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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.
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