Senate Resources Committee • HB 111 Oil Tax Bill
April 17, 2017

Good evening. My name is Marleanna Hall, and I am the executive director of the Resource Development Council. Thank you for the opportunity to testify today.

RDC is a statewide trade association comprised of individuals and companies from Alaska’s oil and gas, mining, forest products, fisheries and tourism industries, as well at the 12 land owning Alaska Native corporations. RDC members are truly the life-blood of Alaska’s economy.

With regard to House Bill 111, raising taxes on companies during an extended period of low oil prices is not sound fiscal policy. The idea that oil taxes must be changed again to “create stability” contrasts the message from the companies looking to invest in Alaska – once more adding to instability. This bill will increase costs for our largest private sector industry and would send Alaska to the bottom of the competitive scale.

Earlier today during invited testimony, you heard one company speak to the investments made since 2013, the year the More Alaska Production Act, or SB21 was passed. And as a reminder, SB 21 was affirmed by Alaskans in 2014 has brought new exploration, jobs, and continued investment to the state.

Another company spoke earlier to the recently discovered opportunities, but reflected on the need for “investor confidence,” referring to state tax policy, prices, and other uncertainties.

Increasing taxes on Alaska’s oil industry will not increase throughput for the Trans Alaska Pipeline System and it will not encourage the development of promising new prospects on the North Slope. Higher taxes at this time will likely deter investment and lead to lower state revenues and a weaker private sector over the long run. 

Further, HB 111 will jeopardize recent gains like the first oil production increase in 14 years, billions of dollars in new investment since 2013, and optimism about recent multi-billion barrel oil discoveries on the North Slope. If

When you incentivize something, you get more of it. We need to incentivize the industry to drill more, create more wealth, increase activity, and aim for next year's production to be even higher than this year's.

Madame Chair and members of the Senate Resources committee, I urge you to reject this legislation and I thank you for the opportunity to offer comments today.