Sen. Kevin Meyer on citizen legislators

Anchorage Republican, who works for ConocoPhillips when he’s not in Juneau, says scrutiny at new heights in this year’s session

Steve Quinn

For Petroleum News

One day after the Legislature adjourned, Sen. Kevin Meyer was on a plane to Anchorage where his other job awaited him: that as ConocoPhillips employee who sells and distributes surplus goods.

His work with ConocoPhillips has been no secret and routinely prompted him to declare a potential conflict of interest during floor votes in each of his 13 years in office, first with the House and now with the Senate.

He said he’s accustomed to scrutiny that comes with holding down both jobs, but it reached new heights during the most recent of what seems to be on-going oil tax debates that dates to 2006.

This time it was for his role as co-chairman of the Senate Finance Committee, the third of three Senate committees to review SB21, the oil tax reform bill.

The Anchorage Republican has been around for tax changes in the 2006 Petroleum Production Tax debate and the 2007 Alaska’s Clear and Equitable Share discussion.

He served in the House then, before moving to the Senate in time for a reprised bill, which failed last session.

That changed this year when the Legislature passed Senate Bill 21 amid the criticism of Meyer and Sen. Pete Micciche, another Conoco Phillips employee, overseeing committee’s hearing the bill.

Meyer spoke of the scrutiny and of the Legislature’s resource development accomplishments with Petroleum News one week after session ended.

Petroleum News: You’ve said that you’re received more pushback and criticism for your work with ConocoPhillips conflicting with your work as a legislator and co-chairman of the Finance Committee. What do you believe that’s happened?

Meyer: I’m not sure. If you recall we were dealing with oil taxes last year. I don’t think the issue came up once that I have a conflict of interest because I’ve worked at Conoco Phillips. I don’t recall any reporters reporting on it. I certainly didn’t get any emails or phone calls like I am this year. In fact the same groups that are upset with me are groups that endorsed me and supported me during the campaign last year, the Backbone group. They were running media ads with Bettye Davis and (Bill) Wielechowski, saying these guys are part of a bipartisan coalition. We support them. Six months later they are saying, “he’s got a conflict. He’s got the oil tax all wrong.”

I’m not sure what changed in the last six months other than the politics. That is what I think this is all about. Last year I was part of a bipartisan coalition led by Democrats. This year I’m part of a bipartisan coalition that’s led by Republicans. When you are dealing with such a critical issue to our budget and the overall health and wealth to our state, then we’ve got to take the emotion and the politics out of it and just look at the facts.

This year we had three different consultants and one of them, PFC Energy, was the same consultant we had under the bipartisan coalition last year. Everybody seemed to respect them and like them. It’s the same consultant advising us this year that we are just not competitive. We have to adjust our oil tax structure to become competitive. I still don’t know if what we ended up with is going to be enough, but it’s certainly a lot better than what it was under ACES.

Meyer: When we were doing PPT in 2006 and ACES the next year, I chaired the House Finance Committee. One difference was Mike Chenault was the other co-chair and I turned the gavel over to him. I offered to turn it over to (Sen.) Pete Kelly and his response was you know a lot more about oil and gas than I do, so you go ahead and chair it. So I did. As you recall, once it got on the floor — and it’s really the floor vote that’s binding, the one that really counts — you’ll notice it was Sen. Fairclough that led the debate on oil taxes. It wasn’t me.

I spoke to Mike Bradner who was speaker of the House back in the 1970s, and I asked him have you always dealt with conflict of interest this way: standing up and if somebody objects you have to vote. Mike Bradner, who was a Democrat and in the 70s it was pretty much a Democratic majority, he said they felt strongly that this way was the best way to do it. What was happening was people would ask to be excused saying they had a conflict and in reality they were trying to avoid a difficult vote. Both Republicans and Democrats want everybody on record.

The current system we have in place has been around for a long time. It’s always a difficult issue. I know when I was on the Anchorage assembly we would stand up and declare our potential conflict of interest. Our colleagues would vote on it and it became very political. A person either thought, “well, he’s on my side, so I’m going to say he doesn’t have a conflict,” or if someone thinks, “he’s going to vote this way and I don’t want him to vote, so I’ll say he has a conflict.” So there is not a good way to deal with conflict of interest. As a citizen Legislature, everybody is going to have conflicts. I think the way we deal with it is the best. You stand up, you declare it and then you vote. It’s up to your constituents to decide whether or not they like how you voted or didn’t vote. I’ve been in the Legislature 13 years and eight years on the Assembly before and people know my voting pattern and where I stand on various issues.

When I run for office, I always tell people where I work. To disenfranchise them and not let them have a voice down in Juneau would be unfair to 35,000 people. Now if you do the same thing to Sen. Micciche, now you’re talking about 70,000 people. That would be like saying Fairbanks you’re not going to have a say on oil taxes or Southeast, Alaska, you’re not going to have a say. So, 70,000 people is an awful lot.

The oil industry is the main industry in Alaska and employs a lot of people.

The culture at ARCO, then ConocoPhillips, is to encourage employees to give back to the community and the state we work in. You’re going to have folks who ultimately get involved in boards and commissions and eventually asked to run for office. I’m frankly surprised there are not more folks who work for the oil industry who are in elected positions. I think there isn’t because they don’t want to have to put up with the negative comments.

