"Alaska is Unsustainable" an Interview with Robin O. Brena - TAS #9
This episode will make you mad and will open your eyes. Anchorage attorney and real estate investor Robin O. Brena is spearheading the Fair Share Act on the ballot in November to raise production taxes on Alaska's most established and profitable oil fields. He clearly lays out the flaws in Senate Bill 21 in 2013 that let oil companies obscure their profits and evade production taxes, explains why the Alaskan economy was still in recession when oil was at $70 a barrel recently (hint: we aren't getting our fair share) and how this state's dividend and essential services are flat out unsustainable if Alaskans let oil companies buy their votes this November. We also discuss his major litigation wins (fighting on behalf of AND against oil companies), his pro-business approach, and commercial real estate in Anchorage. Interview starts right away - no timestamps! Links https://voteyesforalaskasfairshare.com/ https://rsd-properties.com/ - developing coworking space in Anchorage www.TheAKShow.com Interview Notes Robin O. Brena is the founding partner of Brena, Bell and Walker law office in Anchorage. He is a commercial real estate investor, born and raised in Skagway and is one of the three sponsors of Fair Share Act. Fair Share Act: Robin has skin in the game - he’s spent $100,000+ of his own money It’s not anti-business - it supports some oil fields and not others He has a long history of fighting big oil on behalf of Alaskans and independent producers. The Fair Share Act is on the general election ballot in November. It raises the production taxes on our three largest and most profitable fields in a transparent way. One of the most important pieces is it requires the production tax returns associated with Prudhoe, Alpine, and Kuparuk to be transparent. Their production tax files will be public. That’s critical because it’s our oil on our land and we’re in partnership with these companies and have no clue what their revenues, costs, and profits are in the three major fields. It’s hard to be a proper steward of this resource when we have no access to this information. The administration and legislature doesn’t have this information. How did we get into the situation with no transparency? It was a process of political influence over years chipping away at the reporting. We used to have this information years ago and we don’t have it anymore. People are passing oil policies in Juneau and they don’t know how the fields are performing. Has it always been like this? Robin doesn’t think people understand how important it is that they stay informed and engaged. We’ve reached a point where we’re getting very little for our oil. Robin thinks one of the most important things the Fair Share Act does is allow Alaskans and the industry to sit down and determine what is fair based on knowing something. Under normal circumstances it would raise about a billion dollars a year. Even with that it will be lower than the average production tax in the past three decades. That money will help fund essential services, Permanent Fund, and PFDs, and hopefully we will get a capital budget back to do construction which we haven’t had since Senate Bill 21 passed in 2013 lowering these taxes. Alex thinks something has to give. We need money from somewhere. Governor Hammond said if you don’t have enough money to run the government here you should first look at oil and make sure we’re getting our fair share. He was right. $1 billion is a lot of money - that’s 10,000 jobs at $100k a year. We need to keep more oil revenue in Alaska to create and save jobs in Alaska. Right now it’s all leaving the state. Alaska doesn’t work if you give away your oil. All resource-rich countries deal with this problem. Alaska is doing the worst of all of them. If you look at our production tax and royalties we’re doing worse than any other resource owner in the world - less than Brazil, Nigeria, Iraq, Norway, even Iran is doing better than us. There’s an inherent tension between resource owners and producers. We’re doing the worst job of any resource owner in the world as a result of Senate Bill 21. They produce oil throughout the w2orld for $2-5 a barrel. In 2018 they made between $25-30 a barrel of oil in Alaska. There’s no way to have a fair conversation about oil in this state except for popular initiative. There are too many ways for oil to influence the legislature and the political process. You have to get it done through the initiative. SB-21 does a bad job at low, middle, and high oil prices. So nothing has changed even though oil prices have crashed. There aren’t any major resource owners taking the kind of commodity risk Alaska is. When oil goes down, our production taxes go down faster than that. In fact they go down almost twice as fast as the price of oil. So when the price of oil goes down the pie gets smaller, but Senate Bill 21 gives away that even smaller share to