Oil tax reform is critical to Alaska's future
Help make Alaska #1 again.
Alaska needs more oil production …
… to pay our bills,
… sustain a healthy economy
… keep Alaskans safe, healthy and educated
… and make sure our children have a bright future.
Oil pays for 90 percent of state government…
… which allows us to enjoy a wide range of state services
… without paying state income or sales tax
… or dipping into the Permanent Fund.
Oil grows the Permanent Fund…
… It added $840 million fiscal year 2013
… and has contributed $13.6 billion since its inception.
One out of every three Alaska jobs is tied to oil & gas …
… and while Alaska’s overall employment level has been steady and North Slope oil & gas employment has been strong, a disproportionate number of North Slope jobs are for oil field maintenance, repair & operations and add no new oil to the pipeline
… in fact, only one in five BP employees on the North Slope is involved in finding more oil or building projects
But oil production is rapidly declining …
… The trans-Alaska pipeline is three-fourths empty and now carries 25% as much oil as it did at its peak.
… Since 2007 – when the legislature imposed ACES retroactively – North Slope production has declined almost 31%
… and decline an average of 6.5% last year.
Between revenue losses from declining oil production and state spending increases, Alaska may face a budget deficit this year…
… The oil price required for the state budget to break even increased 22% in a single year
… from $85/barrel in FY 2012 to $104/barrel in FY 2013, according to the state’s Office of Management & Budget.
… Some experts predict oil will drop this year
… How will Alaska make up the difference as oil revenues continue to decline? New individual taxes and fees? The Permanent Fund? Cuts to state services?
In fact, according to the Legislative Finance Division, Alaska will lose $900 million this fiscal year due to falling oil production…
… That’s more than the entire state spends on schools, roads, harbors and airports each year
… almost double the entire Municipality of Anchorage operating budget
… more than six times this year’s Fairbanks North Star Borough’s budget
… and 2.5 times more than the entire budget for the University of Alaska.
Alaska missed out on the nation’s oil boom because our tax structure was too high
... Since ACES passed in 2007, North Slope production has fallen almost 31 percent while New Mexico production increased 38 percent, Oklahoma went up 35 percent, Utah 46 percent and Texas a whopping 70 percent.
There’s plenty of oil yet to produce…
… We know the oil is there in huge amounts – at least 77 billion barrels of oil equivalent in place on the North Slope. While all of it is expensive, and much of it is technically challenging, Alaska has a 35-year track record of overcoming challenges and pioneering technology that has proven itself over and over again.
Oil tax reform is already producing results…
… Alaska’s newly reformed oil tax is already producing results. Even through the law does not go into effect until January 1, 2014, Repsol, BP, ConocoPhillips and new entrant Caelus Energy have already responded with additional development plans, which will result in new production, new opportunity and new jobs for Alaska.