24 September 2008

"Petropolitics" in Palin's Alaska

The newest issue of The Nation has an interesting commentary by Michael Klare on Governor Palin's ambiguous relationship with Alaska's oil industry. Klare credits Palin with "some commendable efforts to dilute her party's ties to Big Oil" and with raising taxes on oil and gas producers. A law she supported sets a profit threshhold above which the companies must pay a "progressive surcharge" -- 0.4 percent for every dollar of net profit over $30. The oil companies can get much of this back through tax credits earned through investments in infrastructure and further exploration.

This doesn't sound bad at all, nor does the fact that Alaska can do without an income tax thanks to oil-tax revenues. Klare suggests, however, that Alaska's situation is so exceptional that it unsuits Palin for national office. "Palin is simply unqualified to deal with the demanding economic realities of any nation that it is not a petrostate," he asserts. He equates Alaska with some Arab emirates, these being states that subsist on revenues from oil and thus become susceptible to political corruption. This is "because of the close ties that naturally develop between government officials and energy executives" and because citizens freed from income taxes tend to scrutinize politicians less closely. Such states also tend to resist the development of alternative resources, being skeptical of their ability to generate comparable revenue for the state. Palin is on record questioning incentives for developing new resources while oil is still available.

"Surely, at this moment in history -- with global oil output facing imminent decline and global warming an inescapable reality -- anyone opposed to government support of renewable energy should be considered stupendously ill equipped for national office," Klare concludes. This is probably true if we leave the debate at this point. It should be possible, though, to split the difference. If Palin's interest is in generating revenue for the state from energy producers, and she's willing to offer incentives to get producers started, why couldn't she advise a theoretical President McCain to emulate Alaska's arrangements with the oil industry on a national scale for the development of alternative resources? McCain is as confident as Obama that a national conversion to alternatives will create millions of jobs and stimulate the entire economy. If so, why can't this new sector become a major source of revenue to the federal government, or the individual states? One reason she wouldn't make such an argument, Klare suggests, is that Palin wants Alaska to benefit from the nation's dependence on oil. Would she feel the same way, however, were she no longer directly responsible to her state? More to the point, would McCain ever feel that way? It'll be his decision to make, unless you think he'll owe Palin so much for helping him win that he has to give her real power, so he might want to use his hiatus from campaigning to studying the Alaska situation more closely.

1 comment:

crhymethinc said...

Keep in mind also that Alaska has among the lowest population in the country. Other low-population states tend to have lower (or no) state income tax as well. Also, much of Alaska's population are Eskimo or Inuit or other natives who are used to living with little or no infrastructure, etc. If Alaska's population were equal in number and demographics to, say New York, they would definitely need an income (or other) tax to pay for it.