Debate over what is the real fair share for Alaska of oil extracted could come before voters at the ballot box in 2020 in the form of the Fair Share Act, proposed legislation that would reform Senate Bill 21.
Revenues gained through the Fair Share Act would boost the state’s share of production revenues by $1 billion annually, backers said during a news conference held on Sept. 9 in Anchorage. Those funds could be used by the Legislature to fund essential government services ranging from education, health care and public safety to rural electric equalization and marine highway transportation, plus capital projects and Alaska Permanent Fund dividends, they said.
Under SB 1 the state is giving award $1 billion to $2 billion annually in tax breaks for oil produced in the most profitable fields, according to Robin Brena, a member of the initiative committee who chaired former Gov. Bill Walker’s transition subcommittee on oil and gas.
SB 21, passed in April of 2013, increased the annual production tax on oil and gas from 25 percent to 35 percent, beginning on Jan. 1, 2014. It also authorized generous tax credit for exploration and production of oil and gas deposits north of 68 degrees north latitude, including an $8 per barrel net production credit.
The legislation, which would apply only to the largest and most profitable oil fields, at Prudhoe Bay, Alpine and Kuparuk, would eliminate the net production oil tax credits of $8 a barrel, and restore progressive taxes, specifically for legacy oil fields. Those three legacy operations make up 90 percent of the state’s oil production.
Impacted oil fields would be those which have produced at least 40,000 barrels of oil a day in the previous calendar year and in excess of 400,000,000 barrels of total cumulative oil production. For other oil producers, the tax would remain unchanged under this act.
Lt. Gov. Kevin Meyer has 60 days, ending Oct. 15, to confirm or deny the group’s application to put their measure on the 2020 ballot. If Meyer approves it, they would then have to gather signatures of registered voters equal to or greater than 10 percent of the total ballots cast in the state’s last general election to assure the initiative a place on the ballot.