When Hilcorp threatened to leave Alaska if our legislature decides that they should pay corporate taxes, something that is standard for major oil companies in the state, they didn’t realize how many Alaskans were ready to call their bluff.
This threat isn’t surprising–bullying Alaskans works for oil companies. That’s how we ended up with Senate Bill 21, which has cost Alaska countless millions in revenue, and how we found ourselves owing oil companies millions of dollars in credits not too long ago.
Hilcorp believes they have the upper hand, because we, the Alaskan people, won’t stand up for ourselves. As a state, we are in a dire situation, but we’ll continue driving ourselves right off this financial cliff, tightening our budget while ensuring Hilcorp has all the comforts they need.
Personally, I don’t like bullies. When someone is a bully it usually means that they have an insecurity they are trying to hide. In Hilcorp’s case, they’re concealing their finances and hoping you won’t think hard about their known history of violations.
Unlike Hilcorp, companies that have a healthy safety work culture welcome regulatory oversight and improvement. Earlier this month the Alaska Oil and Gas Conservation Commission (AOGCC) fined Hilcorp $267,500 for violating approved drilling process requirements and failing to notify AOGCC. In AOGCC’s order, they state that Hilcorp has shown a “track record of regulatory non-compliance” and that they have issued “more than 60 enforcement actions against Hilcorp.”
The thing is, Hilcorp has only operated in Alaska since 2012 – that is a hell of a lot of AOGCC violations to rack up in only 11 years. This is on top of nearly 50 counts of EPA violations last year with fines totalling $180,000 for seriously delaying inspections and repairs of leaks throughout the Cook Inlet and on the North Slope.
None of this is surprising if you are familiar with Hilcorp’s business model of buying old fossil fuel infrastructure and driving it into the ground while refusing to invest in basic maintenance and worker safety.
Despite public outcry in 2019 during the BP-Hilcorp deal, Hilcorp has successfully avoided sharing any of their basic financials, a practice required of all other major oil players in the state. We know, however, that their bond rating was downgraded during the purchase of BP’s assets, which signals that they’ve taken on significant debt to finance the purchase.
It can be scary to confront a bully, but all it takes is some self-respect. We every-day Alaskans can join the City of Valdez who is standing up for our home by facing Hilcorp at the Alaska Supreme Court on June 27 at 1:30 p.m. Valdez is requesting basic transparency to find out if Hilcorp has the financial resources necessary for assets acquired from the BP-Hilcorp sale–the largest oil deal of our generation. Alaskans can show up to that hearing in-person and face the oil industry head-on too. We deserve to know if Hilcorp (aka SpillCorp) has enough money to clean up spills, not if, but when they happen.
Our legislators have a choice: They can either stand to defend their state against bullies and pass Senate Bill 114 next year or roll over and continue to make one special accommodation after another at our expense. SB 114 confronts existing deficiencies with Alaska’s oil tax laws through three significant reforms and would potentially generate over $1.3 billion in increased revenue for the state in 2024 alone.
Voting on SB 114 will likely happen next year, with potential for more discussion during Dunleavy’s prospective October special session to make a long-term state spending and revenue plan.
Arleigh Hitchcock (they/them) lives on Lower Tanana Dene lands and works as the Keep It iN the Ground (KING!) Organizer for Fairbanks Climate Action Coalition (FCAC).
This post is a submission to The Alaska Current. Please send submissions to news@thealaskacurrent.com.