Sunday, January 11, 2015

"BP president disputes governor's claims on oil tax"

That was yesterday's (Saturday) headline in the Alaska Dispatch.

I want to note it here, because under Sean Parnell, the oil companies never had to dispute anything with the governor.

I don't know yet that it means anything substantive, but it's refreshing.

There's been a lot of talk about Public Private Partnerships.  So much so that some people just say P3.

Governments have always bought goods and services from private companies.  Partnerships tend to go further and tend to mix governmental and private sector roles.  Theoretically, this can work out well.  Often though, this can be a ploy for the private sector to acquire government assets at low prices, chanting the mantra of the private sector being more efficient than the public sector, and then raising prices and profiteering from the arrangement.  The privatization of parking meters in Chicago seems to be a good example.

Government has a role to perform those functions that the private sector can't or won't perform.

When two people, two businesses, or a government and a business, decide to go into partnership, both sides need to vigorously guard their interests.  The term 'trust, but verify' has been used in diplomacy a lot lately, but it's also a good term for business relationships.

Unfortunately, corporations have a record of gaining leverage in their government partnerships through their support of candidates in elections.  Throughout the world, including the US, large corporations buy key decision makers who then give away government assets and interests.  I have no doubt that banker Frank Murkowski, as governor, was a willing partner with the oil companies and not a strong, cautious, demanding partner.  For whatever reasons, Sarah Palin was much more adversarial with the oil companies.  But her running mate Pat Parnell had been a Conoco -Philips attorney.  Instead of bargaining for the best deal for the state and people of Alaska, Parnell gave the oil companies what they wanted.  Whether he knew he was doing this or whether he has lived in the oil world so long he believed the narrative, I don't know.

But I do know that when businesses work with each other, it's like playing poker.  Each side wants to get the best deal it can from the other.  There's bluffing, there's careful calculation, there's distraction, and eventually there's an agreement, or not.  The positive spin of the word partnership may be the ideal, but competent government representatives know that the other side is out to get the best deal and if they can do it at the expense of the government they will.  Often, government partnerships happen when the private sector companies aren't willing to take the risk themselves and want the government to cover their losses.  The State of Alaska has a history of funding such risky operations - from dairy deals to barley to fish processing, just to name a few.  It was hard for legislators to say no when money was flooding into Juneau.

So this headline brings a little hope that our new governor is willing to stand up to the private sector.  It's only an early sign.  We have to see what the follow up is.  There will be a lot of pressure by the private sector to play the anti-government card.


  1. Don’t forget the failed Space Port in Kodiak.

  2. Under Parnell, the oil corporations still maintained their adversarial position, they just did it a little more quietly.

    They still contended that they didn't owe what they owed, they still took the state to court trying to get out of previous contracts.

    I think maybe the most substantial lesson to take away from what the BP president attempted, is that his 'disputing' Walker's claim didn't actually disprove Walker's claim at all.

    That BP president just tried to exempt his corporation from the focus.

    I think your headline should read 'BP president fails to dispute Walker's claim. If no one goes into the link to find the truth, they may be misled by your repetition of the misleading headline.

  3. Anon- thanks, another good example.
    Joe Blow - You add nuance that in my hurry I left out. I should have been more careful. Thanks.


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