Marathon Oil executive says better incentives needed

Posted: Friday, October 18, 2002

KENAI (AP) -- A Marathon Oil executive says oil and gas companies could use better incentives to continue work in Alaska.

Work in the state exposes companies to higher taxes in a higher cost environment and the work currently going on in the Cook Inlet region is higher risk, Ben Schoffman, Ninilchik project manager for the company, said to the Kenai Chamber of Commerce Wednesday.

''The pearls have already been found,'' he said.

''We're hunting around trying to find things. We're looking at projects that have been considered too risky in the past.''

But though the Legislature has turned down requests for a tax incentive for companies undertaking high-risk exploration projects, Schoffman said Marathon Oil will continue to be committed to projects in the Cook Inlet area.

''Does the Cook Inlet market have everything that is required for a good recipe? No,'' he said.

But, he added, that doesn't mean Marathon Oil will go away.

''We want to do what we came here to do,'' he said.

There is room in Alaska for environmental protection, a quality way of life and rewarding industry opportunities, he said, asking the audience to get involved and make their concerns about the future of the gas industry known to the government, the Peninsula Clarion reported.

Outlining his ''Cook Inlet Recipe for Success,'' Schoffman said Alaska offers resource opportunity, access to land and a market for gas.

But, he said, the state comes up short in terms of offering a reasonable permitting environment and investment incentive.

The current permitting process in Alaska requires a minimum of six to eight clearances, which is two to three times more than is required in the Lower 48, he said.

''We don't want to cause damage,'' he said. ''That costs money. It's not profitable to make mistakes.''

However, he said, it is almost impossible to meet every regulation at this point, because they are not consistent.

''There are numerous stakeholders with redundant, or even worse, contradictory requirements,'' he said. ''A common sense understanding of the issues is critical.''

He also said that there needs to be more responsibility on the part of regulators, so that jurisdiction is clear.

Kenai Mayor John Williams added to the thought, saying that the Alaska Conference of Mayors recently asked the Alaska Municipal League to begin a thorough review of the permitting process to make it less cumbersome.

He said that he believes a constitutional amendment is needed to create an elected position for a ''regulations guru.'' Such a position could oversee permitting regulations and veto those that are redundant, are against the spirit of the law or don't make sense.

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