Regulatory and fiscal stability are key
to vibrant resource industry
It’s a new day on the North Slope despite the challenges that come with operating in the Arctic – high costs, harsh weather, supply chain issues, legal hurdles and struggles to find adequate financing.
For the first time in a long time North Slope production is projected to remain stable in the near term and increase in the late 2020s. This is excellent news for Alaska. Resource industries, particularly oil and gas, form the backbone of our economy. They are labor intensive, pay some of the best wages in the state and require continued capital investment to maintain or expand production levels. Production is key to jobs and revenue for Alaska.
We cannot control many of the challenges Arctic operations bring, but we can maintain stable tax policies that attract the capital needed to keep our resource industries healthy so they can produce jobs and revenues for Alaskans.
What’s at stake
$3.1B
State & Local Revenue
FY19
77,600
Alaskan Jobs Supported
Direct/Indirect
$549M
Grow the Permanent Fund
FY22 Dedicated Revenues to Corpus
$4.4B
Spending with Local Businesses
Annual
Source: “The Role of the Oil and Gas Industry in Alaska’s Economy,” January 2020, McKinley Research
Letter from the co-chairs
Fair and Competitive oil taxes are working
There is a resurgence in oil production and jobs in Alaska that is directly related to our current oil tax policy. SB 21, a fair and competitive tax policy, replaced the antiquated ACES tax structure that drove down petroleum investment for more than a decade. Thanks to SB 21, Alaskans have the greatest opportunity of our generation on the North Slope today.
Some present and former legislators argue that SB 21 was a mistake, but the facts speak for themselves.
The Willow and Pikka projects, years in the making, are in active development, with Pikka now expecting first production by the end of the year. These and other robust investments in Alaska’s future would not have occurred under the previous punitive tax regime. Between the Willow and Pikka projects alone, the oil and gas industry is spending over $10 billion in Alaska in the next few years, with each project generating 2,500 construction jobs and hundreds of operating jobs.
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Fifty-seven years after the first discovery well was drilled, Prudhoe Bay is on track for a new pad to tap new production.
Originally estimated to contain 25 billion barrels of oil in place, with about 13 billion barrels considered recoverable, the field has produced around 10 billion barrels, with billions more still in the ground.
Hilcorp North Slope, operator of the giant field, is seeking authorization to build yet another oil and gas production pad to use extended reach drilling to access undeveloped oil reserves in the Schrader Bluff reservoir. The company says it wants to drill approximately 60 new wells, including 27 production wells, 27 injection wells, four water wells, and two disposal wells, according to Petroleum News.
The Schrader Bluff formation is estimated to contain approximately 2 billion barrels of oil, but it’s s located in shallow, unconsolidated sands and is considered heavy and viscous, presenting technical and commercial challenges for production.
Omega Pad is west of L Pad, currently the most western Prudhoe Bay pad, 23 miles northwest of the Deadhorse Airport.
Ice road construction and mining operations are anticipated to begin in December. Pad and access road construction would begin in January 2026 and be complete by April 2026.
Pipeline construction is anticipated to occur over the following winter ice road season, from February 2027 to April 2027. The pad is anticipated to be operational in December 2027.
More here: www.petroleumnews.com/pnads/558601727.shtml.
Once again, North Slope construction drove July’s statewide job count up by 2,800, or 0.8%, from July 2024.
Construction added 900 jobs over the year, benefiting from North Slope oil work, primarily at Willow and Pikka, as well as federally funded infrastructure projects, the state reports. Those projects also spurred growth in transportation, warehousing, and utilities (500) and professional and business services (400). Oil and gas added 500 jobs.
Most industries grew, but employment declined over the year in information (-400), retail (-100), wholesale (-100), and financial activities (-100).
State government employment was flat over the year. Local government increased by 100 jobs and federal government decreased by 200. Alaska’s seasonally adjusted unemployment rate was 4.8%, and the U.S rate was 4.2%. Full report here: labor.alaska.gov/news/2025/news25-15.htm
This summer, ExxonMobil celebrates its 100th year in Alaska, which began when it drilled its first well at Yakataga Beach. Since then, the company has explored throughout Alaska, including Cook Inlet, the Alaska Peninsula, St. George Basin, Norton Sound, Navarin Basin, Yukon Flats, Beaufort Sea, and the North Slope.
ExxonMobil remains the largest working interest owner at Prudhoe Bay, and has stakes in Pt. Thomson and the Kuparuk Unit, and is a co-venturer in the Trans Alaska Pipeline System.
Its Alaska legacy began the summer of 1925 when a crew from General Petroleum Co. – now part of ExxonMobil – set off to drill a wildcat well north of Yakutat. The well, Sullivan No. 1, became a 2,005-foot dry hole and the basis of many tall tales that became taller with the passage of time.
“Two years of the hardest drilling imaginable resulted in failure,” recalled Jack Samuelson in a 1958 interview.
Just getting to the well site was an adventure of its own as the route took them through Icy Bay, which has stopped more than one mariner. Here is Samuelson’s story:
“At Yakutat, 120 miles north of Juneau, we departed from the comforts of a modern steamer in exchange for the halibut boat Sunwing. This was a 50-foot gas boat, which was purchased because chartered boats refused to tackle the ice. She proved to be one of the best buckers that could be found anywhere.
“Under a chilly moon and a freezing wind, the party left Yakutat, headed for Icy Bay, a very appropriate name for the place. After a night of bad weather and every man willing to contribute his part to the feeding of the fish, morning found us heading into a bay completely covered with icebergs, little ones and others bigger than skyscrapers.
“This was in the first part of May and we were locked out by the ice, with the only hope that a westerly wind and an outgoing tide would scatter the ice so that a few leads could be found where the strong little craft and the scow she was towing would be able to wiggle into Mud Bay to unload the freight and men.”
Finally, after six days, the wind shifted and the Sunwing set sail. “We started into the ice, bucking, squeezing, and squeaking, making very slow progress, sometimes heading for our destination and sometimes heading in the opposite direction, trying to avoid some big icebergs we knew had the best of us.
“The crew, ready with pike poles and axes, hacked and chopped at the imprisoning mass to cut a channel through to the landing place. The men chopped madly. The boat was forced to its limit.”
The boat finally landed in Mud Bay with the crew, tractors, and oil field equipment intact. Then the real fun began as the crew moved the equipment to the drill site. “Rivers had to be forded; miles and miles were traveled without roads or bridges.
“The little boat was sent back to Yakutat with its crew to fight the same ice and storms trip after trip until hundreds of tons of equipment needed for the exploration were landed on the beach.”
Despite the hardships and danger, the crew grew to love the site, calling it “a place where wonderful things happen and where men are men and hardships are taken with a smile.”
The crew went on to drill other dry holes but never gave up – which is why ExxonMobil remains a major player in Alaska’s oil and gas sector for 100 years.
The mission of KEEP Alaska Competitive is to promote and preserve competitive, fair and stable taxes on Alaska’s resource industries to enhance investment, jobs and production to secure Alaska’s long term economic future.
Keep Alaska Competitive Coalition Board of Directors:
- Jim Jansen, Lynden, Inc.
- Joe Schierhorn, Northrim Bank
- Bill Corbus
- Aaron Schutt, Doyon, Lmtd.
- Dave Karp, Saltchuk
- Gary Dixon, Alaska Teamsters Union
- Vic Angoco, Matson
- Harry McDonald
- Jon Cook
- Elizabeth Stevens, Executive Director