Peterson, Gara Introduce ‘Truth in Alaska Oil Company Profits Act’

Rosemarie Alexander, KTOO – Juneau

Two state lawmakers say the state should force major oil companies to declare their Alaska profits.

Anchorage Representatives Pete Peterson and Les Gara have authored the “Truth in Alaska Oil Company Profits Act.”  It’s aimed at Exxon-Mobil, the world’s largest and most profitable oil company.  Exxon is the only major oil company operating in the state which withholds the information.

Under federal law, companies must report profits made within the U.S.  But Alaska law uses a formula to estimate in-state profits for corporate income tax reporting, and those numbers are confidential.

The U.S. Securities and Exchange Commission requires reporting if enough profits come from a particular region.  That’s one reason ConocoPhillips’ Alaska profits are known.  British law requires BP to release its annual Alaska profits.

Gara says Exxon-Mobil is diversified enough that under federal law it doesn’t have to reveal Alaska profits.

The legislature is considering Governor Parnell’s proposal to give oil companies bigger tax credits.   Gara calls it the biggest tax rollback in state history.  At current prices of more than $100 a barrel, the state could lose an estimated $2 billion dollars a year in oil revenues.  Peterson says to maintain a fair balance between the industry’s and Alaska’s royalty share, the state needs a company’s profit information.

The legislation would require any company receiving more than $50 million in Alaska oil tax credits, or producing more than 75,000 barrels of oil per day, to make quarterly reports of its Alaska profits.

Governor Parnell says he hasn’t seen the legislation yet, but he says it could be a slippery slope.

The legislation will be assigned to committee on Monday.  The governor says he’ll withhold final judgment on the bill until he sees it.

Right now, Gara and Peterson, both Democrats, are the only sponsors of the legislation. But they believe Republican co-signers will be forthcoming.  Gara believes it would be hard for any legislator to say Exxon should be allowed to hide their Alaska profits.

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