Lost oil revenue means lost opportunity

The governor-ordained special session gets going in earnest Monday, with much continuing to be at stake for Alaskans. Two big-ticket items with the potential to shape the state's economy for decades to come still remain to be resolved.

One, oil industry &#8220tax” reform, would redefine the way the state collects its due for its petroleum resources, potentially increasing state revenue in the process. The other, a controversial natural gas pipeline contract negotiated by Gov. Frank Murkowski with the North Slope oil producers, presents another big revenue opportunity for the state.

If approved by the Legislature, it also would represent a big feather in the cap of the governor. In this, an election year, the political value of such an agreement has undoubtedly contributed to the contentiousness surrounding the issue.

With such high stakes involved for both the governor and the state, and with so few legislators expressing optimism about an agreement being hammered out, alarms are now being raised about the potential for Murkowski to simply sign the contract without the Legislature's approval. Although he recognizes the lack of constitutional clarity about his legal power to do so, Murkowski has not definitively ruled out the possibility.

Such a &#8220threat” could be little more than executive arm-twisting, but the state House appears unready to take any chances. One of the first legislative orders of business scheduled Monday is the adoption of a House Joint Resolution calling for a public vote on a constitutional amendment requiring the Legislature's approval for natural gas contracts in excess of $1 billion. The measure apparently has broad bipartisan support in both the House and Senate.

With so many questions still remaining about the contract and its long-term utility to the state and its residents, we are all for not rushing into this deal. But we urge the Legislature to act with the same resolve to reach a workable agreement on industry taxes.

There has been much haggling in recent months over what is the best way to extract the constitutionally mandated &#8220maximum benefit” from the state's oil resources. Initially, the governor's proposed petroleum production tax was in the spotlight, before enthusiasm for it rightfully waned. Since then, other proposals have been discussed, including one that would simply tweak the system already in place.

Nearly everyone agrees that a change is necessary to ensure that the state and its people are fairly compensated for the use of their resources. Sadly, as negotiations continue and compromises remain elusive, millions of dollars a day - $3.2 million per day, according to the governor - in potential revenue also remains elusive.

It is our hope that if nothing else is accomplished this special session, that meaningful progress can be made on a solution for redirecting the flow of this lost money into state coffers.