On President’s Day, the House Resources Committee heard from the Legislature’s new-old oil & gas consultant, Rich Ruggiero, who is to be paid up to $35,000. We say “new-old” because while this is the first time he’s appeared this year, Mr. Ruggiero is not a new player in Juneau – in fact he was brought in by the Palin Administration to work on putting ACES together.
During his testimony, Mr. Ruggiero made some interesting comments that caught the attention of Headlamp and others.
First, he implied that across the world the oil and gas industry trots out the three same “detractor themes” to suggestions of higher taxes. He implied the oil & gas industry always claims stability, competition and jobs will be impacted if governments seek higher taxes on industry. Instead of taking into account these legitimate concerns, Mr. Ruggiero suggested to legislators they need not worry about having an oil tax regime that encourages stability, competitiveness and job creation.
Mr. Ruggiero’s second point dealt with the following slide put together by business consulting firm IHS.
The slide, which only goes through 2011 shows how governments reacted to different oil prices. Green blocks indicate policy shifts toward lower taxes/financial incentives for industry; while orange blocks represent tax increases. Oddly enough, when asked for an updated slide showing what governments have done during the recent oil price crash Mr. Ruggiero contended that obtaining such information “would be quite an extensive effort,” and “wasn’t sure what it would inform” members of the committee.
You’ll note at the bottom of this slide, Mr. Ruggiero goes so far as to state “The period of 2012 to 2016 is populated with many more changes similar to the above.” Oh really?
Fast forward to Wednesday night. The House Resources Committee met again and this time heard from Kara Moriarty, CEO, of the Alaska Oil Gas Association. Incredibly, Mrs. Moriarty went through an “extensive effort” (not really, she simply went online and did a little research) and found the IHS slide updated through 2016 with data members of the committee asked for! Here it is in all its glory – showing that ALL governments EXCEPT Alaska during the recent oil price crash implemented policy offering financial incentives to industry (aka lowered taxes) instead of increasing taxes.
Let us repeat: according to this data, Alaska – with the passage of HB 247 last summer – is the only oil regime to INCREASE taxes during the recent oil price crash.
Headlamp is unsure why Mr. Ruggiero said he couldn’t provide this extremely relevant slide to the committee, when in fact it was readily available, for free, online from the same organization.
As Albert Einstein once said, “Whoever is careless with the truth in small matters cannot be trusted with important matters.”