Governor Sean Parnell: Lord of the Flaming Pants
Former director of government relations in Alaska for ConocoPhillips, Sean Parnell made an announcement on Tuesday.
Some of you may know him by his other job working for the lobbying firm that represented ExxonMobil against Alaskans in the matter of a little oil spill that happened in Prince William Sound.
Some of you may also know him as Captain Zero, or Caribou Ken, or SeanocoParnellips.
However you know him, he also currently wears the mantle of Governor of the State of Alaska. But it’s been difficult for Sean to turn against his old bosses. He’s a loyal foot soldier, and suddenly throwing his old pals under the bus to help the annoying bad guys that want to ruin the oil company’s fun (us) has been hard. It’s been so hard for the poor man to switch loyalties, that he decided not to.
Top on the list of priorities for Parnell has been to figure out how to take $2 billion a year from the state’s coffers, and siphon it away from Alaskans – away from schools and roads and other annoyances – and tuck it sweetly into the pockets of some of the wealthiest and most profitable corporations that have ever existed on the planet. This is a tough sell, as you can imagine. It requires a little creative thinking to make people support policies that work against their self-interest. It takes some finessing of facts to make Alaskans pull out their hankies when the oil companies start playing their tiny violins and telling us that they love us really, but if we don’t fork over the cash they’ll have to go elsewhere, to other places in the world where they currently do business, like… Libya. And even that’s a tough sell because Libya takes more money in taxes from the oil companies than we do.
There are all kinds of reasons that the story doesn’t hold water. You can refresh your memories by clicking HERE. And we do have legislators like Bill Wielechowski, Les Gara and Hollis French who haven’t sold us out and continue to speak truth to oily power.
But that doesn’t stop Seanoco from spouting his talking points at any opportunity, even when he’s not telling the truth. And that brings us to Tuesday’s announcement. I couldn’t find a video of Parnell spewing the latest oil company misinformation, but this is pretty close.
Once a year, every man, woman and child in the state gets a check, and the check comes from oil. You see, Alaskans (as is written in our state’s Constitution) actually own our own resources. It isn’t like the Beverly Hillbillies where an individual gets rich by a random discovery of “Texas Tea” in the back yard. In other places, that’s how it works and it’s up to you to negotiate, through an attorney, how much the oil company will pay you for the right to develop your resource on your land. In Alaska, all the oil belongs to everyone. It’s communal. It’s sneaky socialism. Nobody really likes to talk about that, so keep it under your hat. But, at the end of the day, nothing makes tough, self-reliant, socialist-hatin’, liberty lovin’ Alaskans happier than a little free money.
So, this Tuesday was PFD day, when Alaskans learned the amount of this year’s Permanent Fund Dividend check. The happy day saw the governor stand before the masses, and open a fancy golden envelope containing the highly-anticipated figure. But despite the non-partisan cheer that sweeps the state on this day, Seanoco just couldn’t help himself. He had to pull a little legislative agenda about rolling back oil taxes out of the golden envelope, and a big fat fib.
He warned that “Alaskans can face diminishing dividends based upon the current dividend calculation because, in part, poor performance of the stock market, and then additionally over time because of declining oil production there will be fewer and less royalties going into the Permanent Fund unless we turn that around.”
Now, most Alaskans don’t know the finer points of the calculation of the PFD, and probably assume that this is all complicated stuff. And if the oil lobbyist in the governor’s chair tells us that unless we give the oil companies that $2 billion a year, things will be bad, then we’d better not mess around. The check ($1174. this year) is good now, but in the future, unless we do what the governor says, all that free money could go away. “Diminishing dividends”… a collective chill runs up the spine of the public. And yet another governor of the great state of Alaska proudly sports
the Flaming Pants.
Let me hold your clammy hand and explain. Or better yet, let Rep. Les Gara explain, as he does so well:
Here’s how the Dividend is calculated. The Permanent Fund grows every time a barrel of oil is sold. Roughly 25% of the royalties we get when we sell oil gets put into the Permanent Fund- which hit $40 billion this year before the last stock market dive. As more barrels go in, even in the case we’d like to avoid – of declining production, the Permanent Fund Grows.
So, even with declining oil revenue, the Fund will get bigger.
Your dividend is calculated based on the size of the Permanent Fund (which grows as each barrel of oil is produced), and the last five year income average the Fund creates. In good stock market years, the Permanent Fund Dividend is bigger. In bad stock market times – which we’ve had scattered over the past 13 years – the Dividend is smaller. But with any oil going through the pipeline, the Permanent Fund grows, and the chances for a bigger dividend – depending on the stock market – increase. On average, assuming there is a steady stock market (like that’s ever going to happen) the dividend will grow even in the worst case scenario of declining oil production. So, the Governor’s statement that declining production will shrink the Dividend was fear-mongering of the worst kind. Based on a very inaccurate garbling of how your dividend is calculated.
