Update on SB 305: the Petroleum Profit Tax

First, I want to congratulate my good friend Senator Hollis French for his victory in the case that will be known forever as French v. Murkowski. On Friday, an Alaska Superior Court Judge affirmed that the people of Alaska have the right to see the alleged gasline contract before the legislature forced to vote on a rewrite of our oil and gas taxes.

Earlier in the session, I wrote about the oil and gas tax rewrite bill soon after it was introduced. Since then, I have participated in many hours of hearings and watched half a dozen distinct versions of the bill develop. Unfortunately, many of my original concerns are borne out in the current version of the bill.

Literally dozens of provisions of this bill are highly technical, and were likely written by oil industry insiders. The tax rates are significantly lower than the state’s consultants recommended. As the Legislature has worked to improve some of the worst provisions, we have been bombarded with a misleading, disingenuous advertising campaign from oil companies and their front groups, along with thinly veiled threats to cut their charitable contributions and even leave the state. The Senate added language that would cut the tax rate on natural gas to a negative number. We would pay the oil companies to develop our gas.

After all this work, the bill before the Legislature is back to what the Governor wanted, the so-called “20/20.” Now there is a push to ram the bill through the House of Representatives in the session’s last two days. I do not trust the projections that say our oil revenue will increase from this bill; there are too many gray areas and unknowns. We must remember these are Alaska’s resources constitutionally and we are obligated to get the maximum benefit for all Alaskans.

We are told that the PPT tax, if approved, will be locked into the gasline contract for 30 years. This is not only unconstitutional, it is irresponsible. Soon, we will see the gasline contract and learn the truth about its many rumored provisions. I sincerely hope it is a good contract with fair terms and a real construction commitment. I will support it wholeheartedly if it is. However, if this is another giveaway to the oil companies with nothing but another 20 years of empty promises to Alaskans, rest assured I will do what is right for Alaska.