Oil & Gas Legislative Update: Federal policies in the spotlight in 2019.
Author | Anderson, Tasha |
Position | OIL & GAS |
While in past years oil and gas legislation has dominated discussions in the Alaska Senate and House of Representatives, for the 2019-2020 session Alaskans have dialed in on our legislators wrestling primarily with how to handle the Permanent Fund Dividend, rising crime rates, and a long-overdue resolution and plan of action for the state's budget, among other issues.
Although oil and gas tax policy conversations aren't making headlines in Alaska this year, they're ongoing. According to an op-ed by Alaska Oil and Gas Association (AOGA) President and CEO Kara Moriarty, "Given the tough budget conversation underway in our state, it's not surprising that some people are once again trying to put oil taxes in the spotlight." Alaska has seen more than seven oil and gas tax policy changes in the last fourteen years, and under the ACES tax regime oil production declined by approximately 169,000 barrels per day. With the passage of SB21 in 2014 and a relatively unchanging tax environment since, oil production stabilized and even increased, despite the plummet of oil prices during the same time period. According to Moriarty, "Thanks to significant investment focused on more production, North Slope production actually produced 518,000 barrels per day for fiscal 2018, an increase of 75,000 barrels per day over what had been predicted [in the fall of 2012]. More production means more revenue for the Permanent Fund and key essential services--a win for all Alaskans.
"We understand oil tax policy is complex and hard for even seasoned experts to understand. But the key takeaway is that our current tax structure is performing. While the state has huge issues to resolve this year, the standard oil tax fallback isn't the answer."
Fortunately Alaska's legislators aren't currently pushing oil and gas tax initiatives, but recent policies affecting the Alaska oil and gas industry have instead originated at the federal level, stirring both optimism and frustration regarding oil and gas exploration activities in the Last Frontier.
Arctic OCS
In a disappointing turn of events for those interested in offshore exploration, in March US District Judge Sharon Gleason issued a ruling that President Donald Trump's Executive Order 13795--an attempt to revoke then-President Barack Obama's decision in 2015 and 2016 to withdraw 125 million acres in the Beaufort and Chukchi Seas from oil and gas leasing--was unlawful, reinstating Obama's orders.
According to Alaska District...
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