Parnell trip to Europe focuses on oil, gas issues

JUNEAU — Gov. Sean Parnell is wrapping up a trip to Europe that focused on gauging the impact of tax changes on oil and gas operations in the North Sea region.

Critics derided the trip as a junket on the heels of the Alaska Legislature’s passage of a controversial oil tax cut that Parnell championed.

The governor’s office said in a release that the trip included meetings with government officials and oil and gas companies in Norway and Scotland. Those meetings “examined the real-world, positive effects that tax changes are having in North Sea operations so Alaskans know better what to expect from new oil field investment under Alaska’s new oil tax regime,” the release stated.

Parnell said the United Kingdom is seeing the results of tax reform — billions of dollars in new investment and job opportunities.

“Like the U.K., we have positioned Alaska for an oil production comeback by making our state more competitive,” he said in the release.

For the past several years, Parnell has pushed for a tax cut on the oil industry as a way to increase production and investment. Alaska relies heavily on oil revenues to run, but production has been on a downward trend since the late 1980s. Higher prices in recent years have helped to mask the impact of the decline on the state budget.

The Legislature recently passed a tax overhaul supported by Parnell. That measure is now the subject of a citizen-led referendum effort.

Sen. Bill Wielechowski, who voted against the tax change, chalked up Parnell’s trip as “propaganda.”

“To go overseas and spend probably tens of thousands of dollars in taxpayer money to try to convince Alaskans that giving away billions of dollars was a good thing, I think’s a waste of time,” Wielechowski, D-Anchorage, told The Associated Press.

A fiscal analysis showed the oil tax overhaul could cost the state between $4.2 billion and $4.6 billion through 2019. That is based on a forecast that calls for a continued net decline in production and oil prices between $109 and $118 a barrel.

The point behind the tax change is to try to increase production.

Parnell said Alaska already has seen encouraging steps toward more production and investment with two recent company announcements. But Bill Walker, who has announced plans to seek the Republican nomination for governor next year, said it’s disingenuous to claim victory when the oil tax overhaul hasn’t even been signed yet. He also said it will be difficult to gauge what projects truly are the result of the expected tax change.

This was Parnell’s third state-sponsored overseas trip as governor. He has previously traveled to parts of Europe, Israel and Asia.

On this trip, Parnell also was to have attended the European Seafood Expo in Brussels, but he postponed the start of his trip to attend the April 20 memorial in Anchorage for the son of Attorney General Michael Geraghty, who died in a traffic accident. Parnell’s office said other state officials and first lady Sandy Parnell represented Alaska at the April 23-25 expo.

Parnell left Alaska on April 22 and is expected back this week, his spokeswoman said.

The governor generally doesn’t disclose his travel plans in advance for security concerns.

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