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Text of Gov. Sean Parnell's address

Published on NewsOK Modified: January 16, 2013 at 10:28 pm •  Published: January 16, 2013

By eliminating progressivity, and rebalancing capital tax credit payments, we can create a simpler 25 percent tax. Gone will be the old arguments about what qualifies for the capital expenditure credits. Gone will be the need to calculate progressivity each month.

What will remain will be a more balanced, more competitive, and more predictable tax system, one with greater protections for Alaskans at lower oil prices, in exchange for lower taxes at higher oil prices.

As we debate these reforms, my administration will be open to new ideas, but not old delays. We will judge any proposal based on four questions:

— Are the changes fair to Alaskans?

— Will they foster new oil production?

— Will they simplify and restore balance to our fiscal system?

— And, will the changes make us competitive not only for this year but for years ahead?

If you pass legislation that answers these four questions, you won't have to ask for my answer, because you will get my signature.

Members of the Legislature: This problem has been studied long enough. It is time for action - right here, right now.


To keep the state of our state strong, let us choose a future that gets our gas to Alaskans first, and then to markets beyond.

In recent years, we have pursued two gasline efforts on parallel paths. Tonight, I can report that both projects have made progress.

On one path, the Alaska Gasline Development Corporation - better known as AGDC - has pursued a small diameter line. The project has cleared major regulatory hurdles by obtaining a State right of way and completing an environmental impact study - all key steps forward.

As AGDC has moved beyond these regulatory hurdles, it has also moved toward a larger diameter pipe. By switching to a larger pipe concept, AGDC has provided a simple answer to a complex question about how to lower the cost of getting Alaska's gas to Alaskans: Get more gas in the pipe.

On the other parallel path, the Alaska Pipeline Project moves forward with backers including BP, ConocoPhillips, ExxonMobil, and TC-Alaska.

Last year, I stood before you and set benchmarks for gasline progress. Tonight, I can report those benchmarks were met. For the first time, development of Alaska's eastern North Slope is under way. Hydrocarbons will come from Point Thomson by 2016.

It's hard to overstate the significance of our administration taking the Point Thomson case to the Alaska Supreme Court, and resolving that litigation.

It means billions in new investments. It means 600 to 700 new sustained jobs, and it means progress toward a gasline project, because Point Thomson's facilities and infrastructure will be able to produce gas.

For the first time, Alaska has three major producers aligned and working together, with a pipeline company, on an Alaska gasline.

Members of my administration and I have undertaken an aggressive advocacy campaign throughout Asia, where liquefied natural gas demand is expected to soar in the coming years. Our goal was to put Alaska on the map as a liquefied natural gas supplier - and that is exactly what we have done.

We recently welcomed a South Korea delegation representing the largest LNG purchaser in the world. We also held discussions with a consortium of Japanese companies.

There is no doubt we have come a long way toward a gasline, but we still have a long way to go. Here's the roadmap I propose for AGDC:

First, we need to boost AGDC's ability to build an all-Alaska gasline, or to participate with others in building one. Representative Hawker and the Speaker have filed legislation to add horsepower to AGDC's engine.

Without sacrificing accountability, we can unite around that legislation, and accelerate AGDC's work. We can accelerate a merger between the State's two parallel paths, and help avoid redundant costs between the projects.

Together, in the committee process, we will ensure that AGDC can commercialize Alaska's gas for the maximum benefit of all Alaskans.

While AGDC needs to be stronger, the Alaska Pipeline Project needs to make a firm commitment to an all-Alaska gasline.

Tonight, I set another important benchmark for the private parties involved in the Alaska Pipeline Project: By February 15 - one month from now - they must select a concept on an all-Alaska project.

Let me be clear: That means describing and detailing the project and pipeline specifications. More specifically, it means telling us the size of the pipe and the daily volume of gas. It means telling us the location of the gas treatment plant, and detailing the number of compressor stations to move the gas along.

It means telling us the size and scope of the liquefaction plant and LNG storage tanks. It means telling us the number of off-take points to ensure that Alaskans can utilize our gas for our needs.

Most importantly, we want to ensure that APP's concept components are designed to ensure Alaska's gas goes to Alaskans first.

