As I watch the ongoing efforts to change the structure of Alaska’s taxes on petroleum extraction operations, I keep contrasting the goldfish in our legislature with the barracudas who have taken charge in other oil producing regions of the world. It is not a flattering comparison.

     In Juneau, our legislators are timid, domesticated little goldfish, content to legislate inside the glass box assigned to them by the oil companies. They are happy to receive a few crumbs from their masters, and fear that if they ask for more, they might be evicted from the aquarium.

     In other parts of the world, barracudas demand a much more favorable type of relationship with the oil companies. The OPEC countries learned decades ago how to cooperate with each other to support their mutual best interests. That cooperation has resulted in an incidental benefit for Alaska, in the form of elevated oil prices, but our legislature has certainly never done anything to actually cooperate with other oil producing regions in this manner. Our gold fish are afraid to swim with the barracudas.

     A few years ago in Venezuela, President Hugo Chavez took control of his nation’s oil fields and insisted that a substantially increased share of the oil wealth be paid to the government. He has used that money to fund education, health care, energy subsidies and other governmental programs that actually benefit the people of his nation. Our gold fish would not dare to use oil revenues to provide health care for the citizens of Alaska. The oil companies might disapprove.

     Within weeks after he came into power this year, President Evo Morales of Bolivia threatened to expel oil companies unless they agreed to accept revised contracts which gave a substantially greater share of the wealth to the government. The oil companies quickly capitulated. None of our goldfish have proposed anything even a tenth as bold as that.

     Our goldfish claim that they just want to ensure that the oil companies continue to look for oil, and do not pack up and go home. That explanation makes no sense at all. No one in the legislature has pointed to even a single instance where the oil companies have left a productive oil-producing region just because the government demanded a fair share of the oil revenues. The recent events in Venezuela and Ecuador clearly show that the oil companies will continue operating, even with a much smaller share of the oil wealth.

     A much more likely explanation for the timidity of our goldfish comes not from oil, but from gold. The Juneau goldfish like gold, and they get a lot of it in the form of kickbacks. They call it “campaign contributions” but kickbacks are exactly what they are. The oil companies make sure they sprinkle enough of these into the aquarium to keep a majority of the gold fish dependent on them.

     There is a reason why the gold fish are talking about “locking in” a new tax structure for the next 30 years. It is an idea that the oil companies have fed to them. The oil companies are well aware that the era of cheap oil is at an end, and that with some fluctuations oil prices are likely to stay at or above the current high levels in years to come. Those high prices will continue to bring them high profits, which will present a continuing tempting target for taxes in Alaska. The oil companies are offering a very slight increase in taxes as an incentive for us to lock in extremely low tax rates for the remaining life of Alaska’s oil fields.

      Our goldfish seem to be willing to bite on that lure. Fortunately for us, the current legislature cannot actually lock in a tax rate that is binding on future sessions of the legislature. Any law that is passed today can be repealed by a future legislature and replaced with a different law. But for that to happen, we need to evict the goldfish from the aquarium and replace them with some barracudas.

     Our first opportunity comes in November of this year.

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