Alaska plays hardball with oil companies

Some analysts wonder if governor is asking too much as she seeks more revenue for her state in time of soaring energy prices

Alaska Gov. Sarah Palin is challenging some of the world’s biggest oil companies, and like Venezuela President Hugo Chavez, she’s not backing down.

Palin threatened to evict Exxon Mobil Corp., the world’s biggest oil company, and partners BP, Chevron and ConocoPhillips from a state-owned gas field, winning their promise to increase Alaska’s natural gas output 17 percent. She raised taxes on oil profits by $1.5 billion a year and rejected industry ownership of a $25 billion pipeline.


Politicians and energy companies are haggling for revenue with oil more than $100 a barrel. Exxon Mobil and partners say higher taxes may lead to fewer investments in Alaska, home to the second-largest U.S. reserves behind Texas. None has quit the state. Exxon Mobil and ConocoPhillips last year left Venezuela rather than accept lower profits when Chavez seized oil fields.

“We’ve got to play hardball,” Palin, a Republican, says in an interview. Alaska relies on the energy industry for 85 percent of tax revenue and 33 percent of jobs. “The time is right to develop these resources because of the price of fuel.”

Houston Chronicle