Legislation gets Alaska a fair return for its oil, targets more oil production
FOR IMMEDIATE RELEASE
February 24, 2014
JUNEAU – Today, Representative Les Gara, Senator Bill Wielechowski, and Senate Democratic Leader Hollis French (all D-Anchorage) introduced a fair share oil tax proposal. The legislation would get a fair return for Alaska’s oil resources, target incentives directly to new oil production, re-instate incentives for companies to invest in Alaska, and create new, non-tax initiatives to encourage new oil production.
“The SB21 Giveaway is not working,” said French, “So we’re letting Alaskans know there’s a better way than the giveaway.”
The legislation would repeal the changes made in last year’s oil tax changes (SB21), and re-instate provisions designed to help new companies explore and invest in Alaska and to ensure Alaskans receive a fair share of oil profits when prices rise.
“The governor’s giveaway is a pathway to poverty,” said Gara. “He throws two billion dollars out of an airplane and hopes it lands in the piggy bank. Our bill makes sure Alaska’s oil money goes into Alaska’s piggy bank, and that for every dollar we give back to the industry, we get more oil production in return.”
Because history has shown that simply lowering Alaska’s share of oil profits does not spur increased production, the Democratic legislators proposal also includes a number of non-tax mechanisms to increase oil production. The bill included provisions to allow the state to take an equity interest in new fields to help small companies overcome the costs of getting from exploration to production. It also includes provisions to drive technical advances necessary to unlock the roughly two billion barrels of recoverable heavy oil on the North Slope and to help companies build the processing facilities required to get oil from the well into the Trans-Alaska Pipeline System.
“We know just giving away our fair share like the governor did in SB21 doesn’t spark more production. History shows it, and his own numbers show it,” said Wielechowski. “That’s why we’re offering other ways outside of the tax code to get more oil in the pipeline without having to sell Alaskans short.”
The House legislation (HB338) was referred to the Resources, Labor and Commerce, and Finance committees.
The Senate delayed introduction of new legislation until later Monday. Wielechowski’s bill is identical to HB338 and will receive a bill number and committee referrals once the Senate reconvenes.