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Senate passes oil tax bill

Posted: April 14, 2012 - 7:21pm

JUNEAU — The Alaska Senate on Saturday passed a bill intended to encourage new field oil production, just days after an overhaul of Alaska’s oil tax structure stalled in the Senate’s bipartisan majority caucus.

A piece of that overhaul was a tax break for oil production in new fields. On Saturday morning the Senate Finance Committee grafted a version of that from the stalled SB192 onto a House bill intended to encourage more oil and gas drilling in select basins around the state.

The bill, which passed 17-3, must go back to the House, which would have to agree to the changes or the bill would go to a conference committee. House Speaker Mike Chenault said early Saturday afternoon that it would be a large policy call to make with one vote on the floor and no hearings on the changes on the House side. He said the House majority would have to take a look at what it wanted to do.

The House also could just keep the bill in what’s known as the limbo file — and let it die.

The Legislature is scheduled to end Sunday. Unknown yet is whether Gov. Sean Parnell would call lawmakers back into special session to deal with oil taxes. Parnell said earlier this week that he would if the Senate passed an oil tax bill in the Legislature’s last days to give the House time to vet a bill. The bill passed by the Senate late Saturday afternoon looks far different from SB192.

The new version of HB276 represents the Senate’s best stab at oil tax changes in a session in which it delved deeply into the tax issue but wasn’t able to find enough agreement within the bipartisan caucus for more sweeping changes. 

Nonetheless, some senators saw the bill as a big step forward; Sen. Lesil McGuire, R-Anchorage, for example, declared the bill “awesome,” and said she believed it would “create a stampede” of companies coming to Alaska. 

But Sen. Cathy Giessel, R-Anchorage, one of the no votes, said the bill lacked the punch needed to turn around the oil production decline in Alaska. She noted that the Department of Revenue projected no impact on state revenues until fiscal year 2018. She said in 7-10 years, the time it could take for new production to come online, oil throughout in the trans-Alaska pipeline could be half of what it is today.

Also voting no were Sens. Fred Dyson and Charlie Huggins.

An end goal of the oil tax debate is to get more oil in the pipeline. Alaska relies heavily on oil revenues to run. 

Senate Finance Committee co-chair Bert Stedman has said that one of the stumbling blocks among senators has been deciding how to address oil in legacy fields, like Prudhoe Bay and Kuparuk, long the mainstays of Alaska’s oil industry, where production has been declining. 

One of the concerns some senators had was with giving too much money to oil companies, particularly for oil they would have produced anyway. Others felt a tax cut was needed to boost incremental production.

Before the floor debate, Sen. Bill Wielechowski, D-Anchorage, said the Senate moves represent a substantial incentive, and meaningful tax change that will “super-charge” new oil production on the North Slope and bring in more independents — companies in addition to the slope’s current Big Three players.

An analysis by PFC Energy, a consulting firm that’s been working with the Senate on the oil tax issue this session, found that total government take would be around 64-66 percent for new field production at various cost-to-produce scenarios at $120-a-barrel oil. Under the current tax structure, government take at the same price point and scenarios would be 77-78 percent.

The state take, meanwhile, would be 49 percent under the three scenarios at $120-oil under the new-field provision. Under the current tax structure, it would be 65-68 percent.

Parnell’s spokeswoman, Sharon Leighow, said the new version of HB276 “maintains status quo decline for at least 10 years. We can’t afford that. In order to get more oil now, we need to address legacy fields too, as well as new fields in the future.”

Kara Moriarty, executive director of the Alaska Oil and Gas Association, told senators in a memo that the bill is “incomplete,” in part because it “does not provide any relief or incentive for existing or incremental production where almost all of Alaska’s production will come from in the next 5-7 years.”

Sen. Hollis French, D-Anchorage, said the new Senate approach fits with his philosophy: No reduction in oil taxes without more production.

He also questioned why critics would flat-out reject the plan. “Why say no to something that goes part of the distance you want to go?” he said.

Heading into the floor debate, at least nine senators had signed on as cross-sponsors to the earlier version of HB276, from Rep. Steve Thompson, R-Fairbanks. On the floor, Sens. Linda Menard and Dyson asked to have their names dropped, while Sens. Albert Kookesh, Johnny Ellis, French and Wielechowski asked to have their names added.

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MeO
29
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MeO 04/15/12 - 11:37 am
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Parnell’s spokeswoman, Sharon Leighow

Parnell's - puppy dog is a better description.How many folks remember who Parnell worked for after the Exxon Valdez disaster? We should keep the tax where it is at now or raise it higher. It is our oil and we should get our share of the profit while we can. The big boys will either stay or sell out and someone else will produce the oil until it is all gone - period.

radiokenai
556
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radiokenai 04/15/12 - 03:41 pm
1
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If I were spittballing...

Unpublished

I would have to guess that the comment made by MeO is from an unemployed welfare recipient who is afraid of work and loves the obama-mama way of thinking that more Government and more Taxes will solve our problems! YO MeO! WAKE UP! The oil companies have pulled stakes to North Dakota for exploration! Prudhoe IS in decline! Your brilliant deduction of "someone else will buy it out and pump it dry" has about as much thought as you being Baracks puppy dog.

