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. 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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A recent commentary piece in the Fairbanks Daily News Miner by 4 well known Alaskans explains why they still support SB 21 10 years later.
Read here. keepalaskacompetitive.com/ten-years-later-we-still-support-alaskas-oil-tax-system/
Let’s set the record straight about what SB 21 did — and didn’t do. Click here to listen.
Here’s something to keep an eye on.
Bradner’s Economic Report says transportation companies and oil and gas industry groups are forming a coalition to press for more state funding for the Dalton Highway, the strategic state-owned road linking North Slope oil fields with Interior Alaska’s highway system. Maintenance has lagged on the Dalton, truckers and industry groups say. The road has seen heavy use this year with major new oil projects under construction on the slope and the traffic will continue through 2025 and likely beyond.
The Dalton will become even more important in January when the Interior Gas Utility of Fairbanks begins trucking liquefied natural gas from the Harvest Alaska LNG plant nearing completion at Prudhoe Bay, eteran industry reporter Tim Bradner says IGU plans six LNG trucks a day going south with six returning north daily, a total of 12 on the Dalton. If Fort Wainright, the Army installation in Fairbanks, goes ahead with a plan to switch to natural gas, this would eventually double the LNG demand and trucks on the road.
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.