Empire editorial: Sorting through oil industry lies

Posted: Sunday, November 04, 2007

The oil industry has been as good at spinning falsehoods about Alaska as it is at making money here.

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Industry officials have been claiming that Alaska is changing its tax rate right and left, and is as unstable as Nigeria. These claims are blatantly untrue and show how the industry is willing to say whatever it takes to prevent the state from raising taxes.

One false claim, by the CEO of the Exxon Mobil Corp. to Wall Street investors, is that the state has raised taxes at least 13 times in recent years. And an advertising campaign aimed at shooting down Gov. Sarah Palin's tax proposal incorrectly claims that Alaska oil taxes have been changed three times in the last three years.

The real truth: Alaska changed its tax structure in 1981 and again in 2006. That's two times in a quarter century.

Now the Legislature is in a special session to revise the 2006 tax system tainted by corruption and bribery.

The oil industry is ignoring that one of its own had a major hand in why Alaska's oil tax system needs reviewing at this time. The entire oil industry cannot be faulted for the crimes of just one company, VECO Corp., whose top executives have pleaded guilty to bribing Alaska legislators to push for a tax favorable to oil producers.

But when the industry starts falsely claiming that Alaska is constantly changing its oil taxes, it needs to own up to the fact that if VECO hadn't tarnished the legislative process by bribing lawmakers, the governor would not have had strong grounds for calling the current special session on revamping oil taxes.

Big Oil is pushing the Legislature hard on taxes, and each time a public comment period is opened up, employees in the oil industry and businesses that depend on it weigh in and argue for keeping taxes low.

The state does not want to scare its biggest industry away with onerous and unfair taxes. But considering the oil industry's recent track record on honesty, lawmakers need to carefully fact-check the claims the industry makes during this special session.

Legislators also need to keep in mind that oil producers are faring better in Alaska than in many other places around the globe. According to the latest financial reports, oil companies are experiencing slightly declining profits from refining oil because of lower gas prices. Oil companies are still enjoying strong earnings from oil production itself, which is their main activity in Alaska.

Lawmakers have a tough job wading through the technical details of oil taxation. But an even harder job is sorting through the spin and making sure they don't get hoodwinked by an oil industry that is playing fast and loose with the facts.



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