Alaskan wants ELF repeal on state ballot

Ray Metcalfe of the Republican Moderate Party is leading a drive to put repeal of the economic limit factor for oil on the Alaska ballot. The ELF reduces the state’s production or severance tax on some Alaska oil fields based on such factors as how productive wells are in a field and the size of a field. The ELF is designed to prevent the state’s tax on production from being the factor that causes wells to be shut in as their productivity falls late in life, and also to encourage development of marginal oil fields.

In addition to Metcalfe, an Anchorage resident, sponsors of the measure include Robert L. Buch of Anchorage and James Price of Kenai.

Alaska Lt. Gov. Loren Leman certified the initiative application to repeal the ELF for oil March 18. Sponsors will need to collect at least 31,451 signatures from registered Alaska voters, Leman said in a letter to Metcalfe. Initiative supporters will have a year from the time the state notifies them that petition booklets have been printed.

The petition summary reads:

“This initiative would repeal the economic limit factor (ELF) now used to calculate each oil producer’s production tax. That calculation starts with a tax rate of 15 percent of the value of the oil, except during the first five years of a field’s production, when it is 12.25 percent. Application of the ELF reduces the tax rate. The rate is reduced more for fields with lower production or that need more wells to produce a given amount of oil. Repealing ELF would change these calculations and would tax oil from all fields at flat rates of 12.25 or 15 percent.

“Should this initiative become law?”