Parnell proposes oil, gas tax changes

Posted: Tuesday, January 18, 2011

JUNEAU — Gov. Sean Parnell is proposing sweeping changes to Alaska’s oil and gas production tax, an effort that he says is aimed at boosting oil production and creating more jobs for Alaskans.

Among other things, the bill, proposed on the eve of the legislative session, would alter the tax rate assessed under the barely three-year-old tax regime known as Alaska’s Clear and Equitable Share, or ACES.

The proposal would change the progressive surcharge triggered when a company’s net profits top $30 a barrel, subjecting incremental values to higher taxes. For units now in production, it would cap that surcharge at 50 percent when oil prices top $92.50 a barrel; for new fields, the cap would be at 40 percent at higher-priced oil.

The tax-rate change alone would cost the state treasury more than $5.2 billion between fiscal years 2013-2017, according to an analysis released by the governor’s office.

But Parnell said it’s wrong to look at the plan as though his administration is taking money from the state; there’s at least $11 billion in savings currently and his intent is to grow the economy — not focus on growing government reserves, he said.

His proposal also would provide tax incentives aimed at encouraging infield North Slope development.

Oil is king in Alaska, largely responsible for keeping the state running and lining its coffers. Politicians have been looking for ways to stem declining production and get more oil flowing through the aging trans-Alaska pipeline system.

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