Pressure ramps up on lawmakers as Senate oil-tax vote nears

JUNEAU -- Outside of the Alaska state capitol building on Wednesday, a group of legislators and citizens waved signs, sang songs, and demanded justice for the botched prosecution of former Alaska U.S. Sen. Ted Stevens. Gov. Sean Parnell, among others, gave a speech about Stevens, the longest-serving Republican U.S. senator in history. Wearing a replica of the famous "Incredible Hulk" tie given to Parnell by Stevens's daughter Lily, the governor promised to, like Stevens, fight for Alaska, and see justice done.

Because a straight line can be drawn between the prosecution of Stevens and the oil tax debate in Juneau in 2005-06, that the rally took place during the thick of yet another heated oil tax debate might have struck some as ironic. Particularly since the current debate, the third in seven years, is an indirect spawn of that Murkowski-era one, one that will live in infamy.

Acknowledging the irony, however, wouldn't bode well for Parnell's agenda. And irony wouldn't fit the mood inside the state capitol Wednesday, anyway, where another oil tax bill -- one that doesn't enjoy the governor's blessing -- was in the process of jump-scotching from one Senate committee to the next.

As details were hashed out that would at long last move Senate Bill 192 -- the Senate's answer to Parnell's demand for state oil-tax reform -- to a full vote on that chamber's floor, groups hovered in the capitol's halls, oil executives and lobbyists huddled and harried senators walked around, whispering to their aides.

To the dismay of some, senators aren't debating whether Alaska should cut taxes on its oil producers. Rather, the debate revolves around how much of a break to give some of the most profitable businesses in the world.

Parnell has pushed hard for tax breaks of up to $2 billion a year when oil is priced at $120 barrel, which is where its hovered recently. If oil rises to $150, that tax break would increase to nearly $3 billion a year under Parnell's plan.

Parnell has repeatedly said the tax break means more investment by industry in Alaska, a state where more than 85 percent of state government is funded by oil taxes and royalties.

Others, who are more skeptical of the oil companies, want these commitments in writing before giving away so much.

Under the current structure, Alaska's oil industry -- dominated by Exxon Mobil Corp., BP and ConocoPhillips -- makes a combined annual profit of about $4.8 billion off of Alaska's reserves when oil is priced at $110 a barrel. When it's $120, that total is more than $5 billion.

The state's take is roughly double that.