More oil is the answer to Alaska’s fiscal gap

Wednesday, 15 November 2017, 07:40:41 AM. Two senators' call to raise taxes on oil producers works against more investment and more revenue for state.
There's new math, old math and just plain crazy math, which best describes the latest formula from Sens. Berta Gardner and Tom Begich to close our fiscal gap in part by raising taxes on oil and gas a seventh time in 12 years. While most governments around the world have offered incentives to help energy companies weather low oil prices, Alaska raised its oil taxes in 2006, 2007, 2014, 2016 and 2017 – and now talks about upping them again. To be fair, the Legislature did pass a tax credit incentive package in 2010, which turned a gas shortage in Cook Inlet into a surplus and doubled the area's oil production while also attracting new independents to the North Slope. Changing tax policy every year or two just doesn't add up because it's a destabilizing factor that makes it harder for Alaska to compete for the capital we need to fully develop our assets. Senators Gardner and Begich base their argument on their claim that Alaska is not receiving its "fair share" of the value of our oil and gas. The fact is Alaska has some of the highest oil taxes in the world. The fact is Alaska's share is higher than the producers at every price point. The fact is the state gets paid even when producers are operating at a loss because it still collects royalty, property tax and income tax. Based on the facts, one could argue that's more than fair. [Alaska must honor oil tax credit obligations] Our current oil tax policies are working, balancing Alaska's "fair share" with the needs of the...Read more
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