Fraser 2010 survey
Alaska has dropped in rank in The Fraser Institute’s annual survey.
Fred McMahon, the institute’s vice president of research international, told the Alaska Support Industry Alliance’s annual Meet Alaska conference Jan. 21 that the institute’s global petroleum survey ranks oil and gas jurisdictions based on industry views.
Jurisdictions are ranked on barriers to upstream investment and the institute identifies issues that jurisdictions need to address to attract greater shares of investment, McMahon said.
Comparing results of the 2010 survey with the previous year, he said that Alaska dropped in rank: In 2009 it was in the second-highest quintile for attractiveness; in 2010 it dropped into the mid-range. That doesn’t sound too bad, except the mid-range internationally represents the lowest range in North America, where Alaska ranks with the Northwest Territories, Quebec and California “in its friendliness to the oil and gas industry,” McMahon said.
He compared Alaska to Canada and said “rather surprisingly, even compared to Canada, Alaska is judged moderately hostile by the oil and gas industry.”
Alaska is “not too negative” when it comes to fiscal terms, but is viewed more negatively on taxation.
Environmental regulations are also viewed as problematic, with the issue that regulations aren’t transparent and predictable.
McMahon said it is obvious that companies will come to where the resources are — and Alaska has the resources, so that’s often cited as a justification for higher taxes, “because people say well, they’re going to come anyway.”
“The key question is how much more development would there have been if there were competitive regulations and competitive taxes in place?”
McMahon said the other factor is that, “the worse the regulatory-tax environment, the higher the profits industry will demand.”
—Kristen Nelson
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