Cook Inlet industry threatened

John Zager, manager of Chevron’s Alaska assets, told the House Finance Committee March 29 that Chevron would like to see Cook Inlet carved out of the proposed state production profits tax legislation entirely. (See related story this issue on page B1.)

He said the bill as originally presented was “a difficult pill to swallow” but industry said it could live with it.

The House Resources Committee Substitute, he said, poses problems, especially progressivity. If progressivity is included in a final bill, Zager said, it needs to include an inflation factor.

He said the way he sees the debate going is between a “get-it-now” group which wants a larger windfall now because they aren’t sure investment will grow in the future and the “grow the pie group.”

The early industry support for a $1 billion a year tax increase was “astounding,” Zager said, but now with the changes in the House Resources CS, companies are coming forward to say they can’t live with it. “That’s where we are,” he said, and advocated pulling back as closely as possible to the governor’s original proposal. Legislators will have to decide, he said, on the sincerity of those who say the CS proposes a tax rate too high to draw investment.

“Grow the pie — that’s the camp we’re in,” Zager said.

—Kristen Nelson