After nine years in office observing the political process in Juneau and seeing the effects when I return home to Wasilla, I am convinced more than ever that our fiscal crisis is the result of overspending that can be overcome by simultaneously cutting the government bureaucracy and allowing our economy to grow. I believe we can create major new streams of revenue for ourselves, our families and Alaskans if we remove cumbersome regulations and impediments to doing business in the state.
As Chairman of the Legislature's Oil & Gas Committee, I have learned the oil industry (like many other businesses) operates under conditions that would please a Czar. There are controls, rules, paperwork at every junction. Lawyers are in constant need. Most restrictions are unnecessary and keep bureaucrats employed. This is not to say all controls are bad. Obviously we need to keep control of safety and pollution issues but from a reasonable point of view.
I worked on four major areas this past legislative session: a) creating sensible and fewer regulations, b) streamlining the permitting process, c) making more state land available for leasing, and d) advancing financial incentives. I have been trying to create an environment where government encourages instead of impedes business.
If we want a robust economy we have to make commerce in the state easier by letting business know we want them to succeed. We need few but objective rules. A climate of certainty is vital to old and new businesses alike that might get fed up and relocate outside Alaska.
To accomplish these ends, I sponsored or co-sponsored the following legislation, of which all have recently become law:
Would make it easier for explorers of shallow natural gas to be issued permits by cutting through vague, extraneous and irrelevant regulations.
Encourages drilling for oil and gas in fields that are not profitable, given the cost of the current levels of bureaucratic controls.
Opens the negotiation process between oil producers and the Governor, laying the foundation for building a gas pipeline if economically feasible.
Creates the legal backing to provide inexpensive financing to build a potential gas pipeline from the sale of low interest, tax exempt bonds.
Provides financial incentives for exploring new oil and gas fields.
After reviewing the oil and gas business all session long and hearing months of testimony, it is obvious there remains a vast amount of petroleum in Alaska. Oil companies will attempt to find and extract it only if we make it possible for them to do so without a legal challenge or government restriction at every turn.
We can eventually trim the deficit to zero by allowing the productive forces of our economy to work openly, competitively and with a good profit margin where all sides win. The oil companies need to have their books in the black so their stocks remain strong. If so then thousands of individual Alaskans will have employment opportunities. Successful businesses pour money into the state faster than they would if government constantly taxes and restricts them. As a matter of policy, it is always better to encourage new business activity rather than tax, tax and tax again existing enterprises.
The state's role ought to be to encourage the oil and gas industry (and all private entities for that matter) by serving them instead of bossing them around. If we foster a stable climate of minimal regulation that is rational and non-political, then the producers will do what they do best...create wealth for all of us. If we take action to shrink the bureaucracy, if we sunset programs that are marginal and non essential, we can nourish a new and long term boom in Alaska's economy.
Imagine an Alaska with no state deficit. Imagine political leaders who are stingy with people's money instead of profligate. Imagine an oil and gas industry producing a surge in our prosperity which would encourage similar advances in mining, tourism, fishing, and farming without government subsidies or interference.
I see a bright future for Alaska, a state where government is careful of public safety, where it has few but sensible laws and where creators of wealth are honored instead of denigrated. This is how we can get rid of the deficit and make Alaska prosperous again.
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Vic Kohring is a fifth term Republican, representing Wasilla in the Alaska State Legislature and is Chairman of the Special Committee on Oil & Gas and serves on the Transportation, Budget & Audit and Ways & Means Committees.