies of the past. Instead we should work closely with the oil and gas industry and be thoughtful in our approach to and assist it in improving and becoming the centerpiece of a strong economy.
If a stable and reasonable business climate is created, over time we can become a desirable place to do business. We ought to find ways to work in harmony with Alaska's producers and let the free market process work its magic. We'll succeed if we're vigilant and pursue long-term stable policies.
I love Alaska and want to keep it clean, beautiful and prosperous as any reasonable man would. But oil companies do not have to be regarded as the "bad guy" and always the polluter. They have been good to Alaska both economically and environmentally, and continually strive to improve and innovate.
It's most revealing that in Alaska's two most dramatic oil spills, the Exxon Valdez and the pipeline shooting, it was the irresponsible use alcohol that was instrumental in both cases. It wasn't the industry's fault. Oil companies have been careful with their product and have done a good job over the years in keeping their activities environmentally safe.
Lest I be criticized for "caving in" to Big Oil, I wish to say for the record I have always maintained my faith in free enterprise and with modest amount of government interference. We should, as regulators, see that oil extraction is safe for employees and the environment, but not to egregious lengths. Oil and gas development should be treated like any other business-fairly and with minimal intervention.
Let's not kick the goose that lays the golden egg!
# # #
Vic Kohring is a fifth term Republican, representing Wasilla in the Alaska State Legislature and is Chairman of the Special Committee on Oil & Gas.