By this spring, I call on the companies to finalize an agreement to advance into what's known as the pre-FEED stage of a gasline - that's "pre-front-end engineering and design," for those of us who are not engineers.

They must ensure a full summer of field season work will commence this year, and once into that pre-FEED stage, the companies will be spending hundreds of millions of dollars - private sector dollars - on this project.

With concept selection made, a pre-FEED commercial agreement executed, and a summer field season completed in 2013, the project will finally move at the speed that Alaskans demand and our future requires.

To keep the state of our state strong, let us choose a future of affordable and abundant energy. Despite all our energy sources, energy costs remain a huge burden on Alaskans. That needs to change.

That's why we developed the Interior Energy Plan, a strategy that includes low-interest loans, gas storage tax credits, and cash for a moveable gas liquefaction plant and distribution system.

This plan jump-started private sector efforts for transporting natural gas in the Interior. It will slash energy costs for homes and businesses.

Tonight, I ask you to grant legislative authority to the Alaska Industrial Development and Export Authority (AIDEA) to move this Interior Energy Plan forward.

I also ask you to fully fund Power Cost Equalization, renewable energy grants, and our budget request for the Susitna-Watana Hydro project.

Taken together, these investments will keep us on the road to achieving our goal of 50 percent renewable energy. It's an important goal that we set, and it's a commitment that we intend to keep.


To keep the state of our state strong, let us choose a future of public sector restraint and private sector growth. Let us come together to set a spending cap early this session, because limited government requires firm limits. Let us come together to support hard working Alaskans and Alaska businesses.

In recent years, Uncle Sam's growing reach has cast a shadow over the dreams of Alaska's entrepreneurs. While we in this chamber cannot unilaterally fix Washington's mistakes, we can act to minimize the damage.

By reforming our unemployment tax law, we can reduce the tax burden on Alaskans and their employers. Last year, the State took an additional $20 million

in unemployment insurance contributions, even though our unemployment insurance fund was solvent without that increase.

It makes no sense for Alaskans and their businesses to be overtaxed, so government can be overfunded.

Tonight, I propose creating a formula to determine whether the unemployment insurance fund is solvent. If the fund has enough money, we will cut unemployment taxes, because it's time we cut a break for hardworking Alaskans

and Alaska businesses.

Let us also come together to stop federal overreach. When a federal agency tramples on what is our right, we will not roll over; we will not lie down. We will stand up for what is right.

We recently won a major victory when a federal court ruled that the U.S. Fish and Wildlife Service had overstepped its bounds by declaring a huge swath of our land critical habitat for polar bears, without properly following the law.

As Alaskans, we regularly experience the disconnect between federal flights of fancy and on-the-ground realities.

Well, here's the reality: Washington, D.C. just doesn't get Alaska - never has, never will.

Federal law says that states have the right to regulate activities regarding their own lands and waters - and it's about time Alaskans exercise these rights over our resources.

So tonight, I urge you to pass legislation giving our State authority to seek and assume primacy over dredge and fill operations within our borders. By assuming primacy, the people of Alaska will have a greater say over their lands and waters.

The future of Alaska belongs to Alaskans - not to Washington, D.C.


Tonight, I have outlined the challenges and priorities that will define this session. By working together, we can leave our children the future they deserve - a future of greater safety, higher achieving schools, growing oil production, more affordable energy, vibrant economic growth, and brighter opportunity.

As you debate these proposals in the legislative branch, remember that you have a partner in the executive branch. From public servants deep within our agencies to the well-known Cabinet members here with us tonight, we have State employees standing up for Alaskans, standing up against federal encroachment, and standing up for the values that make Alaska special.

Among the 50 stars on the American flag, Alaska's has always stood for a place high above the rest.

It is the star that guided our first people and early pioneers. It is the star that rises in our time, even when troubled global markets dip and fall. And it is the star that, we here tonight, vow to keep burning and bright for future generations.

That is the task before us. Let us answer history's call. Let us confront challenges that must be met. And let us work together in a spirit worthy of our fellow Alaskans.

If we stay true to our values - the values that veterans like Rod Bain defended in distant lands - then the state of our state will always be as it should be: Strong and free.

May God bless you, and may God bless Alaska. Thank you, and good night.


Source: Office of Alaska Gov. Sean Parnell