Reducing oil taxes simply in the hope that it will bring more exploration and development is outright irresponsible.
Alaska’s constitution states: “The legislature shall provide for the utilization, development, and conservation of all natural resources belonging to the State ... for the maximum benefit of its people.”
Unilateral tax reduction will guarantee only that maximum benefit will go to major oil companies. Rather than a giveaway of billions with only hoped-for benefits, we must create specific incentives to promote oil and gas development in Alaska.
Whatever adjustment in the oil tax structure is called for should be done through expanded tax credits that reimburse oil companies for investments they actually make to find new oil in Alaska and increase the amount flowing through the pipeline. The legislature can also take other steps to assist companies that explore for oil and gas, something the three majors don’t do.
In sum — the legislature should focus on achieving benefits for Alaska, rather than hopefully throwing money into the wind.