Alaska's oil industry proved its political clout remains strong despite the Exxon Valdez spill when the state Senate narrowly rejected an effort to raise oil taxes.
The industry's credibility in the wake of the March 24 accident was the center of debate late Sunday before the chamber voted down the increase 11-9.A bill to revise an oil-tax break known as the Economic Limit Factor, or ELF, took three years to get to the floor of the Republican-led Senate. The Democrat-controlled House approved an ELF bill twice, in 1987 and this year.
Proponents of the bill said the tax break should not apply to the two biggest oil fields in the nation, Prudhoe Bay and Kuparuk on Alaska's North Slope. Industry officials argued that changing the tax formula ultimately would cost the state jobs and oil revenue.
The bill would have added $235 million to the state treasury next year.
Its last chance this year is a reconsideration vote, which was expected to be one of the last items on the Senate agenda Monday. Democratic Gov. Steve Cowper made passage of the bill a priority in the 1989 session, which ends Monday night.
"The oil companies won Sunday night," Cowper said. "It's as simple as that. Monday's final vote on this issue will prove one thing: whether the oil industry runs this state or whether the people of Alaska are in charge."
Hugh Motley, vice president of Arco Alaska Inc., said he was pleased with the victory. "It is a bad piece of legislation for Alaskans," he said.
The Exxon Valdez spill, which polluted Prince William Sound with 10.1 million gallons of North Slope crude, gave proponents of the bill new ammunition in the Senate, which has long been a bastion of oil industry support.
Democratic Sen. Al Adams pleaded for passage of the bill, and he cited an industry effort to swing votes against the bill with promises of additional union jobs.
"Who has made these promises?" Adams asked. "Is it the same industry that promised that a Prince William Sound oil spill would never happen? Is it the same industry that promised that they would not kill animals?"
He urged his colleages to think of how the bill's defeat would be seen by fellow Alaskans irate over the spill.