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Stedman talks oil tax, sea otters

Bert Stedman was one of a handful of Alaska senators who voted no on the governor’s oil tax reform bill, and he remains convinced that it won’t make a difference to the amount of oil flowing through the pipeline.

“They weren’t watching the cash cow. They were over in economic dreamland looking at what’s potentially going to be produced in outlying areas,” Stedman says. “That’s not where the oil is and that’s not where the money’s at.”

He had some good things to say about the bill: it offers acceptable incentives for new exploration, for example, but Stedman says it gives too much away for oil that already is, and has been, in production.

“A good example, go back to 2012. If all that production in 2012 was already economic, pushing more money across the table and making it more economic doesn’t fix the areas that aren’t economic. You’ve got to fix the uneconomic areas,” Stedman says.

He estimates the reduction in state revenue at $1.4 billion in the first year, and about $1 billion in the second.

Those who support the measure say that the state will see an increase in production and revenue later, after the new tax structure has given oil companies a reason to invest. But Stedman says that’s just expensive speculation.

“You can’t hemorrhage a billion to a billion and a half a year for ten years hoping that somebody is going to produce more oil than they otherwise would do,” says Stedman. “It’ll be interesting to see what happens.”

Some of those “interesting” developments will be state spending cuts, and Stedman predicts they will primarily affect rural Alaska.

“There’s more elected representation out of the Railbelt than rural Alaska. They’ll circle their wagons and protect their own communities,” says Stedman. “It’s going to be difficult in rural Alaska. We’re going to be hit first and hit hardest. Eventually it will roll into the Anchorage area.”

Stedman says Southeast Alaska already saw negative effects in this year’s capital budget. He says that for all of his Senate District Q, Gov. Sean Parnell’s capital budget was fair, but then many projects important to smaller communities were cut by the Senate.

He says he understands the need to cut spending when revenue is down.

(0:25) If we have tight fiscal times, everybody gets their belts sucked up and that’s just the way it is and it’s fair. But you don’t loot the treasury for hundreds of millions of dollars and leave vast tracts of Alaska out of the discussion. That was one of the impetuses that formalized the creation of the Coastal Caucus within the Senate.

The Coastal Caucus formed in the latter part of the session. Stedman says it made a difference; Interior legislators responded , showing more interest in talking with members of the group. The Coastal Caucus will continue meeting, and Stedman says they will have more influence next session.

(0:23) It’s a challenge in an environment we have in Juneau, particularly in the Senate now, that’s sole focus is on the Railbelt. We need to broaden their horizons to move forward together. Then you’ll see Southeast moving a little quicker. We might be stuck in the tar pit for another year.

Stedman introduced two measures that will come back next year. One is a resolution calling for the state to request a Tongass land transfer from the federal government. Stedman says such a transfer would improve development opportunities in Southeast Alaska. Another bill that received a lot of media attention was Stedman’s call for a bounty on sea otters.

“I represent most of the sea otters, as the senator for most of Southeast. They’re cute little cuddly guys,” says Stedman.  “But their impact, when you just let them overpopulate, on the human side of the equation, is substantial.”

The bill initially proposed a $100 bounty for each legally harvested otter. Only Alaska Natives are allowed to hunt sea otters, according to the federal Marine Mammal Protection Act. The original language of Stedman’s bill likely could not have been enforced because of federal law. Stedman says he will work on the language before the next session.

“It’ll probably move away from a $100 bounty and head more in the direction of some sort of an incentive. It could be through help at the tanneries, it could be through marketing. We want to follow the federal law,” Stedman says.  “Nobody is advocating a lawless frontier. But I think the federal government needs to be cognizant of the people who live here. We’re not just tenants of a park.”

The sea otter population in Southeast Alaska has skyrocketed in recent years. Otters eat shellfish, and many commercial and subsistence fishermen say the large otter population has harmed the fisheries.

Looking forward to the next session, Stedman says he expects the Coastal Caucus will work together on issues of mutual concern. Those include improvements to the Alaska Marine Highway, such as new ferries; new Southeast energy projects; and maintaining fisheries.

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