You know Sen. Micciche and I, we didn’t decide one day we are going to run for office so we could vote on oil taxes.

Petroleum News: You had this prospective conflict reviewed several years ago, right?

Meyer: In 2008, I asked our ethics committee to make a ruling on the conflict of interest or not because some years it’s not an issue and other years it is. If somebody tells me it’s wrong, I won’t do it any more. I know (former Fairbanks House Rep. and hotel owner) Jay Ramras asked the ethics committee about a conflict in tourism. And they did say he had a clear conflict of interest. This committee is made up of public members although there are members from the Legislature as well (one each from House and Senate majority, plus alternative). They ruled that I don’t have a conflict. I don’t gain personally and financially from this. It is not something that benefits just me. It benefits a lot of people. In fact, you could say it benefits the whole state. So I did not have a conflict of interest. That’s why I feel pretty comfortable knowing here are public members of the ethics committee saying that. I’ve always been clear about it and open about it. I know it’s tough for some folks, but with a citizen Legislature, you’re going to have fishermen voting on fishery issues; you’re going to have union members voting on union issues; you’re going to have people in the insurance industry voting on those issues.

Petroleum News: Did you receive any bonus from Conoco Phillips for supporting oil tax reform?

Meyer: Absolutely not. I’m a regular employee who takes a leave of absence to do community service. Then I come back and I have to apply for my job back. I go from being a state senator in Juneau for three to four months. Then I come back to being another Conoco Phillips employee who answers his own phone, answers his own email, writes his own letters, someone who gets his own coffee.

My background is business. A lot of the employees are engineering and geologists, but there are a few business guys and I’m one of those. Most of my career has been on the procurement side or buying side of things. It seems to work better with my colleagues and the company to be in the selling and surplus mode.

This way they are not dependent on me as they are as a buyer. When they put in a request, they need a response quickly and need to get an item to the slope quickly. To have my colleagues cover for me, that puts more pressure on them. This works better for me. They put the items on the side and I take care of it when I come back from Juneau. I have a pretty good idea what they are worth because I spent several years buying them.

Petroleum News: Back in Juneau, what do you think the Legislature accomplished this session on the resource development front?

Meyer: I think this year’s was probably the most productive year in the 13 years I’ve been in the Legislature and years before that when I was watching what was going on in Juneau. To me this was a real trifecta. Not only did we get oil tax reform, something that will make us competitive on a global basis, we dealt with in-state gas A and B.

A was the quick fix, the Band-Aid, if you will, by doing the trucking to Fairbanks of LNG, then B — progressing forward on a more long-term solution, that being the in-state gas line.

Third, which is not resource oriented but resources are 90 percent of our budget, coming up with a lean, responsible operating and capital budget. All three of our major goals were accomplished.

Petroleum News: What do you believe you accomplished with SB 21? It wasn’t a slam dunk as far as the final passage votes either with the Senate or House.

Meyer: I think the fact that the vote was close is a good thing. It tells me we found equilibrium; we found the sweet spot. We made adjustments to become more competitive. It means we get less revenue coming in, but hopefully we’ll get more production so the revenue that we lose we’ll make up.

At the same time, we are maximizing the revenue we will receive. To me a close vote doesn’t concern me. If it was a vote of 40-0 and 20-0, that would concern me a lot more, especially on an issue like oil tax reform. Probably my biggest concern with what we finally got passed — and as you know each committee adjusted it a little bit — in my committee the overall government take was 64 percent for legacy fields and 60 or 61 percent for the new oil.

That is the thing that concerns me the most. I’m afraid what you might see is the investment might go to the new oil because of the lower tax rate and not as much to the legacy fields because the bulk of the oil is in the legacy fields. The easy stuff in the legacy fields has been done. Now it’s the more difficult, the heavy oil or the oil trapped within the various stratigraphic rock and I’m a little concerned the investment dollars outside the legacy fields and we’ll miss out on a big chunk of oil that’s within the legacy fields. It’s still a lot better than ACES and the big steep progressivity curve that takes away incentive to invest because there is no upside for you.

Petroleum News: You’ve addressed two in-state gas issues: LNG for Fairbanks and the in-state gas line with House Bill 4. Do you still want to keep an eye on a prospective prize for a large-diameter line?

Meyer: I do. I’m hoping that ultimately the plan the governor is working on with the producers will marry up with HB 4. I think HB 4 is going to push that process along a little quicker. If it doesn’t work that the two marry up, we will still have the smaller line. We’ve waited for 30 some years for the big line to get built and it hasn’t been built. We need the gas for our own in-state needs. I think it’s good that we are going forward with HB 4. Hopefully it marries up with what the producers have planned so they take it over and build it.

Petroleum News: One of the concerns with HB 4, and it didn’t play out as much, if you look at the votes, was the Alaska Gasline Development Corp. being a standalone operation and having more distance between AGDC and the Legislature. What are your thoughts on AGDC having that kind of latitude moving ahead?

Meyer: I think you have to do this. Unfortunately — or maybe fortunately — the Legislature, we only meet once a year for 90 days. If you have to keep coming back to the Legislature for approval, that slows down the whole process. As you know we already have a shortage of natural gas in Southcentral, here in Anchorage and on the Kenai Peninsula. I think it’s fine. They need to be able to move and move quickly.