It's clear; if we don't start coming together it's going to come apart. I make this observation in the context of a potential gas line.
     So far there's no coming together by the parties to the contract. Any contract must be endorsed by the legislature, acting for Alaskans, and pipeline builders. Allegedly, Conoco, Exxon and BP have agreed to build and they know the details. The legislature, the other party to this potential deal, knows nothing.
     The commissioner of revenue, and by implication the governor, are only the agents of negotiation for the legislature. So it's more than passing strange that the commissioner and the governor refuse to share with the legislature, for at least another month, the deal they say they've cut with enormously wealthy and powerful multi-national oil and gas companies who some contend are using Alaska like an ATM machine. One party to the contract, a conglomerate of companies who netted $37 billion last year, knows all the details. The legislature and all other Alaskans know zippo.
     We delegated some negotiating authorities to the commissioner of revenue and the guv. They've said 'yes' to BP, Exxon, and Conoco but say 'no' to the legislature Alaskans on whose behalf they negotiated.
     Adding to the bizarre nature of the governor's secretiveness is the fact that he is apparently more forthcoming and candid with elected Canadian officials than he is with Alaskans and elected Alaska officials. Over the past few days, it's Canadian politicians who've told Alaskans ancillary gas line details the governor has never shared--details like the Northwest Canadian Mackenzie gas line probably precedes construction of our gas line.
     And there is no legal reason, not a one, that precludes release of our gas line contract if the guv has struck a deal. Actually, there's no legal reason he can't release almost every detail of a draft contract (if all the t's haven't yet been crossed).
     The only reason the governor hasn't released any details is because he doesn't want to. He simply asks the legislature and Alaskans to trust him and the mega oil companies (as if they've built up a great reservoir of trust. Let's not forget the Tom Irwin imbroglio and Exxon's 17-year fight over court-ordered payments to Alaskans damaged by Capt. Hazelwood and the Exxon Valdez).
     Despite the governor's decision to not share the contract, some details are emerging piecemeal from the fog of secrecy. Some troublesome elements of the contract include:

• Royalty gas in kind--We have the option of taking our royalty oil either in cash value or in kind. The gas line contract does not give that option to Alaska for gas. We'd have to set up our own gas sales department and sell our royalty gas to willing buyers.
• Severance taxes in kind--It may also be true that the gas line contract provides that producers give us gas instead of dollars to pay their gas severance tax bill. We'd have to also sell those "tax payments" on the open market.
• Equity ownership--It's pretty much a given the gas line contract commits Alaska to buying 20 percent of a gas line that could cost $30 billion or more. It seems there are at least three decisions that must be made by the legislature: 1) should we pay for any part; 2) if we pay, what is a reasonable size share; and 3) where do we get the bucks to pay for our share (the governor has asked our permanent fund gurus to look into this and, presumably, an option is using permanent fund dollars).
• Oil tax guarantee--It sounds as if the governor has contracted away in the gas line pact the ability of future legislators to change oil taxes for 30 years. 30 years! Our present oil tax recipe got out of whack in less than a decade yet he's telling oil companies we'll lock a new tax in for more than a generation. Then there's his problem with the Alaska constitution which pretty plainly says we can't contract away our taxing authority.
• 45 year gas tax guarantee--Ditto the above bullet point but add 15 more years of angst and inappropriateness.
• Voiding voters--One well-sourced economist/journalist says there's a secret provision in the guv's gas line contract that trumps Alaska voters if they decide to pass an initiative that levies a reserves tax on Alaska's stranded gas if the multi-nationals keep it stranded.
• 300 pages--plus attachments. That's how long the gas line contract runs. It took some smart folks in the legislature and a raft of consultants five weeks to understand and fix the governor's 22-page oil tax bill--and that was only in the senate's first committee of referral. It doesn't necessarily follow that a 300-page contract will take 13 or 14 times as long to understand and fix in its first committee of referral but. . .
• No guarantee--and, even with all the above enumerated concessions along with others tucked away in the gray anonymity of 300 pages of dense language, there's no firm commitment by the multi-nationals to even build a gas line.

