Palin not only wants a greater share of what's left for state coffers, but has also told oil companies they must develop the leases they have or give them up -- a challenge to producers who may have been waiting for marginal oil and gas fields to become economical before investing millions more in them.
Last month, the Palin administration revoked 13 ExxonMobil leases on the North Slope project known as Point Thomson, a field believed to hold up to 7 trillion cubic feet of gas, or about a quarter of the North Slope's known reserves.
Palin's administration has also squared into an epic standoff with North Slope producers over a proposed $30-billion, 1,700-mile pipeline that would for the first time allow gas to be transported to markets in the Lower 48.
ExxonMobil, BP and ConocoPhillips own rights to most of the gas on the North Slope, and have sought long-term tax guarantees before signing on to build the transit facility, which would be the largest private enterprise project in North American history.
Palin's negotiators have offered only medium-term tax promises and do not want the gas producers holding monopoly control over the facility.
The dispute came to a showdown in the Legislature last month, when Palin succeeded in offering the license -- accompanied by a state subsidy of $500 million -- to Canada-based Trans-Canada Corp. She cut the North Slope producers out of the loop.
But in a stunning war of nerves, ConocoPhillips and BP have launched a private pipeline project of their own, announcing they will spend $600 million to begin construction within five years.
"We're trying to break this logjam and move the project forward," said Bud Fackrell, president of Denali, the company formed to build the pipeline.
The Republican governor's hard line on the oil companies has stirred concern among energy executives across the country. In Washington, energy lobbyists have prepared reports on Palin's record.
Her pro-drilling stance "reminds me a lot of Dick Cheney," said Scott Segal, a prominent D.C. energy lobbyist. But her policy of taxing windfall energy profits is disconcerting, he said. "That approach is anathema to oilmen."