SPECIAL BONUS EDITION!!!
Bumfuzzlement rules

It’s still bumfuzzling

I’ve been all over the bumfuzzlement meter the past couple of days. Since my last E-news special edition, the powerful House Special Committee on Oil & Gas, of which I am a powerful member, has heard more from the Palin administration and from a host of oil companies, including a fellow speaking for a bunch of oil patch investors from Kansas. Yes, I said Kansas. Go figure.

Many of these people are using figures and scenarios and predictions and tax tables and, most dreaded of all, economic models. No people use the same numbers for anything, so making comparisons is difficult. Here’s an example: Yesterday, the Exxon spokesman answered several questions from Rep. Ralph Samuels about the company’s investment, and answered each in a way that Samuels – or anyone else – wouldn’t be able to compare them to each other. All in all, we’ve been getting numbers thrown at us 19 to the dozen.

Anyway, I’m sitting at the committee table during all this, flapping my mental wings as fast as I can to keep up. Unfortunately, I have to admit that from time to time something gets said in the committee that I just don’t get. Sometimes it’s said by somebody at the witness table and sometimes, frankly, it’s said by another committee member. So, to display my confusion, my aide, the invaluable Ryan Jager, and I created a bumfuzzlement meter. And, as I said at the outset, I’ve been all over that baby in the past couple of days.

This is difficult subject matter with few cut-and-dried facts to cling to. But that’s okay. I’m used to being in over my head.

What’s been happening?

Well, the administration people all really like the governor’s proposed changes to the oil production tax. And the industry people pretty much don’t. Funny how that works, isn’t it?

And the committee members, at whom all these dueling opinions are aimed? Well, some are pretty defensive toward the PPT. Understandable, since they had a big hand in writing it. So, like I said last time, I’m expecting the committee chairman to roll out a substitute bill that exempts auditors and maybe does a few other administrative things the governor wants but doesn’t change the current tax law. But not until after we’ve had more big testimony fun.

The effects of corruption

I’ve been hearing from people, both in committee meetings and in the halls, who say the corruption revealed in various indictments and trials didn’t have anything to do with the PPT law that finally passed. Their argument is that the legislators indicted so far wanted lower rates and lost, so good triumphed in the end despite their efforts.

If only it were that simple. But it’s not. I’ve only been here one session, but I can tell you that influence is more than how you vote on the floor. It’s what you do and say in committees, in the hallways, in the legislative lounge and even what you say while drinking adult beverages outside the Capitol.

Plus, Veco’s influence – and, by extension, the oil industry’s influence – wasn’t limited to who said what to whom in Room 604 of the Baranof. Over the years, the company’s employees gave lots of campaign money to politicians, most of them Republicans, members of the House and Senate majorities who could make things happen or stop them from happening here. According to the man who owned Veco all those years, Bill Allen, he reimbursed the employees for the contributions, making them illegal.

And no matter what anyone says, campaign contributions equal influence. A contribution might not get you what you want, but it will get you listened to. And if you are a big contributor, or represent a big contributing group, it will get you listened to with careful attention.

What I’m thinking

I’m leaning more and more toward a so-called hybrid tax plan. We were told at the outset that the difficulty of writing a single tax for oil industry activity is that it is so varied, from exploring on one end to continuing to pump the regular old North Slope crude that makes the companies rich, rich, rich. If you write the tax for explorers, you leave a lot of money on the table for producers. If you write it for regular North Slope production, you sock it to the explorers.

So one of my first coherent thoughts on this subject was, if writing a one-size-fits-all tax is so hard, why don’t we write a two-tiered tax? And I haven’t heard anything so far that changes my mind.

More later,