11-5-13 Parnell Touts Benefits of Oil Tax Reform

Commentary:  Late yesterday, we received a copy of a letter (below) from Alaska Governor Sean Parnell (NGP Photo) addressed to citizens.  

We have supported tax reform in the spirit of fairness.  However, in the sense of 'enlightened self interest', we know that absent a competitive investment climate in an oil-abundant era, Alaska's production and economic strength will continue to decline.  

Tax Commentary: We would suggest that economic principles apply throughout the free market–whether one is employed by the film, cruise, fishing, farming, manufacturing or oil industry.  "The more you tax and regulate, the less you get from that source." Our friend, Bob Neumann, recently said, "The state legislature and governor’s office need to recognize the economic benefits that the cruise industry brings to our state.  Thousands of jobs would not exist without the cruise industry.  Overtaxing and overregulating has a direct effect on the industry.  A healthy balance must be permanently grounded in our state and not be continually revisited with each new legislature or governor.  This can only be achieved through education and promotion of the industry directly with the support of our government on the local and state level." -dh

Next August, voters will face a referendum question of whether to keep tax reform or repeal it.  We believe Parnell's communication efforts are valid and that Alaskans will come to understand how important it truly is to preside over a fair, predictable and competitive investment climate.  

Absent those qualities, who would want to invest gas pipeline or other project money in a place with the most remoteness to markets, the most difficult climate, the highest wages, the highest taxes, some of the most demanding regulations and a history of changing the rules of the game AFTER investments have been made?      -dh

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Dear Alaskan,

Over the past several months, Alaskans have started to see the benefits of our new oil tax structure, the More Alaska Production Act. Companies and investors are responding with long-term development plans for the North Slope, which is resulting in new opportunities and jobs for Alaskans. We are even seeing new entrants coming to Alaska.

Our new tax structure is working, and that’s great news for us, for Alaska’s economy, and for future generations. Let me share with you some of these recent announcements:

Caelus Energy Announces $1.5 billion investment in Alaska

Caelus President James Musselman: “We are attracted to Alaska because of the enormous geologic opportunity as well as the incentives, such as SB 21, that the state has put in place to encourage energy investment by independent oil and gas companies.”

BP Alaska president: Oil tax bill makes several projects possible

She