Senate Finance Committee • HB 111 Oil Tax Bill
April 29, 2017

Good morning. My name is Marleanna Hall, and I am the executive director for the Resource Development Council.

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.

This version of HB 111 achieves the policy set by the Governor and his administration to eliminate refundable cash credits without compromising Alaska’s competiveness to attractive future investment.

While this bill increases the total government take on industry it is less harmful than the bill passed by the house that would have pushed Alaska to the bottom of the competitive scale. In addition, the committee substitute maintains SB 21, legislation affirmed by voters in 2014.

New discoveries by Conoco Phillips, Caelus, and Armstrong could increase TAPS throughput by adding up to 550 thousand new barrels of oil per day into the pipeline, with measureable economics benefits throughout the State. Alaska must maintain a stable and durable tax policy with incentives to invest, which is key to see these projects come into production.

We must celebrate the 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. 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.

In conclusion, RDC supports leaving the underlying voter-approved oil tax structure in place. In the spirit of compromise and  “pulling together,” however, RDC understands the changes to cashable credits. It is important to note that eliminating cash credits will increase total government take, which could potentially impact future investment and production.

Madame Chair and members of the Senate Finance committee, I thank you for the opportunity to testify.