Alaska’s major oil producers testified Wednesday afternoon that Alaska is uncompetitive and that oil tax changes are needed to improve the investment climate.
Representatives of BP, ConocoPhillips, Exxon Mobil Corp., Pioneer Natural Resources, and the Alaska Oil and Gas Association (AOGA) gathered before the House Resources Committee, which is hearing Gov. Sean Parnell’s bill to change ACES by reducing the tax burden on the state’s petroleum industry. The bill also offers incentives for companies to pursue further exploration.
“We think that it will increase drilling activity, put more oil in the pipeline, and produce more jobs for Alaskans,” testified Ken Sheffield, Alaska President of Pioneer Natural Resources.
BP’s presentation papers spelled out the situation in rather pointed terms: “Alaska is uncompetitive,” it read. “U.S. production is growing; Alaska production isn’t.”
Democrats oppose changes to ACES and think the Governor and oil companies should focus on a provision already on the books called “royalty relief,” which gives oil companies a break when they can prove certain fields are uneconomic due to high royalty payments to the state.
Pioneer said it already pursued royalty relief, and that the process of demonstrating economic need was “very challenging.”
