The release of the state’s Fall 2013 Revenue Forecast Wednesday prompted quick interpretations from both sides of the More Alaska Production Act and oil tax debate.
Sen. Cathy Giessel, R-Anchorage, pointed to a projected $10 billion increase in companies’ investment in Alaska oil production as a sign of the hotly contested SB21 beginning to stem the decline of oil production on the North Slope over the long-term.
“With that increase in investment, we’ll get some of the newer fields open,” Giessel said. “We may never reach the 2.1 million barrels we had at our peak, but we can certainly level out this decline and keep the flow going.”
The Alaska Oil and Gas Association issued a statement shortly after the Department of Revenue released its forecast and the source book Wednesday afternoon that also praised the state’s new oil tax system.
The statement called the data a “clear sign that the new oil tax system is already working — only eight months after its passage.”
“These investments are remarkable, especially when prices are forecasted to go down and the referendum vote that would repeal the new tax law is looming in August 2014,” the statement continued.
House Minority Leader Beth Kerttula said the increase in spending that is not fully disclosed is leading to decreased revenue for the state.
“The revenue decrease is largely a decrease due to this increase in spending, and we want to know what’s behind that,” Kerttula said. “We need a lot more information before we just accept that figure. There’s a huge impact to Alaskans who want to know a lot more about it.”
Oil revenues make up nearly 90 percent of the state’s unrestricted revenue.
The forecast calls for a nearly $2 billion decrease in oil and gas revenue over the next year with the decline slowing in the years following.