Sen. McGuire’s Cook Inlet Gas Exploration Incentives Bill Passes the Senate
SB 309provides Gas Exploration/Development Tax Credits
April 16, 2010, Juneau, Alaska – Senate Bill 309 passed the Senate today with unanimous approval. The bill incentivizes gas exploration and development in the Cook Inlet by extending the existing tax credits for exploration and development projects from 10% to 25%.
“At a time when natural gas production and supply in the Cook Inlet is declining and the demand continues to grow, this legislation will strongly encourage companies to invest additional capital in exploring for new gas reserves,” said Senator McGuire. “We are facing an energy crisis in the Cook Inlet region. I am fighting for my neighbors in every way that I can to get reliable supplies of natural gas.”
SB 309 also establishes a production tax credit of 80, 90 or 100% for the first three wells drilled into the pre-Tertiary strata of the Cook Inlet with a jack-up drilling rig. This is an unexplored segment of the Cook Inlet that could contain significant amounts of oil and gas resources. The discovery of these resources could offer an opportunity to offset the decline in supply for the Cook Inlet.
In addition to addressing tax credits, SB 309 also deals with problems that have arisen with ACES (Alaska’s Clear and Equitable Share). The bill will allow small producers to access the oil and gas tax credit fund without requiring certain expenditures within 24 months of receiving a tax credit. Previously, ACES permitting delays made this requirement quite onerous.
“SB 309 is a compromise that will make small changes to ACES and spur development in the Cook Inlet, where Alaskans needs it most,” said Senator McGuire.