If anything, with the Governor’s oil tax giveaway, this state will burn through its savings, and folks will start clamoring to spend the Permanent Fund. If anyone jeopardizes your dividend, it’s the Governor and his plan to roll back oil taxes, with no requirement of additional exploration or investment.
Did I mention that? The $2 billion a year the governor wants to hand over to the oil companies comes with no strings attached. They don’t have to hire Alaskans. They don’t have to explore. They don’t have to increase their investment in Alaska one little bit. Exxon and BP even said in a committee meeting that they won’t be doing more exploration in new places (the basis for the governor’s plan), and ConocoPhillips said they “wouldn’t commit.”
It’s sort of a good will gesture, you see – kind of like handing over your lunch money to the class bully and hoping for the best. He’s never been nice to you before when you gave him your lunch money, and he won’t commit to being nice to you now, but you just never know. Yes, we are the pathetic friend.
Before I go give my lunch money to … the lunch lady (Pizza Friday!), I’ll leave you with a parting thought from Les Gara.
So – his bill will likely cost us about $1.8 billion a year ($8 billion over 5 years) in revenue we need for schools, roads, and savings; not increase exploration; and is built on three premises we now know are false. He said jobs were down. They’re up. He said the bill would lead to more exploration in new units. The Big Three have said not to count on that. And now he says the dividend will fall if his plan doesn’t pass. That’s not only inaccurate; it’s fear mongering-ly inaccurate.
Let’s have a debate. But every time someone throws a misstatement at you, I’ll try to clear up the record. Debate on the merits is tough. It’s unfortunately too easy, with a dwindling press, for politicians and interest groups to get away with, um, how do I say this politely – inaccurate statements. Level 10 Pinocchio Meter inaccuracies.
You can leave your questions in the comments. Enjoy your lunch!
[If you want more information on the oil debate, here is a PowerPoint and video of Les Gara’s presentation last week to the East Anchorage Rotary Club and his last op-ed on oil tax policy.]
Yeah, he is so full of BS that his pants caught on fire. Wish his term would hurry up and end. We in Rural Alaska are being ignored once again. He has no interest in dealing with the Bush People.
I’m thinking the Gov wears polyester britches and the fumes they put off every time he ignites them have addled his brain even more than all the sniffing oil and gas he’s done has.
So- back to back with this stoopid lying stuff about how the fund is set up and managed , we have his Rev Commish tailor -making an argument for rollback of ACES:
http://www.adn.com/2011/09/21/2080675/revenue-department-works-to-strengthen.html
Will comparing our Alaska oil situation really be similar to the situations North Dakota and Alberta, Canada are in?
Do we trust that a tailor made argument really looks at anything other than bolstering a POV we’re deeply wary of?
Do I believe for one second that this Gov and his Revenue commish are really open to any other ideas? Pffft.
Seems now-a-days it is un-american and un-patriotic to not want to lay your all at the feet of the rich.
And don’t forget, now you only honor the “right’ kind of military men and women.
Are we still paying Canada for the natural gas pipeline that isn’t being built?
Yes msueeck:
the State of Alaska continues to be responsible for the deal made in 2008. However, we haven’t had to fork over the whole $500,000,000 ($500 Million). Last session of the State Legislature began questioning details of performance and other very significant aspects of our ‘resource management’ (SOA).
One aspect is the accounting (or non accounting) methods utilized. Maybe this missed press interests, but not mine. Multiple employees with the Dept. of Revenue (or whichever department documents reports from the Oil Companies), can change data thru obsolete computer programs, and apparently in some instances, paper ledgers were offered up considered as official. We are forever grateful to the SOA Senate for their demand for lots better information than the SOA Administration offered.
At this time it appears to me that registered voters need to contact each SOA representative and SOA Senator and insist for better information than you had in April, 2011. Our State representatives have actually been working to collect information to help deliberations in the next session. I, for one, am very grateful.
nem
Let’s see – Parnell vetos funds to fix school roofs and to buy parks but we have enough money to hand the oil companies $2 billion.
Oh, my. It never ends in Alaska, does it? Who needs oil for heat and light when you have all those pants on fire.
That’s actually contributing to speeding up global warming at an alarming rate. If we could just put the fire out on all those flaming pants….
Thank you AKM for bringing this to light. I also think Representative Les Gara for clearing up the record. He explained it well.
Bravo, AKM. You nailed it and made us laugh too.
Lord of the [Flaming] Pants!
I’m guessing this number featured an entire company as back-up to the principle “pants”er. Hopefully the tour will wind down soon.
DH Happy posits that Mr$. Todd Palin rarely appears in pants
because
hers have all long since burst into flame.
Those flaming pants are Almost Bright Enough to see by, eh?
and not just in Alaska.
Thank you, AKM and Mr. Gara, for shining a clearer light
on Alaska’s socialist, er, Permanent Fund and the dividends.