international producers. Why did you spearhead this initiative? SB21 went into effect in 2014, was passed in 2013. It got through the senate by 1 vote and there were two ConocoPhillips employees that voted for it. Robin doesn’t think it passed in a fair way. On appeal they spent $15 million dollars telling Alaskans if they lower production taxes the companies will invest more in jobs and production, but all they’ve done since then is lay people off and reduce production. That was BEFORE Coronavirus. We got less investment, less jobs, less production, and a whole bunch less revenue. We gave up $1.5B a year and we got less of everything they promised. Robin is a conservative businessman by nature - this is just a matter of getting fair value of what you own. If you’re going to sell your house, your car, or oil, you have to sit down and get a fair deal. He doesn’t view it as a flawed economic theory as much as poor negotiating. We’re in a partnership - the Fair Share Act isn’t even about taxes it’s about getting a fair cut of revenue. What’s Robin’s feeling on public sentiment around this act? His polling suggests people strongly support the Fair Share Act and transparency. Alaskans are tired of learning how their oil fields are performing secondhand and through partial information. People know we’re not doing well in Alaska and know that we gave SB21 a chance after they spent $30m to convince us to try it, and it’s failed miserably on every promise that was made. This is our time to revisit it and change it. What was Skagway like in the 60s and 70s when he grew up? It was a beautiful place to grow up - Robin still loves Skagway and Southeast Alaska. Their family ran the oldest bar in Alaska that started in the gold rush days. When it came time to go to college Robin worked the railroads and did every job there. Was there still a lot of gold business there? Tourism started picking up then. They had the railroad from Whitehorse to Skagway so the industry cut back and tourism picked it up and it’s a spectacular example of turn-of-the-century architecture and Klondike gold rush vibe. Tourism is how it survives now. A lot of Robin’s friends worked on the pipeline and Robin got three graduate degrees. His mother was a teacher and so was his grandmother - so he grew up in a living room full of books. Robin thought, when he went to school at 17, that he would be a teacher. But when he saw the $17,000 starting salary and his friends making six figures working on the pipeline he gave that up and followed his passion. He has an MBA, a Law Degree, and a Masters in Law in Real Estate Finance. He took a year off between his MBA and law degree because the family bar business fell on hard times and his dad had passed and mom was running the business. He took that year to put together a historic restoration of the building so his mom and sister could have income for their life. Robin’s father passed when he was 12. Soon after his brother became married and moved out, so Robin took on the responsibilities of the household. When he was 17 he started working to support the family filling vacancies at the railroad roundhouse. He was going to high school then working 3-11pm after school at the railroad yards. When he got to college he signed up for 25 academic hours. They said freshmen can’t sign up for more than 15 hours without special permission. He went to the dean and said “this is just 25 hours a week” because he’d been working 40 hours at the railroad, and night janitor at the school, and going to school during the day so he thought it was ridiculous he could only take 15 hours. Robin talked him into 18. Robin always took a lot of classes and did really well, he was in National Honors’ Society. Robin always wanted to come back to Alaska - it was home. When he finished his graduate degrees he had opportunities on the east coast to develop real estate and to teach law at Hastings Law School, but he couldn’t leave Alaska. If there was a job for him here that’s where he wanted to be. He came back and went to work at a law firm Atkinson, Conway and Gagnon. Bruce Gagnon was his mentor, one of the best attorneys he knew. After three and a half years there Robin had the opportunity to start his own firm. Two other attorneys told him to talk to them if he started a new firm, and he partnered with them in business. They’ve been in an office share or the same law firm since 1988 and there hasn’t been a raised voice in the office since then. Three and a half years is pretty quick, no? Robin says it was the right timing for him. He has 110 open cases when he left the firm he was with. He took every one of them with him with the firm’s blessing. That was the first of major cases he worked on with the Trans-Alaska Pipeline. It makes more sense to build your firm when you manage major cases so you can focus the firm resources on those cases rather than being at the bottom of the totem pole. Did you feel there were more entre