Do you really want Big Oil gone and small Mom and Pop Oil Inc. running the fields? Gee, what happens when they spill or have a catastrophe? Do you really think they have the money and resources to clean things up?

And what about those things you hate so much...JOBS?

You know what, I think we are done here. All I can do is shake my head in total disbelief.

Go ahead, lets run with your bright idea...and let me know how $5.00 at the pump feels! And no coin to buy it?

wow...

oldwolf49
2
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oldwolf49 04/15/12 - 09:23 pm
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Paid

Someone got paid or someones for this to pass the way it did. I agreed lets keep it here, tax it for the people of the state and cut the middlemen (or representatives depending) out of the mix, it is our resource lets get out of it all we can.

Watchman on the Wall
2893
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Watchman on the Wall 04/16/12 - 03:03 pm
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0

Your rulers are rebels, And

Your rulers are rebels, And companions of theives;
Everyone loves a bribe, and chases after rewards.
They do not defend the orphan, Nor does the widow's plea come before them.
Isaiah 1:23 just about covers our local and national government as far as i can see. Please understand that not every politician is discribed above by Gods word, but it is close i do believe and getting worse daily with this new hope & change thing from Obama which looks just like past govt. only worse now.

Jeremiah 6:17

MeO
29
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MeO 04/17/12 - 09:57 am
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"Because without a comprehensive tax change and a comprehensive

Parnell's statement - "Because without a comprehensive tax change and a comprehensive look, we're not taking care of Alaskans now and into the future," he said. Making a "significant" tax change in existing fields could lead to 100,000 new barrels a day in 1 1/2 -2 years, he said. He said it could be almost 10 years for new production from new fields.
Who does he think he is talking to with these kinds of statements anyway - I for one am sick and tired of this puppet who is supposed to be looking out for us not himself. I have no problem with some breaks for incentives to develop new sources of crude but we do not need to fund the mature side of things as the big boys have made their share of profits many times over. They are the ones who have run it till it craters and now that it is cratering they want us to fund the recovery phase to just maintain current production levels. The people of this state should not let them have any more of our money!!!

Watchman on the Wall
2893
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Watchman on the Wall 04/17/12 - 11:29 am
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When politicians think people

When politicians think people are like mushrooms that they can continue to shovel crap on and it will be believed as gospel & afterwards they repeatedly elect people like him and others, what can ya expect from ALL politicians??

As i said this deal will cause OUR pipeline from up north to start flowing at full capacity from OUR drying up oil reserves.

Yet another freebee for "Stripe Mining" Alaska's resourses with Big Money with the advantage over WE ALASKANS.

Jeremiah 6:17

kenai_kid
222
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kenai_kid 04/17/12 - 12:26 pm
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Jerry it's NOT our pipeline

Jerry, the oil is ours. The pipeline, on the other hand, is not. That is wholly owned by the oil companies.

Watchman on the Wall
2893
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Watchman on the Wall 04/18/12 - 11:40 am
0
0

KK How ya doing? Long time no

KK
How ya doing? Long time no hear. Did ya see my post for you on Oil as a political tool? About this oil and pipeline thing
it seems to be the very same situation with the Strip mining of Alaska's minerals from the pebble mine project.
The minerals are are's but a canadian company owns the rights to them, go figure. In both cases Alaskans seem to be about to get the Shaft and others get the gold, either in oil or minerals & gold.

I don't know what we need to do, but, it sure doesn't seem like we are being forced to grab our ankels & that is not the answer in either case so Big money can have their way with us and OUR elected rulers giving them the go ahead blessings is not right either.

Jeremiah 6:17

kenai_kid
222
Points
kenai_kid 04/20/12 - 09:19 am
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0

How much do you know?

I'm just curious Jerry. How much do you actually know about the oil tax bill that was presented to our representatives? Do you know what provisions the oil companies are asking to be changed? Are you aware of how much they are asking us to "give away"? Did you read the text of the bill? Do you even know how many multi-million dollar facilities are located on the north slope? Did you know the oil companies are paying the state for gas used to produce the energy required to harvest the oil? Are you aware of what percentage the state actually garners from the oil companies currently? Are you familiar with the term "lifting cost?"
I sincerely hope I don't offend you with this next statement, but it seems you have no idea what is in the bill or what the current share costs truly reflect. It seems that you go off on an uninformed tangent and have no real facts to back what you claim.
People are correct in claiming the oil is ours. But we carry none of the liability for a spill, a death on the job or for State or Federal over sight. We own none of the facilities or pipelines in whole or in part therefore we need not worry about aging infrastructure that is in constant need of repair.
You have stated oil is an infinite resource, which I happen to disagree with. However, for the sake of argument, if it is in fact renewable, will it renew itself at the rate at which we are consuming it?
I would ask that you use the tools before you (your computer and the internet) to find the answers to these questions before forming an opinion on what should or should not be done in regard to royalties and taxation.
Further more, BP is more an operator of Prudhoe Bay than they are an owner. Their share of the oil profit is minor in comparison to their American counterparts Conoco and Exxon. BP owns less than 26% of the oil rights of Prudhoe Bay.
"The minerals are ours but a Canadian company owns the rights to them." Even though you are again a bit off topic, I'll bite! That is correct! They own the RIGHTS to them as they purchased the leases that were out for bid and purchase by any other company willing to deal with Alaska's government. They have already paid money for something they may never be allowed to extract. They won't get their money back should we decide against development. It is a gamble on their part that they perceived as being worth while.
Alaska has become an entitlement state. We want everything free and we want it paid for by someone else. We've come to believe that the PFD will go on forever and we will never need to pay an income tax or a state sales tax like most of the rest of the country.

