Oil Industry Supporting Parnell’s Proposed Tax Reduction

Dave Donaldson, APRN – Juneau

Representatives of the oil industry were at the state capitol Wednesday to offer general support for Governor Sean Parnell’s bill reducing their taxes in an attempt to increase production on the North Slope.

With a recognition that oil production is declining – and will continue to decline over the years – Conoco-Philips’ Vice President for external affairs, Wendy King,  said that Alaska still has very high possibilities for finding and producing more oil.  But, she says there are problems to overcome.

King told the House Resources Committee that a lot of factors come into play when her company is deciding to invest in a project – and the biggest concern is uncertainty in the return on their investment.  In considering the risk-versus-rewards of an investment, she says the state’s “progressivity”  surtax on profits from high oil prices takes away from the rewards side of the equation.

Governor Parnell’s proposed changes to the state’s tax regime would effectively lower the progressivity feature – by an estimated $1 billion in state revenue per year.

Download Audio (MP3)