NEWS BULLETIN

October 15, 2010 --- Vol. 16, No. 90October 2010

Parnell announces plan to cap ACES tax progressivity

Alaska Gov. Sean Parnell today announced a two-part plan to modify state oil taxes, to make the state more competitive in attracting new oil exploration and development. The first part of the plan consists of placing a cap on the ACES tax progressivity at higher oil prices, while the second part consists of introducing tax credits for technically challenged fields, such as fields involving the production of heavy oil.

In a speech to the Resource Development Council, Parnell said that he wants to see more oil and gas related jobs in Alaska, as well as new oil coming on line in the state.

“We can be more competitive in oil exploration and development,” Parnell said. “More oil means more jobs for Alaskans, more long-term revenue to the state, and lower TAPS tariffs per barrel. These resources, such as heavy oil, can serve as the primary new production source to stem the decline in North Slope production, and potentially increase production above today’s level.”

Parnell told Petroleum News that his administration is still working on the specifics of the tax changes, with a view to filing proposed legislation in the coming months.

“I’m starting this discussion right now,” Parnell said. “I want this discussion to be had now so that we’re ready for it when the legislative session comes.”

Parnell also said that he is challenging oil companies to publicly demonstrate that the tax changes will drive increased investment in Alaska and more jobs for Alaskans.

See full stories in the Oct. 24 issue of Petroleum News, available to subscribers online at noon, Friday, Oct. 22 at www.PetroleumNews.com


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