Alaska Natural Gas Tax Initiative, Measure 2 (2006)
The Alaska Gasline Now! Initiative was an initiated state statute that proposed to levy a tax on certain leases of known resources of natural gas, conditionally repealing the levy of that tax, and authorizing a credit for payments of that tax against amounts due under the oil and gas properties production (severance) tax if requirements relating to the sale or shipment of the natural gas are met; and providing for an effective date.
2006 election results
|Alaska Gasoline Now! Initiative|
|Yes or no||Percentage|
|Total votes||100% precincts|
Results according to Alaska Division of Elections.
Text on ballot
The language that appeared on the ballot said, "This initiative would impose a new state tax on certain oil and gas leases overlying large deposits of natural gas until a major gas pipeline system is built. The tax would be 3 cents a year per thousand cubic feet of taxable gas in the ground. Taxpayers who dispute taxes owed would have to deposit the amount of the taxes levied into an escrow account. If and when taxable gas is produced and transported in a major gas pipeline system, some of the taxes previously paid could be used as a credit against state gas production taxes due on the gas. Should this initiative become law?"
Case for suppport
In Brief: Supporters believed that the proposal would speed development at no cost to a gas project and expand state revenues, while not adversely affecting future oil and gas exploration.
The official text states:
We Alaskans own a resource worth hundreds of billions of dollars -- our natural gas. Yet, for three decades, we have received nothing for it: no jobs, no gas to heat our homes, and no money to fund our schools. Nothing.
The major oil companies say they might develop our gas by 2017. Then again, it may take another 20 years. Under Governor Murkowski’s proposed contract with the oil companies, they have only promised to study it and let us know.
If we wait another two decades for gas to flow, another generation of Alaskans will have been denied access to and the benefits of our own resources.
We need the benefits now. We need stable funding for vital government services that does not depend on corporate decisions made in Houston or London. We need a strong incentive for the oil companies to get the gasline moving now.
We need the Alaska Gasline Now Act. That is why 47,000 Alaskans signed the petition to give us all the right to vote on it.
Here is what the Alaska Gasline Now! Act does:
- It creates income from our gas resources now by levying a reserves tax on large deposits of natural gas that have been leased but undeveloped for decades. As a result, the state will receive an estimated $900 million dollars per year for our schools, roads, and other vital government services.
- It encourages construction of the natural gas pipeline by automatically repealing the reserves tax when the gas pipeline is completed. This creates an incentive for the oil companies to build it sooner rather than later.
- It promotes exploration and development for oil and gas by assuring new explorers there will be a gas pipeline in which they can ship their new discoveries to market. Any new gas found is exempt from the reserves tax.
- It treats the oil companies fairly by giving them a tax credit after the pipeline is built. They will get a full rebate if they act quickly to build the gasline. Delay costs money.
We have done this before. In 1975, frustrated by delays in building the oil pipeline, Alaskans needed revenues to fund basic government services. We levied a reserves tax on oil that was repealed after the TAPS line was completed.
We own the gas. We need to act like owners. No one else would lease a valuable asset and let it remain unproductive for 30 years. It is time for Alaska to take a stand for development of our gas and a stand for fiscal stability.
It is time for the Alaska Gasline Now Act. Vote “Yes” for Alaska’s future.
Governor Wally Hickel
Mayor Jim Whitaker
Representative Eric Croft
Statement in opposition
In Brief: Opponents argue that it will slow or stop gas development. That this initiative will reduce state revenues, while creating disincentives for both gas and oil exploration in the future.
Below is the official text of the statement:
Ballot Measure 2 discourages oil and gas exploration and development.
- Alaska’s oil production continues to decline, and we need new investment in oil and gas exploration and development. But, when explorers find oil, they also find gas. That gas would then be subject to billions of dollars of new taxes, making it less likely that the producers would make the investments necessary to find and produce more oil and gas. Alaska needs new investment, and this ballot measure would have a chilling effect on that investment.
The Gas Reserves Tax puts the Alaska Gas Pipeline in jeopardy and will delay its development.
