"I'm a Democrat. She's a Republican. But she and I have a larger alliance with each other than we do with our own parties," said Ray Metcalfe, a former state legislator who has long complained about corruption. "We have a Republican governor who is not part of the system, and she has set out to reform the party."
Palin's independent approach to politics recalls the kind of Republicanism championed, at least rhetorically, by another maverick: McCain.
"She came into office with a single focus, and that was to undo everything the previous governor had done, and to do as much as she could to prevent Alaska's oil producers from having any participation in any development of an Alaska natural gas line," said Republican state Rep. Mike Hawker, who chairs the state House budget committee.
At least 40 Republicans were opposed to the enormous oil production tax increase crafted in the Legislature, he said, but Palin "cut a deal with the Democratic caucus."
"She rode the tide of vindictive populism against the oil and gas industry in this state," he said.
The connections between oil and power go back to the earliest days of Alaskan statehood. Four of the 10 largest oil fields in North America are on the North Slope, contributing an estimated $5 billion to the state's economy, according to the Alaska Oil and Gas Assn.
Palin is a strong supporter of expanding drilling across the North Slope and in some other environmentally sensitive regions. Unlike McCain, she favors opening the Arctic National Wildlife Refuge to oil production.
But her hard line on expanding state control has flummoxed oil executives. They have warned that the higher taxes will discourage investment in oil production at a time when Alaska must compete with other fields around the world for oil capital.
"The governor pushed for an increase in taxes and the Legislature went along. That was totally their right to do so, but we were pretty clear going in what the long-term consequences would be," said Steve Rinehart, spokesman for BP Exploration.
He said the company has decided to place one of its North Slope projects on hold as a result of the tax increase.
"It was a bread-and-butter oil field development, and a billion dollars' worth of work. We decided it doesn't make sense in the current tax environment," Rinehart said.
The showdown comes at a crucial time, when oil flows from the North Slope down the Trans-Alaskan Pipeline are barely half what they were at their peak in 1988.
