Heavy oil tax incentive amendment passes U.S. Senate

Petroleum News Alaska Staff

The United States Senate approved an amendment April 24 to the energy bill which includes language by Alaska Sen. Frank Murkowski that will encourage production of viscous oil from Alaska’s North Slope and help Alaska coal to be used to produce synthetic fuels, the senator’s office said.

The amendment calls for Alaska heavy oil to receive a $3 per barrel federal tax credit, an incentive designed to encourage production of an additional 200 million barrels of heavy oil from Phillips Alaska Inc.’s West Sak field over the next decade.

The amendment also provides a $3 credit (equivalent to oil-produced energy) for low-pollutant synthetic fuels to be produced from coal. The measure specifically expands and extends an existing tax credit to apply to fuels produced from either tar sands, brine, biomass or coal before 2007.

The Murkowski language was included in the tax portion of a Finance Committee amendment to the energy bill.