“…not only inaccurate; it’s fear mongering-ly inaccurate. Let’s have a debate. But every time someone throws a misstatement at you, I’ll try to clear up the record.”
I heard a call to action.
To speak out.
To let our little lights shine.
in solidarity against fear mongering
and distortions/misstatements/lies
also, too.
L’Shalom,
thatcrowwoman
Thanks, AKM and Les Gara.
Tax the profits, and offer tax credits for investment in future production.
Great article AKM (and Les!). Yes, we Alaskans do love our ‘cut o’ the land’ every October, and as evidenced in Parnel’s talking points the demise of the Permanent Fund is a tried and true fear mongering topic that politicos up here use to prop up their oil company loving rhetoric. Hopefully the majority of Alaskans’ ‘once burned twice shy’ mentality to not be fooled again (think Palin) will cut through Parnell’s deceptions like a hot knife through butter.
On a side note I’ve always thought it was odd (and very frustrating) that Paylin got a free pass from the press (both Alaskan and National) to trumpet her anti-socialist views while simultaneously avoiding any serious scrutiny on her pro-socialist, pro-tax tendencies while being governor. These would include supporting the increase in tax on oil companies so that we Alaskans could get our ‘fair and equitable’ share as a collective people, and also was instrumental (although not solely responsible) for helping to bring about an additional payment to every eligible Alaskan that was tacked onto the already high yearly dividend check that came from said increases in oil taxes.
I know that many who were not from Alaska were largely unfamiliar with the Permanent Fund Dividend and related Oil company/Taxation issues and as such Palin was able to squirmish her way out of that topic, but again most of Alaskans knew exactly what she had done and indeed how very socialistic it was. (And by the way that is one of the few things she did early in her governorship that I agreed with and supported).
Speaking of squirmishes, will we hear any more re your info on “Palin’s free pass from the press” (see? not OT at all!) — I mean the cutting-room floor items that you might have included in your book but did not? I sure wanted to hear them. Are there any more? Or was that it??
Is Amy a troll???
Sarah must be so proud of the legacy she left Alaska. And tell me why this isn’t socialism again?
I do not understand why the dividend is less this year than last, after the very poor year 2006 dropped off of the 5 year average?
I understand less money, more people….
647,549 Alaskans were deemed eligible to receive dividends, and about $760.2 million is expected to be paid out.
Last year, $783.4 million was paid to 611,522 people
…but WHY is there less money?
The Alaska Permanent Fund returned 20.6 percent for fiscal year 2011 according to unaudited figures released on Tuesday. This is the third highest return in the Fund’s history. “We’re very pleased with the Fund’s performance this year – it’s been an outstanding year and we enjoy the chance to report such good news,”
The fund earned $2.1 billion in statutory net income. (In 2010 the fund earned 1.6 billion in statutory net income) This is the value that is used to calculate the annual Permanent Fund Dividend, which will be distributed to eligible Alaskans in the fall. Based on this calculation, the APFC will transfer $800 million to the Permanent Fund Dividend Division for the dividend payment. The dividend transfer for the distribution in 2010 was $858 million.
More statutory net income= less money distributed to all?? This makes no sense to me. Please help?
Laura:
Remember the PF Dividend is calculated with a 5 year average. The market has been particularly squirrely since 2007. We lost a huge amount of money (percentage wise and on paper). Remember the “analysts” say hold ’em. And next year could be just about equal to this year because the market indicators of the then past 5 year could be no more than now or less, depending on the investments.
nem
…let me guess….he’s a republi-CON, right??? now it all makes cents…..or lack thereof…..
I’ve yet to hear anyone explain with a straight face how one company clearing $2billion per year “isn’t profitable.” I bet there are a lot of businesses who *wished* they were that “unprofitable.”
Think in relative terms. If a company can be more profitable somewhere else, they will go somewhere else. Corporate management has a duty to get the shareholders the best return possible, and if they aren’t doing that, they don’t have jobs long.
It’s also misleading to talk about the number of jobs in total terms. Yes, maintenance jobs are up, which is to be expecting with an aging pipeline, but those jobs don’t produce the oil we need to go through the pipeline.
That said, Gara is right – there should be strings attached to tax reductions. It’s working on the exploration side, so should work just fine on the production side as well.
I’m late into this discussion, apologize.
ValleyIndependent: BP owes us (Alaskans) huge maintenance and techology upgrades. Sure they have been fined alot. (You don’t hear them challenging those fines.) BP takes the hits because they are ‘in charge’ of the production infrastructure on the North Slope. And, they have not performed their necessary preventive maintenance. All of that is on a preset schedule and it was obviously ignored.
Those of us who have watched Exxon scam the State of Alaska at Point Thompson for 30 years shake our heads in wonder. Given one leasehold, Exxon is still not producing.
What is wrong with this picture??? nem