     Pretty interesting stuff. Yet the litany from the governor's bully pulpit, echoed in the expensive and pervasive ads paid for by the corporate behemoths, is Alaskans must take the governor's oil and gas tax recipe or lose the gas pipeline contract they're not allowed to read. Maybe the reason the only folks who know what's in the gas line contract want to keep it secret from Alaskans is because the putative gas line contract is a dud. And it's hard to leverage lower taxes with a dud.
     In this case, a scarcity of information on the gas line may simply be enabling the 'scare city' tactics the governor and multi-national oil companies are using in the oil tax debate.
     (As an addendum to this column, GOP gubernatorial candidate John Binkley sounded like Ethan Berkowitz and Eric Croft--the two Democrat candidates for governor--in comments made this week in Juneau. He said he also believes: Alaska should take a hard line with the oil industry on taxes; Alaska should not lock tax rates in over a long period of time; and the governor should tell Alaskans what's in the gas line deal he's negotiated with oil industry giants. His comments were reported in the Fairbanks Daily News-Miner.)

Phone: (907) 465-4947 Fax: (907) 465-2108 Mail: Sen. Kim Elton, State Capitol Juneau, AK 99801   Got a scoop? Call or email your tips and suggestions to any of the email addresses below: Email: Senator.Kim.Elton Jesse.Kiehl Paula.Cadiente Web: http://elton.akdemocrats.org

Capitol Undercurrents  

The big time--It must be spring time 'cuz Juneau's full of musicians gathered here for the Folk Festival. The first few times I attended everybody fit in one of the adjunct rooms at the state museum. This is the first time, though, I've participated in the event--making a very brief guest appearance with the Bluescast, a fixture at the festival for 27 years. The Bluescast was on just before this year's guest artist Nanci Griffith. Now I can add to my resume that I opened for Nanci, the artist Rolling Stone dubbed "the Queen of Folkabilly."

Be worried, be very worried?--Conoco invited representatives of Alaska non-profits to a meeting at the Conoco Anchorage office complex Thursday (check in with security at the kiosk and they'll give you a pass the invitees were told). The topic is oil taxes and the message is taxes "will have negative impacts on future jobs and investment in Alaska." My bet is the not so subtle subtext for the nonprofits is that higher taxes could also affect corporate donations to nonprofits so please protest to your legislators.

Top of the heap--Exxon knocked WalMart from the top of the Fortune 500 list of mega U.S. businesses this year. Conoco jumped into the top ten this year also. BP, the other potential Alaska partner in the construction of a gas pipeline is not on the list because it is a foreign company. Details of the gas line contract remain veiled while these three companies fight legislative plans for fair share oil taxes.

Top guns and holey hats--Okay, for the first time in years I missed the legislative three-gun shootout because of a schedule conflict (I really did have a conflict--I'm not afraid of legislators with guns). So, I'm not there and for the first time my team won. I think the best we'd done before was third. Two of my staff teamed up in a bi-partisan way with a staffer from Sen. Charlie Huggins' (R-Wasilla) office and won the whole shootin' match. Jerry Burnett, a former legislative staffer now ensconced in the Department of Revenue, took top honors individually. En route, he nailed 25 of 25 clay pigeons and his hat. Per trapshoot tradition, the first time you hit 25 straight, you must shoot your hat. Too bad, Jerry was wearing his favorite but unfashionable, some might say drab, camouflage ball cap, for which he'd paid an ungodly amount at an Outdoor Council fundraiser.

Republiguns--Sen. Ralph Seekins' shooting team (the 'Republiguns') held first place for awhile at the three-gun shootout. When the team from my office (obviously mis-named the 'Be Kind to Targets Team') posted a score better than the Fairbanks GOP senator's team, he called his team back for a second run at the title. Didn't do 'em any good. They didn't, shall we say, shoot to the top.

Getting to know you--Rep. Eric Croft walked a Juneau neighborhood last Saturday in his quest to become governor. He told one Capitol denizen he now knows why Rep. Beth Kerttula and I never, ever, complain about our constituents. Just confirms what we both know--we have some of the best Alaskans in Alaska.

What are you doing this summer?--Hope your family plans include a break. I may be in a couple of special sessions. It seems the latest gas line schedule is that the legislature will go into special session for 30 days or so right after the regular session ends. At that time, the governor will finally present his gas line contract along with a bunch of amendments to the legislature's stranded gas act. During the initial special session, the guv's folks will do a primer on their 300-page contract. Then, the legislature breaks and public hearings may be held around the state. That's the latest plan but stay tuned. As an aside, when Senate Finance included money in the budget to pay for potentially two special sessions, Sen. Lyman Hoffman (D-Bethel) noted the sessions weren't necessarily special, they were just extra.