A Citizen’s Guide

One of those pushing the House’s oil tax proposal to the Senate gas committee this morning was Rep. Mike Kelly, a Republican from Fairbanks who’s consistently advocated a high production tax rate.

Kelly said he had a “completely different” take on oil taxes and was still able to come to agreement with the sponsors of the House version, which ties tax rates to investment per unit of production and sets them between 20 and 25 percent.

He described the bill as one that appeals to lawmakers across the spectrum. The big taxers will appreciate the progressivity and potentially high rates. Those who favor a 20 percent rate can find comfort in the potential that tax rates could effectively drop to 20 after a few years.

Popularity is important because any tax proposal has a “triple hurdle” to jump—the Senate, the House, and the governor—and the hour is late.

But it’s just that flexibility—or uncertainty—that brings shivers to Pedro van Meurs, the governor’s lead adviser on oil and gas issues.

“I really almost beg the Legislature, go back to something that is simple,” he said Tuesday.

Van Meurs said he would be happy with the governor’s 20-percent PPT bill or a 22.5 percent bill but would not want lawmakers to approve something they thought was about 22.5 but slipped over the years to 20 because of how oil companies tailored investment decisions to the tax.

“My goal is to establish a stable new future for Alaska,” he said, “and you don’t get that with smoke and mirrors.”

Senate Republicans are meeting to hash out their version of oil tax reform, with 2.5 days left.