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ACES Slowed Pipeline Decline

Senator French releases independent analysis of throughput data

JUNEAU – Today Senator Hollis French (D-Anchorage) released data from the non-partisan Legislative Research Services Division showing ACES, Alaska’s Clear and Equitable Share, actually stemmed the decline of North Slope crude throughput in the Trans-Alaska pipeline.

            “In the five years prior to ACES, throughput decline averaged 6.09%.  In the five years since the passage of ACES, decline reduced to 4.62% annually.  As policy makers continue to debate major tax change, I believe non-partisan independent facts are critical to the discussion,” said Senator French.

            The three years of most drastic decline percentage-wise, 1998-2000, were under the tax structure known as ELF.  Declines averaged nearly 10% each of those years. While industry argues that massive tax reductions are necessary to stem decline, the ELF tax structure was regressive, with Alaska’s government take eventually lowering to 0% on 15 of the 17 largest oil fields in North America. 

            “These numbers suggest major tax reductions have failed to increase production.  With billions of dollars for Alaskan schools, roads, and public safety at stake, this data tells a cautionary tale for legislators hoping changes to ACES will result in substantial production increases,” stated Senator French.   French went on to say, “We must tie reductions in our tax to increases in production, or else we will be guilty of failing to learn from history.”

Link to Legislative Research Report:

http://alaskasenatedems.com/docs/031813_leg_research_brief.pdf

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