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REPRESENTATIVE SCOTT KAWASAKI
January 9, 2012
Kawasaki introduces legislation to lower energy costs with state royalty oil and gas Bill would prioritize the sale of royalty oil to be used in state
JUNEAU – Representative Scott Kawasaki (D-Fairbanks) pre-filed legislation (HB 38) to help lower in-state energy costs by giving priority to the sale of Alaska royalty oil and gas to be used for in-state energy production.
"Alaskans suffer from some of the highest oil and gas costs in the nation,” said Representative Kawasaki. “The state of Alaska has the unique opportunity to use local resources to meet local energy demand. Selling our royalty oil in-kind to refiners can bring benefits to all Alaskans.”
Currently, Alaskans pay on average $3.50 per gallon for gasoline and over $4.00 for heating fuel. Kawasaki’s legislation would lower those costs by encouraging refiners to refine and sell oil products in Alaska. The proposal would create a preference list of refiners based on their willingness and ability to sell products in state, and those at the top of the list would get the first opportunity to purchase Alaska's royalty oil and gas.
According to AS 38.06 the state can receive royalty oil in either in-value or in-kind. If the state receives its royalty oil in-value, the royalty oil is sold along with the producer’s oil and the state receives payment for the oil. If the state takes the royalty oil in kind, it assumes possession of the oil and sells the oil itself through a competitive process. The bill would require the Commissioner of the Department of Natural Resources to consider the amount of royalty oil or gas that will be consumed in the state and how the consumption affects the benefit to Alaskans as he evaluates bids for Alaska's royalty oil and gas.
In addition, the Alaska Royalty Oil and Gas Development Advisory Board will be required to recommend the sale of royalty oil and gas that encourages the in-state use of refined oil products and recommend to the Commissioner a preference list for the sale to bidders offering in state consumption.
Kawasaki notes, “The time for serious action and new approaches to our energy crisis is now. We have an opportunity and responsibility with the new legislative session to offer real energy relief to the hard working families of Alaska.”
If you have additional questions, please contact Jessie Peterson at 907-456-7423.
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