Under SB21 and existing law, our economy is suffering, our unemployment rate is the highest of any state, our essential services (such as education, health care, universities, senior services, the marine highway, rural power cost equalization, and public safety) are being cut, our local property and sales taxes are being increased, our capital budgets (that support Alaskan jobs and infrastructure) have been all but eliminated, our state’s credit ratings have been downgraded, our permanent fund dividends are being cut, and the permanent fund itself is at increasing risk.

Oil on state lands belongs to all Alaskans. Our Constitution requires Alaskans get the “maximum benefit” from the sale of our oil. Today, Alaskans are not getting a fair share of the oil revenues and, in fact, are getting a smaller share from our largest and most profitable legacy fields than ever before. The Fair Share Act is a bill proposed by Alaskans through initiative to amend existing law to restore Alaskans’ fair share from the sale of our oil from those legacy fields.

One-third of the gross revenues from the sale of our oil is a good standard to apply in determining if Alaskans are getting their fair share. Governor Hammond was a key architect of our economic relationship with the oil industry. He stated the original agreement was one-third to the state, one-third to the federal government, and one-third to the producers.

Historically, we have gotten 27 percent of the gross revenues from the sale of our oil. In 2004, when we were getting roughly 27 percent, Governor Hammond said Alaskans were being “shortchanged hundreds of millions of dollars” compared with the one-third “once agreed to be our ‘fair share.’” Before SB21 was passed, when the “ACES” tax was in place, Alaska received about 35 percent of the gross revenues.

Currently, Alaskans are getting less than 20 percent of the gross revenues from the sale of our oil, and the producers are getting almost 50 percent. 

Since SB21, Big Oil has paid $2.0 billion in production taxes and we have paid and owe them $2.1 billion in cashable credits.  You want to count what they pay us without counting what we have paid and owe to them.  As we speak, we still owe $770 million in cashable credits and are actually trying to borrow $800 million to pay what we still owe.  Imagine–we are borrowing money to pay them to take our oil!!

Even without the cashable credits considered, we got $21 billion in production taxes the five years before SB21 or $4.2 billion per year, and only $2 billion the five years after SB21 or $0.4 billion per year!  This is why we have a State deficit, PFDs are being cut, and we haven’t had a capital budget worth mentioning since SB21 passed.  We are getting ripped off big time.

And, before you even start–the average price of oil only went down 35% and it was before the pandemic.