Here in Juneau, we remain focused on tying oil changes to new production for Alaskans. Legislators began sifting through expert analysis from consultants hired by both the administration and the legislature.
Those experts showed in public hearings that Alaska is missing out on record levels of capital investment in our oil fields, while North American oil investment is nearing record highs.
The experts' testimony also revealed that the growth of capital investment in Alaska has flat-lined across the last few years.
In an industry where new production follows new investment, that's especially troubling.
The experts told legislators that Alaska is no longer competitive in the global market. Not because we lack oil; but because our tax system is far too complicated and discourages investment.
They warned that our tax system taxes too much when oil prices are high and exposes Alaska to credit obligations when prices are low.
That is why I proposed a simpler tax regime with incentives geared towards actual new production. With targeted reforms, Alaska can move to the front of the oil-producing pack.
The Legislature's own consultants noted the positive impact our bill would have on Alaska's global competitiveness. Specifically for new production, when the price of oil is $100 per barrel, under our proposal, Alaska would go from being less competitive than Russia and Venezuela to being more competitive than Texas and North Dakota.
My pledge to you is this: I will work to pass a tax system that is fair to Alaskans, one that encourages new production, one that is simple so that it restores balance to the system, and one that makes Alaska competitive for the long term.
Now is the time to act. Let's not miss our opportunity to fill the pipeline and grow Alaska's economy for generations to come.