Governor Proposes Incentives for Alaska’s Refineries
March 31, 2014, Juneau, Alaska – Governor Sean Parnell today proposed incentives to encourage refineries to produce and sell more refined petroleum products in Alaska. The governor’s incentives package follows extensive work with Interior lawmakers to find ways to ensure Alaska’s refineries thrive.
“A healthy refining industry in our state benefits Alaskans in many ways, including jobs and economic opportunity, as well as refined fuels for use in our homes and businesses,” Governor Parnell said. “By creating a more favorable tax climate, we have the opportunity to keep an industry strong that provides jobs for Alaskans, adds value to Alaska’s oil, secures our military’s source of fuel, and helps make Alaskan resources accessible to Alaskans.”
Governor Parnell’s proposal offers new tax credits to in-state refiners for infrastructure upgrades and investments that target higher production, the development of low sulfur fuels, and the expansion of storage capacity.
Specifically, the proposal:
• Allows an in-state refinery tax credit against state corporate income tax liability for qualified infrastructure expenditures and allows a credit based on volume refined.
• Allows a lessee selling oil to an in-state refinery to use its contract price to determine the royalty value owed the state.
Alaska’s refineries in Valdez, North Pole and Nikiski employ hundreds of Alaskans producing gasoline, diesel, commercial and military jet fuel, home heating fuels and kerosene. Alaska refiners’ customer base includes Alaska residents, the Department of Defense, the Alaska Railroad, commercial airlines and Alyeska Pipeline Service Company.
“Refineries provide good jobs and opportunities for Alaskans, and it is in the State’s interest to incentivize refineries so that Alaskan fuels are available to Alaskans as inexpensively as possible,” Governor Parnell added.
The value of the governor’s proposal could result in tens of millions of dollars toward a healthy in-state refinery industry. The incentives can be offered as amendments to pending legislation.
Posted: March 31, 2014