Morning Headlamp — Zinke Represents New Era for Alaska – Department of Interior Relations

A Senate committee advanced Ryan Zinke’s nomination to be President Trump’s secretary of Interior. Zinke’s nomination was approved 16-6 by the Energy and Natural Resources Committee and will move to the full Senate next. Four Democrats joined every Republican in backing Zinke, and one, Sen. Ron Wyden (D-Ore.), abstained from the vote.

A New Hope. In related news, Gov. Bill Walker on Monday expressed renewed hope for working with the federal government on oil, gas and land issues, praising President Donald Trump’s pick to head the Interior Department as “just what we need.” Walker has already met Ryan Zinke informally while attending President Trump’s inauguration and seems confident about Alaska’s future prospects. “I think we’re going to have a very, very different relationship, certainly with the Department of Interior and what they oversee,” Walker said. His comments were similar to those expressed by Sen. Lisa Murkowski, who said U.S. immigration policy “must strike a balance between national security and our values as Americans and that how we implement policy matters.”

Back at it again. With yet another oil tax fight on the horizon, the House Resources Committee began a week of hearings Monday on the state’s oil tax regime and related tax credits—however many of the familiar faces of previous debates have come and gone. Former committee Vice-chair Mike Hawker (R-Anchorage) and Co-chair Ben Nageak (D-Barrow) are gone. Hawker retired, while Nageak lost a close primary to Rep. Dean Westlake (D-Kotzebue) that was ultimately decided in the courts. Westlake, now House Resources Vice-chair, is one of five freshman legislators on the committee.

As a reminder. Walker vetoed the credits down to the $30 million recommended by the formula. This year, he has proposed the minimum payment of $74 million. “What the governor has done in the most recent budgets is to say, ‘While we’re still in extremis here, let’s just use the statutory number. Let’s not pay more than we have to. They don’t lose value. They don’t go away. Companies could use them to offset their future taxes…and when funding is available, we’ll pay for them,’” Tax Division Director Ken Alper explained.

There have been six changes to oil taxes in the last twelve years, prompting Tax Division Director Ken Alper to call it “The Volatile Period.”

Alper’s presentation was notable for what was missing. Alper forgot to disclose the amount of money the state has received in oil and gas revenues vs. the amount of money it has paid out in oil and gas credits. $62.1 billion in petroleum revenue from FY 07’ thru 2015 vs paying out $3 billion in credits during that time period. In the last legislative session, committee chairs were adamant that the information be included in presentations. Likewise, Alper glazed over the facts about what happened to investment, production levels, and jobs under the ACES tax regime (2007-2013) while only mentioning how much revenue the state took in. Finally, Alper was incorrect in his assertion that the Petroleum Production Tax (PPT) was a neutral oil tax policy – it was a tax increase.


First Reads

Senate committee approves Zinke to lead Interior
The Hill, Devin Henry, January 31, 2017

Walker hopeful about working with new federal government
Associated Press, Becky Bohrer, January 30, 2017

The Volatile Period: House Resources Gets Update on Oil Taxes and Credits
Alaska Commons, Craig Tuten, January 30, 2017

Alaska lawmakers mull spending cap amid deficit
Associated Press, Becky Bohrer, January 30, 2017

Travel ban frays Big Oil ties in Middle East
Alaska Dispatch News, Collin Eaton, Jordan Blum, David Hunn, January 30, 2017