It’s been 6 years since Sarah Palin coined the phrase “Drill Baby Drill.” She has said often, and loudly, that she is a conservative, and in favor of less regulation and lower taxes. However the ACES program, for which she takes credit, did exactly the opposite. ACES had the effect of raising taxes on oil companies in Alaska. It had the effect of discouraging production or the drilling of new wells. Oil and Gas companies preferred to explore in other states that did not impose such high taxes on their production.
Here are the facts:
1. During the 2008 campaign, McCain claimed that Sarah Palin knew more about energy production than any other American.
2. During the 2008 campaign, Sarah Palin became famous for the motto: “Drill Baby Drill.”
3. Sarah Palin took credit during her short term as Alaska’s Governor for the ACES program of taxation on the oil & gas companies drilling in Alaska. ACES had the effect of causing a decline in both production and development because of the high taxes that would have to be paid to the state of Alaska.
4. Palin now reports that:
“ From 2007 to 2012, employment in the energy industry rose a dramatic 31.6 percent while employment nationwide fell 2.7 percent. U.S. oil production increased from 6.5 million barrels per day in 2012 to 7.4 million barrels per day in 2013, and in December, the Eagle Ford Shale in South Texas produced its billionth barrel of oil. Thanks to American energy entrepreneurs’ drive and innovation, we’ve surpassed Russia and Saudi Arabia to become the world’s largest oil and gas producer. This truly is a great American success story, and it’s a proud moment for those of us determined to educate D.C. bureaucrats on the link between energy and our security and prosperity.”
“Apparently, the president is pretty proud, too. In his State of the Union address last month, he boasted about the surge in oil and gas drilling, saying, “We are as free from the grip of foreign oil as we’ve been in almost 30 years.” From the way he’s talking, you’d think he coined the phrase “drill, baby, drill.” But it was just three years ago while campaigning in Miami that he lectured, “We can’t just drill our way to lower gas prices.” Respectfully, Mr. President, “yes we can.” And yes we did. Average gas prices were well over $3 in 2012, but in the first months of 2015, they’re near $2, with some states enjoying even lower prices.”
5. It is true that America is enjoying an 8 year high in domestic oil production. U.S. Oil Imports and Exports , the independent and bipartisan Congressional Research Service (CRS) notes that since 2005, U.S. domestic production of oil has increased by 24%. Over the same period, Americans’ petroleum consumption actually decreased by 9%, falling to 18.8 million barrels per day. From 2005 to 2011, net U.S. oil imports fell by 33% and now account for 45% of the nation’s total oil consumption, down from 60% in 2005. The trend began under the Bush Administration. Domestic oil production increased at a similar rate during 2004 to 2008, the last four years of the George W. Bush administration. In other words, the increase in domestic oil production under President Obama is, in reality, a continuation of a trend which began under President Bush .
In addition, the President of the United States – any President of the United States – can only control oil and gas exploration and production on lands and offshore areas owned and controlled by the federal government. According to U.S. Oil Imports and Exports , 96% of the increase in domestic oil production since 2007 has taken place on privately owned, nonfederal lands, thus making it oil and gas production in which Presidents Obama and Bush had little or no role. Thus it is the private sector and the allure of greater profits that has inspired production.
6. While the United States has enjoyed a huge increase in oil and gas production over the last 8 years, Alaska has declined in its production during the same period. Oil production in Alaska is now lower than it was on the day in 1977 when the first oil flowed through the pipeline. Alaska has lost more than 200,000 barrels of oil/day under the flawed ACES tax regime, and the pipeline is operating at dangerously low levels. Since ACES passed in 2007, North Slope production has fallen almost 31 percent. In contrast, New Mexico production increased 38 percent during the same period, Oklahoma 35 percent, Utah 46 percent and Texas a whopping 70 percent. Alaska was the only North American oil province to suffer declining production in 2011-2012 and now ranks behind Texas, North Dakota, California and Alberta in daily production.
7. Sarah Palin endorsed and campaigned for Bill Walker in the recent Governor’s race. A pivotal issue in the race was Walker’s support of the ACES program. He opposed the conservative approach advocated by Sean Parnell which was designed to give more incentive to oil companies through tax breaks. Walker defeated Parnell and in the short time he has served as Governor, he has already been identified by Oil and Gas companies as the opposition. “Most notably, Walker raised strong objections to a newly enacted tax structure on oil production that was intended to encourage investment in the state. It was an abrupt – and alarming – shift on his part, as he pledged during his campaign last year that he would not undo the tax law that Alaskan voters upheld in a referendum this past summer.”
Walker has reneged on other campaign promises. He filed a private lawsuit against a deal the state reached with ExxonMobil that paved the way for construction of a natural gas facility at Point Thomson on the North Slope. Walker pledged to drop that suit if elected. Now that he is governor, Walker has not only refused to drop the suit, but has put his lieutenant governor in charge of overseeing the suit.
The damage inflicted upon Alaska by Sarah Palin while Governor, continues. By creating ACES and campaigning for Walker, Sarah Palin did, and continues to, promote the decline of oil production, and revenue therefrom, in Alaska. Concurrently, Palin takes credit for the increase in production nationally, even though she quit her only elected office, because she advocated “Drill Baby Drill” during the 2008 campaign.
Anyone who believes anything Sarah Palin says should be required to wear a warning sign.