Representative
CHRIS TUCK

I’m Here for You

I want to hear from you,
share your thoughts, voice
your opinion. Together we
will make a difference.

Click here to visit my Website
 
Click here to write me an email

Call me anytime:
   (907) 465-2095
   Toll-Free (866) 465-2095

Visit me:
   May-December
   716 W. 4th St., Ste. 340
   Anchorage, AK 99501
   (907) 269-0242 fax

   January-April
   State Capitol Bldg. Rm. 422
   Juneau, AK 99801
   (907) 465-3810 fax

Contact Other Elected Officials:

Governor Parnell,
Anchorage Office:
907-269-7450
EMAIL: Gov. Sean Parnell
www.state.ak.us

Senator Lisa Murkowski,
Anchorage Office:
907-271-3735,
EMAIL: Sen. Lisa Murkowski

Senator Mark Begich,
Anchorage Office:
907-271-5915
EMAIL: Sen. Mark Begich

Congressman Don Young,
Anchorage Office:
907-271-5978
EMAIL: Rep. Don Young

Oil Debate Update
Record Profits, Record Savings
Tomorrow is the Time to Speak Out

Dear Neighbors,

This is the first in a series of newsletters about Senate Bill 21, the major re-write of Alaska’s oil tax system that is being hurried through the legislature in the last days of session. As it stands now, the proposal is a massive and ill-conceived giveaway of Alaska’s oil wealth with no clear connection to increasing oil production.

Since the current tax system, Alaska’s Clear and Equitable Share (ACES), came into place in 2007, the state and the oil industry have both benefitted. Alaska paid off its debt to the Constitutional Budget Reserve Fund and increased its overall savings accounts to over $16 billion. The major North Slope companies have also enjoyed enormous profits under ACES.

• Between 2007 and 2010 Conoco Phillips made $7.8 billion in profits from Alaska operations.

• BP has hauled in at least $8.5 billion in the same time period.

• Although EXXON refuses to reveal income statements, they have testified that their Alaska profits are similar to BP and Conoco Phillips.

Proponents of the Governor’s bill like to claim ACES “has priced Alaska out of the market for oil industry investments ” and Alaska takes “almost 90 cents of every 1 dollar in oil company profits through taxes and royalties.” The facts say otherwise.

Alaska has extremely generous tax credits and in reality charges only about 39 percent on a barrel of oil at $100. Top oil industry consultant Pedro Van Meurs has concluded:

• Total government take in Alaska tax rate for oil is about average compared to other oil-exporting nations.

• Alaska’s tax credits for oil exploration are among the best in the world by a large margin.

• In fact, under Alaska’s credit incentive system the state takes on 76 percent of the cost of a new development if it proves to be unsuccessful.

Rep. Tuck joins the Schoolhouse Rock “Bill” at a rally for education.

Additionally, on March 23, 2011 Conoco Phillips executives acknowledged that Alaska has “strong cash margins” and “very good rates of return.” This is good for the producers and good for Alaska. ACES is working in part because it is a profit-based based tax. If you don’t make a profit, you don’t pay any taxes. The dispute in the Legislature began about how to divide the unexpected profits when oil prices and the related profits rise far above what was predicted.

Not only are oil companies doing very well in Alaska, they are doing better in Alaska than elsewhere. A new report from the non-partisan Legislative Research Services shows that for the first three-quarters of 2012, ConocoPhillips made a profit of $1.7 billion in Alaska. That compares to approximately $556 million over the same time period in the lower 48/Latin America, where low gas prices have resulted in a net value of $4.42 per barrel of oil equivalent (BOE). ConocoPhillips made $1.14 billion more in Alaska than the rest of its United States operations combined.

Public Testimony Tomorrow

Tomorrow at 5:00 P.M. the House Finance Committee will be taking public testimony on SB 21. This will likely be the last chance for the public to weigh in on this massive oil revenue giveaway which will cause huge budget deficits and threaten the entire Alaskan economy.

Please consider going to the Anchorage Legislative Information Office at 716 W. 4th Avenue at 5:00 P.M. tomorrow, Tuesday April 9, and telling the legislature that SB 21 is a bad deal for Alaskans:

• SB 21 removes progressivity, which allow the state to take a larger share of profits at high oil prices and encourages companies to reinvest in Alaska by allowing them to reduce their taxes when they reinvest here.

• SB 21 removes capital credits, which are crucial for the smaller producers because they don’t have the upfront capital the majors do. When Alaska shares in investment and risk for all investors large and small, we encourage competition on the Slope and new exploration, development, and ultimately production.

• It creates tax breaks for “new oil” – unfortunately, the way it is written now, oil that is already going to be profitably produced under current development plans gets the breaks too.

• At currently projected prices it will give away roughly $1 billion per year in state revenues without requiring new investment or new oil in the pipeline. The industry refuses to make any commitments to invest that money in Alaska or to ensure more oil gets into the pipeline.

Thank you for taking the time to read this update. The future of our Alaskan economy depends on people getting involved.

I’m here for you, so please keep in touch on matters important to you and your family!

Warm regards,

Chris Tuck
Alaska State Representative
District 29 – Anchorage