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Parnell Looks To Europe For Insight On Oil Tax Policy

In April, Gov. Sean Parnell traveled to Europe for what he described as a “fact-finding mission” on international oil tax structures. On Thursday, the governor shared his conclusions from that trip with the Juneau World Affairs Council.

In justifying the travel, Parnell said he wanted to see a place that had changed its tax regime five years out.

“And the North Sea turned out to be that place. Like Alaska, the North Sea is a harsh, unforgiving environment. It’s an offshore industry with platforms, supply ships, helicopters, sub-sea pipelines …”

Parnell also noted that the North Sea was an old prospect that had coped with declines in oil production.

“Any of this sounding vaguely familiar? It kind of sounds like home, actually.”

During his visit, Parnell spent time in Norway and Scotland. He spoke of Scotland favorably, comparing Alaska’s recently passed tax overhaul to Scotland’s own policy. He applauded the country for lowering its tax rate and for creating incentives for new production on legacy fields. Norway, he criticized for raising its taxes, which he said created uncertainty for producers.

This spring, critics of Parnell’s oil tax plan argued that Alaska shared much in common with Norway and should have a similarly high tax rate. And during his presentation, Parnell was asked if he was worried that Alaska taking part in a race to the bottom on oil taxes. The governor reframed that by answering that his top concern was keeping Alaska “competitive” on a global marketplace.

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