Speech and lyrics as provided

Thank you for the kind introduction. And my sincere thanks to Jason Brune and all of the team at the Resource Development Council for giving me the opportunity to make a few remarks today.

It is a tremendous honor to share the platform with one of Alaska’s champions, a man who stands up for small businesses, jobs, communities, and families, Governor Sean Parnell. Thank you, Governor, for your courage, your convictions, and above all, your leadership. Every one of us is with you on this one.

There are many of us here today who remember what Alaska was like before Big Oil. The individual state income tax, the School Tax, remember those? State government was much much smaller back then: there wasn’t any money for it to be anything else. And then came the pipeline, and the floodgates were flung open.

It transformed our entire economy. Alaska became a very different place, but a place that was vastly improved because of the opportunities created by North Slope oil. It gave us schools, clinics, roads and bridges, and State programs that could never have been contemplated before. It gave thousands of young people high-paying jobs that allowed them to make a good living, put down roots, and raise families here. And oil created the Permanent Fund. No other state in the history of the Union ever had a single resource based rainy-day account like this one. It is the envy of every legislator in the rest of the nation.

But the entire game was always based on the premis that the pipeline would keep moving oil as long as there was oil to move. To do that we needed to have producers willing to take on the immense private risk and expense of drilling for additional supplies. Without them there would be less and less throughput, until the last remaining trickle in TAPS would simply freeze up, rendering it operationally useless.

So it had to really be worth the producers’ while to do this risky business, especially in a global market where there were many opportunities to drill. Since 1978 there have become a myriad of new places to drill, and more than ever in the last decade. Alaska never had a corner on the market. And today’s international oil production business has become intensely competitive, a winner-take-all rumble, where every region is judged on the cost of doing business, and what that cost does to the bottom line. Anything that creates a disincentive for exploration or production is taken into account. “If I can make more money somewhere else, that’s where I’ll put my rig.”

The enactment of Alaska’s Clear and Equitable Share (ACES) legislation in 2007 placed a huge tax increase on the oil industry, and with rising prices, the accelerating progressivity and windfall tax in ACES literally slammed on the brakes, and began to slow further oil company investment in exploration or production. We’re down to a crawl now: there’ll be maintenance on infrastructure this year, but little else.

Without additional production to keep it operational, the pipeline may have to be shut down in as soon as five years. Without the pipeline, the State revenue stream dries up as well. When that happens, the “end of times” will have arrived for Alaska: the formerly sacred Permanent Fund will have to be opened up to begin paying for our state government and services, reducing it more every year. To keep operating, government will strike out to grab whatever revenues they can justify taking from the industries and citizens that remain. The state will be forced to resort to personal income taxes, school taxes, and a raft of other taxes and fees that “we the people” can only dream of. Look out across the chaos in the statehouses in the rest of the country, and you have a glimpse of the catastrophe that we face going down this trail.

Our legislators MUST see this, right? Our Governor sees it: Governor Parnell has proposed HB110, which lowers the progressivity and the windfall taxes. This will make exploration and production of Alaska oil competitive and financially attractive again.

Our elected State Representatives and Senators are honorable people. We respect them for their office and their service. We know that they each in their own way want to do what’s “right for Alaska”. They’re in session down in Juneau right now: surely they understand the urgency of this situation…!?

Unfortunately, some of them don’t. There are legislators who don’t believe that oil companies will invest more if the tax structure changes. There are legislators who simply “don’t trust” the oil companies. There are legislators who believe that the tax structure should “change” – but they’re not sure that HB 110 is the way to do it. And every day gets closer to the end of the Session, and every day there is less oil moving through the pipeline.

To all of them we cry out from this room, “Honorable Ladies and Gentlemen of the Alaska State Legislature! No matter what else you believe, you KNOW this to be true! We MUST keep oil flowing through the pipeline if it is humanly possible to do so!”

This is not about politics, or ideologies. It’s not about that “someone thinks someone else is making too much money”. It’s not about being “fair”. It’s come down to being about survival.

This is about the health of the long term state economy: people, jobs, families, and communities. It is not about money for state coffers in the short term. Amending ACES will grow the economy, not necessarily the state’s saving account, at least not right away. But without production, the state gets no royalties. Ziltch. Nada. As Resource Development Council President Tom Maloney has sagely opined, “We must take a leap of faith – now - to make Alaska a compelling place for industry to invest.” It’s from that investment that real growth will occur: growth in the private sector economy.

