Alaska State Chamber of Commerce Action Alert: Plan to Testify TUESDAY or WEDNESDAY
Action Alert February, 27 2012
Senate Resources Committee members announced today that they will be accepting public testimony for Senate Bill 192, relating to oil and gas production tax values.
TOMORROW Tuesday, February 28 at 6:00pm (Senate Finance Room 532) and Wednesday, February 29 at 6:00pm (Butrovich Room)
For those outside of Juneau, public testimony will be taken via teleconference at your local Legislative Information Office. For a complete list of statewide LIO's, visit here. If you are unable to make it to your LIO, you may call in and testify as well. The teleconference number is 1 (855) 463-5009.
If located in Juneau, please plan to testify in person or via teleconference at 463-5009.
The fact that the Senate Resource is finally taking public testimony is significant; because this is the first time the Senate has allowed public testimony on the issue of oil tax reform in the 13 months since this legislature convened in January 2011.
The top legislative priority for the Alaska Chamber during the 2012 session ismeaningfuloil tax reform. Meaningful oil tax reform means making Alaska competitive among North American peers and globally. Currently, HB 110, the Governor's oil tax reform bill passed last year by the House, is the only oil tax reform bill which we know will increase investment in production activities. Meaningful oil tax reform means meeting or beating the $5 billion of new investment committed by industry should HB 110 become law.
The Senate Resources Committee is working on amendments to its version of tax reform, Senate Bill 192. The Committee's current working draft committee substitute (CS) does not make significant changes to Alaska's current punitive oil and gas production tax.
Your voice is needed to encourage more significant reform to spur new investment and ultimately more production.
If you can't testify, send an email to your legislators. You can find out who your representatives are and how to contact them by clicking here.
You will only have a few minutes to communicate with the Senate Resources Committee. It's best to choose your focus. Here are a few ideas:
1. Significant tax reform is important to increase production, sustain, revitalize and potentially grow our economy.
2. What does significant oil tax reform mean to you personally? Your business, your industry? (e.g., will you be able to sell more cars, will the value of your home increase, will your children have the opportunity to have a career in Alaska, will you need to relocate your business?)
3. The committee substitute to SB192 will not alter the investment climate in Alaska. It is not significant; it won't move the needle and slow the accelerating production decline.
Currently, SB 192 does not make Alaska competitive. It simply tweaks the current policy without doing anything substantial to attract new investment to Alaska.
Substantial oil tax reform means meeting or beating the $5 billion of new investment committed by industry should HB 110 become law.
Alaska's economic future is at stake. Increasing production and creating jobs now is more important than the state making more money through high tax rates today.
Alaska's tax structure needs to be globally competitive and attractive. At one hundred barrels of oil, Alaska's government take is $85, compared to $48 in the Gulf of Mexico.
Tax policy does have an effect on the oil and gas industry. Business is booming in Alberta and North Dakota under their lowered their tax structures.
Alaska's oil industry ought to be booming! More exploration, more production, more jobs.
Exploration does not guarantee production. Companies currently exploring in Alaska, such as Repsol, support a change in the production tax structure.
It takes an average of at least between 5 to 7 years to reach production if an exploration well is successful.
Time is of the essence. The Senate Resources Committee needs to act swiftly to change the bad business climate in Alaska by proposing and advancing oil tax reform which brings at least $5B in new production investment.
Currently there are not even small scale projects in the development phase, let alone production phase.
Increased production would increase the health and viability of the Trans-Alaska Pipeline System (TAPS).