Resource Development & Alaska's Economy
Alaska is blessed with an abundance of natural resources, including oil and gas, fish, timber, minerals, and our Great Land's natural beauty itself. Our economy depends heavily on natural resource development, which provides an abundance of jobs and funds a considerable share of State government. To maintain a vibrant economy, we must strive to: 1) promote resource development, 2) diversify our economy, and 3) ensure that our State presents a fair, competitive and positive business environment.
Our fish and timber resources need to be managed to ensure sustainable harvest and balance with environmental impact, personal use, and tourism. These industries are a vital part of Alaska's heritage and a way of life for many Alaskans, and must be managed in a fair, balanced, and responsible way.
Our mining industry and its economic impact on the State are growing. This trend is important to the diversification of our economy, and we must be vigilant to ensure that mining activity is done responsibly, productively, and with minimal environmental impact. I believe that current State and Federal laws create this balance.
Today, the oil and gas industry dominates resource development activity and drives the Alaskan economy. Quite simply, Alaska would not be what it is today without this vital industry. Since completion of Trans Alaska Pipeline System (TAPS) in 1977, Oil and Gas revenues have contributed more than 85% of the State's unrestricted revenue, and the industry provides more than 40,000 direct and indirect jobs.
With North Slope oil production on decline, and approaching 30% of peak capacity, Alaska faces an uncertain and challenging future. The State must take positive steps to expand oil and gas development on the North Slope, reverse production decline and secure a brighter future for Alaska.
Recent changes to Alaska's production tax system, Alaska's Clear and Equitable Share (ACES), have had a detrimental affect on oil and gas investments in Alaska. Economists and consultants agree that Alaska is uncompetitive in the global oil and gas investment community. Taxation on oil and gas production must be returned to a fair, competitive and stable system.
Positive steps have been taken to encourage exploration, through tax credits, and exploration drilling plans for 2012 are encouraging. Immense resources remain on the North Slope, both in existing fields, and new frontiers, including the NPRA, ANWR and the Offshore Continental Shelf (OSC). As a State, we need to work with the industry, not against it, to promote responsible development, and access to these new frontier areas.
Development of Alaska's vast North Slope gas resources will become a reality, but it will require a partnership between the State and the industry. The industry will bring the technology and experience to deliver this complex and costly project, but the State must provide a competitive business climate. The markets have changed, and the experts agree that an LNG export project is the most likely scenario. Construction of the gas pipeline and LNG facilities will create an economic boom for Alaska, and long term jobs and revenue to fund critical State projects. The project will also provide a long term, low cost, and secure energy source to fuel Alaska's economy for decades to come. As your legislator, I will work tirelessly to ensure development of Alaska's gas resource become a reality!
Here's the Bottom Line: A favorable business climate will bring investment, development, production, jobs and revenue to fuel the economy of the State of Alaska for decades to come. Let's build a bright future for Alaska, and let's do it responsibly!