OPINION: Working with oil and gas industry vital to borough's future

August 2nd 6:01 pm | George Ahmaogak    

Changes keep coming to the North Slope and it feels like the change is accelerating.

I am very sad to see the Arctic Sounder close up shop. The people of the North Slope are going to lose a good source of local information and news they relied on for many years. The Arctic Sounder was one thing that helped our "quality of life."

I have new things that make my life better, like my Facebook friends across the North Slope and being able to access blogs and newspapers all over the world through my computer right from my house, but it is hard to give up an old friend that, especially in the last year, became a top-notch newspaper.

I want to take advantage of reaching all of you one last time through the Arctic Sounder to let you know what I think is going to be critical for us to survive and maintain a reasonable quality of life in the coming years.

For those of you who don't know me, I am George Ahmaogak, Sr. I am an Inupiaq leader and a whaling captain.

I am candidate for Mayor of the North Slope Borough in this coming election on Oct. 4. I've held the job of mayor of the North Slope Borough five terms over the past 25 years. Before that, I worked alongside of Eben Hopson, Sr. helping establish the North Slope Borough. I was the tax assessor for the Hopson Administration.

Those of us who live or have moved to the North Slope are used to change and we've been smart enough to adapt and use many of the changes to our advantage. We've adapted because we've followed a vision that I've personally carried with me my whole life - we honor the past, we are unified in the present, and that makes us strong in the future!

This is the vision that is desperately needed for the North Slope Borough right now.

This vision has several key components:

Our future depends on the true and tried values that have served us thousands of years. This is Our Tradition and Our Way of Life.

Our future depends on the guidance of Our Elders and the energy and hope of Our Youth.

Our future is the people, the communities and companies working together to bring economic growth and jobs.

In practical terms, our future is continuing good borough infrastructure and jobs in our community - sustained by stable and responsible oil and gas development.

In Alaska, municipal government is the basic form of local government and enjoys broad powers guaranteed by the Alaska state Constitution. The people of the North Slope eagerly embraced these powers and formed the North Slope Borough on July 2, 1972.

Probably the most obvious power that generates income for the borough government is that a unified home-rule borough can levy a property tax. The Borough has made it a practice to levy property tax at less than the 20 mill (equal to 0.2 percent of the value of the property) limit provided for by statute.

The rate has been a steady 1.850 for the past four years and the State of Alaska can levy the remaining .150 mills and always does. From 2007 through 2010, the tax support of Borough budgets shifted from debt service to operations - this signifies that there is a need to support increased cost of borough services.

On the North Slope, the Borough derives its main source of income from the large and high-value taxable property that is primarily owned by the oil and gas industry and the support industry. In this way, the oil and gas industry pays a very small part of its income in exchange for maintaining its basic infrastructure on Our Land. The beneficiaries of the income are the people of the North Slope Borough.

But this income from taxing the oil and gas industry also changes. What is notable over the last 10 years is the significant investment by companies other than BP and ConocoPhillips on the North Slope.

Between 2001 and 2010, the assessed value of oil and gas property increased by almost $6 billion. The assessed value of oil and gas property was $10.2 billion in FY2001 and it was $16.1 billion in FY2010.

The large part of the increase in value came from the fact that the Alyeska pipeline's value increased by $500 million. Increases in value came from the investment of companies we know as large investors for many years on the North Slope - BP and ConocoPhillips investment ($250 million).

However, the largest increase came from the combined investment of $530 million by Pioneer Natural Resources Alaska, Nabors Alaska Drilling, CH2MHill, and Schlumberger.

If we want to see continued steady borough revenues in the future we need to make sure that we have investment from large companies, as well as support-industry companies and energy companies new to the North Slope.

One of the most important jobs for the mayor of the North Slope Borough will be to interact credibly with the changing oil and gas industry. The North Slope Borough needs a competent leader and a person who understands the complex relationship between the North Slope Borough and the oil and gas industry.

My interaction with the oil industry goes way back. I was the first municipal assessor for the North Slope Borough. Thirty years ago, I was the guy who typed up the first borough tax bill and sent it to the oil companies. I was also the guy who opened up the mail the oil companies sent back. Can you imagine opening up an envelope to discover the first check to the Borough for $3 million?!

It was a good lesson for me. I realized that we have something that oil and gas companies, the state of Alaska and the people of the United States value. They will pay for the right to use Our Land.

Over the years, we've received many checks from the oil and gas industry and you have delivered billions of barrels of oils to Americans in the Lower 48.

On a broad set of issues the people of the North Slope Borough and the interests of the oil and gas industry are aligned. It definitely doesn't have to be "us versus them."

We don't always agree on everything - and we don't have to. Over the years, I have also seen that when we do disagree, we have always figured out a way to move productively forward.

Why? Because I understand the industry, I worked in the industry a few years ago, and I can credibly explain to them where we are coming from and they will listen to me. At the core, if we work competently and smart, remembering our traditions, we can agree to a relationship that benefits us all and can continue to benefit us for years to come.

For the most part, I am very proud of the track record of how this borough income has been managed. We've built the basic infrastructure that all of the residents of the North Slope Borough enjoy - including schools, homes for elders, clean water, safe sewage, public housing, search and rescue, public health, public safety and many, many basic services taken for granted in the rest of the United States.

However, we have significant challenges ahead.

Since 2006, we have hired more than 150 more employees to provide government services, 28 people in Health and Social Services alone. This is as it should be, but we need to be assured that we have the budget to support these employees.

The net assets of the borough have increased from $1.399 billion in 2005 to $1.586 billion in 2010. The fact that it has increased means the borough has continued to invest its resources in plant, equipment, and infrastructure. This is positive and we need to guarantee that we can continue to support this level of investment and finance an adequate capital program for years to come.

We need to pay attention to risk management for the borough and also "unfunded liabilities" - things that we are responsible to see provided such as landfill closure and post closure costs (Barrow, villages, and Service Area Ten in Deadhorse) and skyrocketing energy cost in villages.

We need to continue to be responsible borrowers and maintain our good borough credit rating (now AA-), so that we can continue to make large necessary investments in borough infrastructure.

Finally, we have to maintain healthy communities. This means making sure we can practice our subsistence life-style, having training opportunities so we are able to work where we live, and receive necessary services.

I am always willing to take on the challenge to tackle big jobs that promote fiscal responsibility and assure long-term growth for my people. In the process, this also creates sustainable jobs for the community that allowed communities and individuals to assert local control.

I know that nobody can determine our future for us - we need to determine our own future. This is why I believe in strong local control of our destiny and I also understand that local control means responsibility. The people of the North Slope Borough can't take a risk on leadership in these uncertain times, and, personally, it is what compels me to run for mayor again.

Without the Arctic Sounder, this year's NSB Mayors election will be different from those in the past. In some ways it will be that much harder for the candidates to reach the 4,000 voters of the North Slope who are spread out over an area the size of the State of Minnesota.

But I will try to reach each and every one of you, either in-person or using technology, to find out your concerns so that together we can to look to our past unify in the present, and tackle the future.

You can call or text me (575-8924) or email me (george.ahmaogaksr@gci.net) or catch me on Facebook.

- George Ahmaogak is a former mayor of the North Slope Borough and is currently running again for the position.