And again, from Tom Maloney: “A strong private sector will do more over the long term to sustain Alaska than a fat state savings account, which will never replace the oil industry. The best way to grow the economy is to grow the pie, not to have government cutting itself a bigger piece of a shrinking pie. More drilling will equal more jobs and production, which in turn will extend the life of TAPS and yield additional tax and royalty revenues to the state.” There it is! What a concept! See it? It’s simple! It makes you want to climb up on the roof and yell, “HEY! Check this out! Here’s the ANSWER! And it’s easy. Tell everybody! Where’s the ADN? The Empire? The News-Miner? Take this down, guys!”

Individuals CAN make a difference. Alaska is a very small town. Our government in this state is made up of our neighbors. They will listen to your opinion, to your reasoned argument, to solid information. And we all know government responds to popular political pressure. Some even want to be re-elected.

So…write a personal letter or email to your legislator. Write to the Co-Chairman of the House Finance Committee, and let them hear your position and concerns. Talk to your neighbors, co-workers, your local city and borough officials. Stand up and speak at Citizen’s Present at your next City Assembly Meeting, and give them your opinion. Ask them to write a letter or pass a Resolution, and have them send it to Juneau: the municipalities will be hit hard when there is no more state oil money to share. Call in to a radio talk show (RDC’s Executive Director Jason Brune is going to be hosting one today: he’s cool: get your feet wet, and call him!). Write a letter to the editor of your newspaper, and hound them until they publish it (they will, just to get rid of you). Put a bumper sticker on your car (make it yourself!). Put up a yard sign out in the snow! Start a blog. Answer back on someone else’s blog! Go start an argument with your mother-in-law!

Look at all of us! Look around you, and see the strength, the commitment, of Alaskans. And we are Alaskan VOTERS – we represent tens of thousands of other voters who could not be here today, but who are each and every one concerned about their jobs, their familes, and the future of their home here. We are their voice. We have to pick up this banner. We will carry this message up the Hill to the capitol building, and take it to every elected member of our government.

Here’s how to start, right here, right now, today: once more, there are cards at every seat in the room. Pick up a card, fill it out, and we’ll make sure that every single legislator down in Juneau gets a copy of your card. Then, it’s your job to follow it up with any and all of the tactics described (and anything else you can come up with!).

This is OUR moment! Right now. We can change this situation. We CAN do this. We are free to make the change happen.

And if we could fly up out of this building, soaring up, gazing out across the thousands of miles of this amazing blessed Great Land, what would we see?

I wrote the chorus of this ditty 33 years ago back when I was playing down in the Red Dog Saloon in Juneau, and scribbled the verses on the way up here to Anchorage on the plane to fit today’s circumstances. All done tongue-in-cheek, of course…

(The ‘Chorus’ is sung to the tune of “Dark As A Dungeon Way Down in the Mine”)

(Chorus)
There’s mountains of copper and eons of coal
There’s fishing, and tourists, and gas, and oil
Where the forests rise from the sea to the sky
Alaska’s a country where freedom’s the cry…

(The 1st Verse is sung to the tune of “The Strip Poker Massacre” by the Red Clay Ramblers)

(Verse 1)
They say that the pipeline might soon run dry
But they want pro-gress-ivity, always more of the pie
So while they argue in Juneau, and won’t pass the Bill
The rigs are all drillin’ for oil off Brazil!

(Sung to Chorus tune)
Let’s get things a movin’, there’s work to be done
There’s new jobs to be created, and new business to run
None of it is created by the folks on the Hill
But if you pass H-B-110, then the pipeline would fill!

(Repeat Chorus)
There’s mountains of copper, and eons of coal
There’s fishing, and tourists, lots of gas - and oil
Where the forests rise from the sea to the sky
Alaska’s a country where freedom’s the cry;

You wanna fire up the economy? Let’s give this a try!

THANK YOU FOR THE OPPORTUNITY TO SPEAK TO THIS WONDERFUL GROUP: GOD BLESS ALASKA, AND THE UNITED STATES!

Steve Hites
P.O. Box 400
Skagway, Alaska 99840