Business/Economy

BP agrees with Conoco on investments if oil tax cuts pass

BP's top Alaska official seconded the earlier pledge of Conoco Phillips to invest $5 billion on the North Slope if the governor's oil tax cuts pass, then promised even more but said he couldn't be specific.

In a lunchtime address and rally on Thursday billed by the Make Alaska Competitive Coalition as BP's chance to present "specific commitments" should the cuts pass, John Minge was short on details -- he said he didn't want to waste company money making plans that won't be pursued under the current tax regime.

But that didn't stop the 250 or so on hand from cheering when he said:

"People say, you know, 'Where's your promise, what can you promise?' When you haven't done all the work, you can't promise everything. But I guarantee you, what I will do is I'll stake my career on it -- I will stake my career and my reputation that this will make a big difference to Alaska and it will be good for all Alaskans."

The question of what the major oil companies will do in return for billions of dollars in tax savings has been one of the critical issues hanging up Gov. Sean Parnell's efforts to reduce state taxes when oil prices are high. He says that oil companies would invest more money in Alaska if taxes were lowered, creating jobs and putting more oil in the trans-Alaska pipeline.

But Republicans and Democrats in the state Senate have said those assurances are hollow without specific industry pledges. The House narrowly passed Parnell's bill March 31, but this week Senate leaders announced its death in their chamber this session.

On April 7, while the bill was still hanging by a thread in the Senate, Conoco Phillips chief executive Jim Mulva made a brief stop in Alaska to pledge $5 billion in investments in existing fields if taxes were lowered. Some of those plans would need the approval of BP, the operator and a large owner of the sprawling Prudhoe Bay field.

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On Thursday, Minge seconded with BP's assurances, then added, "$5 billion is just the start in what is possible -- I see much more."

Explaining why he had no details other than a new seismic program, Minge said: "We have not done enough engineering work, though, to get perfectly specific, and the fact of the matter is, if you get too specific, everyone wants to back you into the corner. But there are projects in the hopper that I know will work and I'm excited about moving them forward."

The forum for both Mulva and Minge was the Make Alaska Competitive Coalition, a committee whose steering committee contains representatives from industry support companies, the Teamsters and three regional Native corporations along with several senior Alaska political and business figures. Minge's address was hosted in a warehouse in the Ship Creek industrial area owned by Carlile Transportation Systems, a nonunion trucking company and member of the coalition.

Signs on the rafters indicated the importance of oil to Carlile: They marked large sections of the warehouse for sorting goods to be shipped to Prudhoe Bay and Kenai, among other parts of the state.

The crowd was a mixture of people in business suits and blue-collar work clothes and was large enough to require Carlile employees in orange vests to direct traffic on First Avenue. Minge came dressed for both crowds, wearing BP-logo Carhartts and jeans above his polished brown business shoes.

Minge said it was worth talking about Parnell's tax plan even if it was dead this session.

"We're in for the long haul," he told reporters after his address. "I absolutely believe the tax law will change in time; it's just a matter of when. Our tax expert, the guy who knows way more about this than me, said, 'John, it just may not be bad enough yet. It may need to get worse before it gets better.' "

He quickly added, "That's not a threat. I'm on your side; I want more investment, more jobs, more tax revenues for the state."

By RICHARD MAUER

rmauer@adn.com

Richard Mauer

Richard Mauer was a longtime reporter and editor for the Anchorage Daily News and Alaska Dispatch News. He left the ADN in 2017.

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