In the Capitol, we continue to work toward oil tax reform to make Alaska competitive again and to spur new production.
Most here agree that our current system needs to be fixed. We know it discourages investment at these higher oil prices and puts the State at significant risk at lower oil prices.
While there was $600 billion in worldwide oil investment last year, Alaska saw less than one half of one percent of it.
We've done better before. And we can do better again for Alaskans.
We know Alaska has billions of barrels of oil below ground, but our above-ground tax system is not incentivizing new production.
Indeed, production from our legacy fields continues to decline. There's a lot of new oil to be had in old oil fields if we can make it economic to get at it.
Additionally, we have to expand development in new areas.
That is why my proposal establishes a Gross Revenue Exclusion (GRE) to provide a tax break for new areas with new production.
It's simple: Under my proposal, new production gets you tax relief.
I remain encouraged by the sense of urgency in Juneau this year. The Senate Special Committee on TAPS Throughput should be commended for their diligence and thorough work. I especially appreciate the work the committee did to integrate the expert and public testimony into a respectful dialogue.
Any legislative proposals will be met with an open mind and will be evaluated according to my four guiding principles: any tax change must be first, fair to Alaskans; second, it's got to encourage new production; third, it must be simple so that it restores balance to the system; and fourth, it's got to make Alaska competitive for the long term.
If we hold true to these principles, Alaskans will reap the benefits of increased oil production for generations.