Rising gasoline prices are giving Gov. Sean Parnell a new argument to make in favor of the oil tax reduction he’s pushing.
Parnell on Thursday said passing House Bill 110, currently stalled in the Legislature would boost oil production enough to reduce gasoline prices.
“If we can get more oil production in the line, if we can get more supply, that helps reduce the cost,” Parnell said.
Parnell has said he wants billions of dollars in oil tax reductions, which he hopes will provide an incentive to the state’s oil companies to produce dwindling supplies of oil at a faster rate.
He’s also proposed a suspension of the state’s gasoline tax, currently 8 cents a gallon, the lowest in the nation.
Parnell didn’t say whether he believed oil refiners would sell gasoline to Alaskans at below market prices, or whether additional Alaska production would drive down world oil prices.
Alaska currently produces about 600,000 of the 8.2 million barrels of petroleum products produced per day in the United States, according to the federal Energy Information Administration. Parnell has set a goal for the state of boosting production to 1 million barrels per day.
Parnell also recently began a renewed effort at passing a gas tax suspension, which he introduced in January of 2011 but which has not moved in the Legislature.
Representatives of the House and Senate Transportation committees, both of which have versions of the tax suspension bills, say they’ve recently gotten requests to hold hearings on the governor’s bills. That’s likely to happen in two weeks, they say.
Rep. Peggy Wilson, R-Wrangell, chairwoman of the House Transportation Committee, said she doubted the bill had a chance of passage in either chamber, but that she’ll hold the requested hearing.
When the governor’s gas tax bills were first introduced, top legislators said suspending the gas tax could hurt the state’s ability to get federal transportation money.
Wilson said suspending the tax could give other states “ammunition” to argue against the large share of federal transportation dollars that go to Alaska.
“It shows people in Washington that we’re not willing to pony up and pay our fair share,” she said.
While it would be good to be able to give Alaskans a tax break, she said doing so “might be cutting off our nose to spite our face.”
• Contact reporter Pat Forgey at 523-2250 or at firstname.lastname@example.org.