- The Alaska Gas Pipeline would create thousands of jobs and generate new state revenue for roads, schools and other public services. The project is now at a critical crossroads. Alaska can choose to move forward with the project, or not. Ballot Measure 2 will jeopardize the gas pipeline, placing billions of dollars of new taxes on the project, while also discouraging oil exploration. Voting yes on this initiative puts Alaska’s future at risk.
Ballot Measure 2 would mean fewer jobs, less state revenue, and less money in the Permanent Fund
- Alaska needs the gas pipeline, with its thousands of jobs and billions in state revenue. Without the development of the Alaska Gas Pipeline, North Slope oil production will continue to decline, resulting in fewer jobs, less state revenue for roads and schools, and less money deposited into the Permanent Fund. This ballot measure could stop development of the gas pipeline and discourage new investment in Alaska.
The Gas Reserves Tax sends the wrong message to Alaska investors and employers
- No other jurisdiction in the world imposes such a tax, because it is simply bad public policy. The reserves tax punishes explorers and gas leaseholders and creates disincentives for future investment. Passage of the reserves tax would indicate to investors across industries that Alaska is not open for business and that our policy of stable taxation is eroding.
- Senator Ted Stevens recently expressed his view that “our opportunities are staggering, but we must attract investment if we are to realize this potential. The choices we make now will determine our ability to create a climate for investment in our state. If we choose to implement a gas reserves tax, we will discourage those who seek to invest here and we will put our future as a leader in natural resource development at risk."
We urge you to Vote No on Ballot Measure 2
John T. Shively, Former Commissioner, Alaska Department of Natural Resources & President, Board of Resource Development Council
Edward B. Rasmuson, Chairman, Rasmuson Foundation
Alaska's Future Alaska's Future is a "non-partisan 501 (c) 6 Trade Association which unites in a common organization businesses, business leaders, entrepreneurs, and associations of businesses that have a common business interest in promoting a robust economy in which Alaskans have employment security and improved employment opportunities and we believe it is essential for the health and prosperity of the Alaskan economy to seek actions by government officials and legislative bodies that fully reflect the business interests of Alaskan businesses of all sizes and that promote job security," according to it's website.
Alaska's Future is a group that emerged objecting the tax on gas line leases. The groups leader's included Shane Langland, George Culpepper Jr. and Brandon Maitlen as directors and a political consultant, Art Art Hackney. The group maintained that the tax credits would never completely compensate for the reserves tax payments and that $800 million collected from the tax incentive would actually serves as a disincentive making it too expensive to create the pipeline. In September of 2006 they promised a media blitz opposing the initiative and released television ads with the tag line "Kill the Reserves Tax."
Eric Croft and Harry Crawford proceeded to file a complaint against the organization, saying that Alaska First was influencing the election and should be required to disclose it's donors. Brooke Miles of the APOC said that until those ads Alaska's Future ran ads within a category considered "issue communications" or which are exempt from issuing expenditures and income sources. In response, Alaska's Future issued a "Statement of Independent Expenditures" which showed they'd spend $33,853.26 on the ads with the "kill" suggestion.
Croft and Crawford continued maintained that Alaska's Future was a front for the 'Big 3' oil companies, while Langland said the group totaled at over 400 members. The Associated Press obtained numerous documents including letters, emails and payment invoices that pointed the originators of Alaska's Future were BP, Exxon and ConocoPhillips.
In January 2006, George Culpepper Jr., who was the founding director and president resigned because "his salary wasn't being paid" according to an article in the Anchorage Daily News. He also issued a statement saying, "There is no membership list. It was a front to hide the support of the Big Three."
Subsequently, Hackney formed a PAC called Alaska First, who's group sole intention was to defeat the Gasline Now! Initiative.
Just short of $1.7 million was spent, pro and con, on the campaign, nearly all of it ($1.69 million) by opponents.
- Project Vote Smart Alaska Ballot Measures
- AK Gasline Now! Case for Support
- AK Gasline Now! Statement of Opposition
- Case Study of Gasoline Initiative
- Anchorage Daily News "Official: Tax-exempt group got start as a front for 3 oil giants"
- AP "APOC to hear reserves tax dispute"
- Alaska 2006 election results
- Full text of the Gasoline Now! initiative
- Campaign expenditures on Alaska Ballot Measure 2, 2006