Democrats in Legislature introduce their version of oil tax reform


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Democrats in the state House and Senate unveiled proposals to grant tax relief to North Slope oil producers in separate bills introduced in the state House and Senate Feb. 11.

They have been critical of a bill changing the oil production tax introduced in January by Gov. Sean Parnell. Parnell’s proposal is now being reviewed by the Resources Committees of the House and Senate.

The Democrats’ bill is Senate Bill 50 and House Bill 111.

“The goal is to get more oil into the pipeline and to get a fair share for our oil,” said Senate Democratic Leader Johnny Ellis, D-Anchorage. “We propose a reduction for production structured in such a way that it truly rewards new oil and new production.”

For new fields, the bill would exempt 20 percent of the barrels produced from production taxes in addition to the generous investments the state is already making in the form of credits. For new oil from existing fields, the bill offers three options for producers to choose from: a tax reduction on all barrels above current levels, a tax reduction for tapping into new pools within old fields, or a break for producing heavy oil. 

“Our proposal walks the walk on increasing production and protecting Alaska,” said House Democratic Whip Chris Tuck, D-Anchorage. “We give benefits to anyone who opens a new field or gets more oil from an existing field, and we offer some new ways to help get more oil out of the ground and into the pipe.”

Rep. Les Gara, D-Anchorage, said, “Giving breaks for companies that produce more oil is one lever, and we do that. But we also need to expand the conversation about how to get more oil flowing, and that includes partnering with the industry, finding new technology to pull up heavy oil, and helping companies get the oil from new fields into the pipeline. And in this bill we do that too.”

House Democratic Leader Beth Kerttula, D-Juneau, is the prime sponsor of the House version of the Democratic legislators’ proposal.

Senator Bill Wielechowski, D-Anchorage, prime sponsor of the Senate version of the bill, said, “you don’t have to give away the farm to get more oil production. We put up sideboards at very high and very low prices, and we give significant rewards for new oil in the pipeline.”

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