Some people won’t like this column. In fact, some of you may be inclined to break out the torches and pitchforks. Before you do that, however, you could at least consider what I am going to say.

     It is wonderful that BP has decided to shut down the Prudhoe Bay oil field. It is some of the best news I have had all year. This is not some weird reverse psychology ploy. I think that the direct and remote consequences of that decision by BP, overall, will be positive.

     Sure, there will be some negative consequences from the shutdown. There is nothing that humans can do which will be all positive or all negative. I wrote about that issue in my column of August 19, 2005. You have already heard a lot about some of the alleged negative consequences. Some of them are even real. But consider some of the many positive aspects of this decision.

     First, it slows down the rate at which Alaska is squandering its non-renewable oil resources. The United States passed its peak oil production date quite a few years ago. So did Alaska. Yet we have been pumping this finite and dwindling resource out of the ground as fast as we possibly can. We have even been giving tax breaks to the oil companies to encourage them to pump it out faster. This is madness.

     The slower we pump out our oil, the longer it will last. Our oil is also likely to be a lot more valuable in the future when the supply of oil is lower and the demand is likely to higher. If we did not keep electing a bunch of greed heads to run the state, we could ensure the financial stability of Alaska for years to come by slowing down the rate at which we pump the oil. This oil is a part of Alaska’s real permanent fund, and for years it has been gutted by professionals.

     The shutdown is a strong incentive for the Alaska legislature to finally implement a rational royalty and tax system on oil. A reduced supply of money and a bunch of pissed off constituents is always a powerful combination of motivations. At current oil prices, and with a rational taxing policy, we can easily pay for essential state services on the revenues from the remaining portion of Alaska’s oil flow, and can continue to do so indefinitely. The oil from our other fields will still continue to be pumped to Valdez.

     Yes, I saw the predictions that the state would go into the red after two months. Those predictions are based upon the fact that our royalty and taxing policies have been a giveaway to the oil companies, and because the legislature has been spending the windfall oil revenues this year like a bunch of drunken sailors on shore leave. Sorry, I need to retract that last comment. It was an insult to drunken sailors everywhere, and I apologize to them.

     With prudent management, the remaining oil production will be more than adequate to sustain the state. Alaska also has a lot of rainy day money set aside. The functioning of the Alaska government is not threatened. And the oil is still there in the ground, where our children’s children might be able to benefit from it. That is a very good thing.

     The greed heads are already screaming because they won’t be able to squander even more public money on boondoggles, misplaced priorities and pet projects. They are making more noise than a bunch of junkies whose access to their children’s trust fund has been cut off. I think that is a good thing.

     There are going to be a lot of jobs created to fix Prudhoe Bay. It will be like a mini-gas pipeline. That is a good thing.

     The shutdown also helps protect the environment. Yes, I know that Prudhoe Bay is already contaminated from many oil leaks. Even so, environmentalists have been demanding for years that the corrosion problems be addressed. Now they will be addressed. Good thing.

     That is not the only environmental benefit. The shutdown is already causing a spike in world prices for crude oil. This will contribute to reduced consumption of crude oil, and increased demand for fuel efficient and alternative fuel technologies. That was already going to happen because of the peak oil problem, but this will help speed the process up. Good thing.

     The shutdown is already leading to calls for investigations into what happened. Many people believe that the shutdown was timed to influence the special session of the legislature. I do not have any inside information on whether that belief is accurate, but a lot of people are very leery and suspect the worst of BP. I say investigations into the environmental and safety programs on the North Slope are a good thing.

     So, the net result is that the greed heads will have less to squander now, and there will be strong incentives for rational reform of our royalty and tax policies. If we act prudently, there will still plenty of oil revenues to meet our actual needs. There will be more oil left in the ground for use in the future when it will be more valuable. The environment will benefit, as will alternative energy technologies. And there will be additional support for investigations into BP. Those are all good things.

     So, if you are still inclined to break out the torches and pitchforks, I suppose I can’t stop you. At least I was never under the illusion that trying to tell the truth would make me popular.

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