by Dermot Cole
The Dunleavy administration wants to defeat the oil tax initiative in the worst way.
Attorney General Kevin Clarkson and Lt. Gov. Kevin Meyer have chosen to go about it in the worst way, distorting what is supposed to be a “true and impartial summary” of the ballot measure with clear falsehoods.
The oil industry wasted no time in echoing the false claims from Clarkson and Meyer in one of its first attacks on the initiative. “The state of Alaska’s own legal analysis identified flawed aspects of the measure,” the new lobby group funded by the oil companies claimed.
What’s flawed is the state’s legal analysis from Clarkson and the ballot summary from Meyer.
Anchorage attorney Robin Brena filed a lawsuit Nov. 14 as the first step in trying to correct the distorted summary and hold the administration accountable.
I wrote here on Oct. 23, that there is no secret about what happened—the Dunleavy administration has taken an egregious step to interfere with the initiative process by claiming the measure is confusing and will lead to uncertainty. If there is any confusion and uncertainty here, it’s why anyone in the Dunleavy administration thinks they should be able to get away with this.
One of the key distortions deals with the laughable claim from Clarkson and Meyer that the word “and” means “or.”
The text of the initiative states that the tax provisions would only apply to oil produced from fields “that have produced in excess of 40,000 barrels of oil per day in the previous calendar year and in excess of 400,000,000 barrels of total cumulative oil production. For other oil production, the tax shall be unchanged by this act.”
Clarkson and Meyer know as well as anyone that this means the additional tax would only apply to oil fields producing 40,000 barrels per day in the last year and 400 million barrels over the life of the field. There are only three large fields that meet those levels—Prudhoe Bay, Kuparuk and Alpine.
“The use of the conjunctive term ‘and’ in the applicability section of the Fair Share Act makes clear both production thresholds must be met,” Brena’s lawsuit says.
Clarkson and Meyer have distorted the summary to claim the language in the initiative could mean that the tax applies to fields that produce in excess of 40,000 barrels per day “or” fields that have had 400 million barrels produced in total.
The reason this is crucial is that under the Clarkson/Meyer misinterpretation the tax would soon apply to a variety of newer and smaller oil fields that may top the 40,000-barrel target before long.
The distorted Clarkson/Meyer summary says, “It is unclear whether the area has to meet both the 40,000 and 400,000 million thresholds or just one of them.”
What is clear, is that the false Clarkson/Meyer claim will become a major talking point with the oil industry as it raises the specter that the oil taw will not just apply to Prudhoe, Kuparuk and Alpine, but to the new fields Oil Search is developing and others.
An honest summary from the state would defeat that oil industry talking point.
The second major distortion from Clarkson and Meyer is that they claim to know so little about the existing oil tax law in Alaska that they don’t know what the “additional” tax means in the initiative. “The Fair Share Act plainly imposes an additional production tax via amendment without repealing or otherwise altering the existing production tax anywhere in its provisions,” Brena’s complaint said.
More than 28,500 signatures are needed in the next three months to get the measure to a vote in 2020. The Dunleavy administration has refused to give the initiative backers a fair shake, so it will be up to the courts to decide if an honest summary is to be provided to voters.