There is widespread agreement in Juneau that filling the pipeline will require new investment and more development in our oil patch.
We must become more competitive for both smaller, newer companies as well as those large oil producers looking to invest in Alaska.
Yet, with billions of barrels remaining to be developed, we lack a tax system that encourages companies to make long-term business plans.
That's because the numbers just "don't pan out." Our tax system is too complex and out of step with other oil-producing jurisdictions.
Until we can compete with these other jurisdictions, we can kiss billions of dollars in potential capital goodbye.
Our proposal rebalances the system by simplifying the tax structure and reforming tax credits to specifically target new production. Fundamentally, it creates a level playing field for all investors and opens the door to bring new investment and new capital to Alaska.
We include a Gross Revenue Exclusion that treats new oil production favorably by providing tax relief for new production areas. We also extend the small producer tax credit.
The Legislature's own consultant agrees, having stated
that our proposal dramatically improves Alaska's competitiveness.
I am pleased to see the needle has moved on the discussion in Juneau. No longer are we talking about whether oil tax reform is needed; today, most lawmakers understand it's a necessity. We must stem Alaska's production decline.
Alaskans have every right to be hopeful that this Legislature will reform our oil taxes in a meaningful way. Failure to act is not an option.
I will continue to weigh any proposal against my four guiding principles: one, any change must be fair to Alaskans; two, it must encourage new production; three, it must be simple so that it restores balance to the system; and fourth, it's got to be competitive and durable.
We must seize this opportunity. Let's pass oil tax reform that grows our state and creates opportunities for Alaskans for generations to come.