Watchman on the Wall
2893
Points
Watchman on the Wall 04/20/12 - 03:04 pm
0
0

KK I don't know much about

KK
I don't know much about anything and only repeat what i hear and believe to be true in reguard to people and evil money hungry power control folks that only have a desire for self.I may be wrong about these actions of our rulers, and hope i am. But it sure seems odd whats going on with this either do as we wish or go out of business. There is no accountability for rulers any longer as they now also control the disaplinary actions for their actions, thus no punishment is handed out and they keep doing what they wish without any regard for our desires as the people that were elected to represent.

I did see that today the false info from our prez about america only having 2% of the worlds oil is false and that we actually have 565 Billion barrels of undiscovered oil, or 26% of the worlds oil according to the US Geological societies report.
I read this on one of the web sites i frequent daily for world news. If ya trust me enough you can read it as well on www.hallindsey.com scroll down & its on the right side along with a few other world stories, but i guess it was on Fox news today as well, i don't hardly watch Fox news or CNN or any of the wannabe news agencies.

All i know is a major shift for world wide power control is at an all time high and economics and food are the two main tools used to control people with religion next and this seems to be exactly what i see going on here in Alaska as well as world wide. A forced shift in obtaining more power & control of comodities needed by everyone to survive is in play here as we see by this weekends meeting by the IMF nations that are helping this clamping down of all things for that OWO that is coming soon on how to deal with the global economic collapse thats spreading like widlfire as we type and will soon ingulf all the world for their desired Union of One.

Have a GR8 weekend.

Jeremiah 6:17

kenai_kid
222
Points
kenai_kid 04/20/12 - 11:31 pm
0
0

Now you know a little more!

If you are going to believe what you hear, you need to hear it correctly. The US doesn't have 565 billion barrels of undiscovered oil. The WORLD has 565 billion barrels of undiscovered oil. Read more below:

"Using a geology-based assessment methodology, the U.S. Geological Survey estimated means of 565 billion barrels of conventional oil and 5,606 trillion cubic feet of undiscovered conventional natural gas in 171 priority geologic provinces of the world, exclusive of the United States."
http://pubs.usgs.gov/fs/2012/3042/

"Undiscovered, technically recoverable resources are more like your long-term future earning potential – they estimate the potential oil and gas resources that might be in the ground, without knowing for certain. The resource assessments of U.S. energy supplies conducted by USGS continue to be encouraging; but undiscovered, technically recoverable resources often take many years, if not decades, to develop."
http://www.doi.gov/news/doinews/Measuring-Americas-Energy-Potential.cfm

From the Fox news and Hal Lindsey stories:

"The U.S. Geological Survey found outside the U.S. there are 565 billion barrels of undiscovered conventional oil.
And an analysis from the Energy Information Administration puts our supply at 198 billion barrels.
That means we have 26% of the world supply."

What that actually means is our 198 billion barrels of proven and undiscovered reserves represents 26% of the UNDISCOVERED reserves of the world ... which in fact represents ... 2% of known and unknown reserves exclusive of our own undiscovered reserves.

There are a 1001 news spinners out there!

Watchman on the Wall
2893
Points
Watchman on the Wall 04/21/12 - 01:43 pm
0
0

KK i still think it's planned control.

Thats why i like these blog thingies, they teach me stuff about many things and about people's ideas and opinions.
I have only been doing this blogging off and on for the last 4yrs so it's still new to me. Greta wire was the first site i blogged on, until TROLLS wrecked it, then i discovered the Clarion had it just this last year. Still learning this puter stuff, if only i could figure out spell check, my wife is comment & attitude checker for me when i don't allow Gods Holy Spirit to do that.
I still think it's a cotrol thingy to manipulate people in a certain direction to tighten the reins of control globally on everything and everyone & that we will never run out of oil.
As we see the economic collapse spreading like wildfire in many nations and America has doubled our national debt from 8 Trillion to almost 16 trillion declaired debt that is the last 3+ years.
This weekend the IMF is meeting & pondering over what to do about it in an effort to further deceive people into thinking it's not a planned out event, this global economic collapse.

Food is next with this global control thingy and a war in the middle east will help drive oil out of reasonable means for many and that will drive food prices and every thing else out of reach, all leading to a dependance on some Unionized Global government to save a select few.

Have a GR8 weekend.

Jeremiah 6:17

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