Oil Industry Bypasses Alaska Legislature on Tax Break Campaign

04/15/2011 03:04 pm 15:04:18 | Updated Jun 15, 2011

JUNEAU -- The oil industry is continuing to turn up the political heat on lawmakers reluctant to cut taxes on North Slope production even as Gov. Sean Parnell's proposed tax restructuring appears to be put off until next year.

At the same time, some legislators are continuing to examine ramifications of a tax reduction in light of new information being offered by industry executives in an effort to bolster public support for a tax break.

BP Alaska president John Minge is slated to address an Anchorage oilfield support group on Thursday about the oil tax reform debate. Last week, ConocoPhillips chief executive Jim Mulva spoke to the Make Alaska Competitive forum and suggested if the tax cut is enacted North Slope operators might invest another $5 billion in Alaska.

With four days left before the legislature adjourns, the speeches by top executives to sympathetic audiences in Anchorage rather than substantive meetings with lawmakers in Juneau has added to the tendency to dismiss whatever the industry might say as political posturing.

"I think that the reason is they don't come and talk to us is they don't really have anything to tell us," said Rep. Mike Doogan, who has been opposed to the governor's proposal because the industry has not convinced him that it will take the money it is saving in taxes and invest it back in Alaska.

He noted that Mulva didn't talk about anything new, just projects the company already had on the drawing board, and that none of them involved new discoveries or new exploration. "Somebody else doing the same thing, it's not going to impress anybody," he said about Minge.

Opponents: Oil tax public relations lacks substance

Rep. Les Gara, another critic of Parnell's tax bill, said its easier for companies to make their pitches to a pro-industry group rather then the Legislature because they don't face tough questions.

"Until they actually start promising to do exploration in new areas, its all just PR," Gara said.

Jason Moore, spokesman for Make Alaska Competitive, said his group had asked Minge to speak to its members and others interested in the tax debate. The group wanted to hear from BP after Mulva's remarks last week.

BP spokesman Steve Rinehart said BP representatives have testified before legislative committees when invited. He did not directly respond to a question about why Minge didn't meet with lawmakers in an effort to explain in more detail the company's plans for investment in Alaska. Rinehart did suggest senators did not seem open to hearing what the company had to say.

On Monday, Senate President Gary Stevens addressed the full Senate after handing over the gavel in order to make an unusual speech on the Senate floor. He decried the campaign by tax proponents such as Parnell and groups like Make Alaska Competitive as frightening citizens in order to get them to call lawmakers and urge passage of a measure that legislators don't fully understand. In the speech and in interviews, he has called remarks like Mulva's "a wing and a hope and a prayer" rather then firm plans to do specific new development projects.