JUNEAU, Alaska — State senators on Saturday took a new tack on oil taxes — and efforts to get more oil into the trans-Alaska pipeline — after an overhaul of Alaska's oil tax structure stalled in the Senate's bipartisan majority caucus.
A piece of that overhaul was a tax provision for new field oil production, and on Saturday, the Senate Finance Committee grafted a similar version of that tax break from the stalled SB192 onto a House bill that was intended to encourage more oil and gas drilling in select basins around the state.
If the new version of HB276 passes the Senate, the House would have to agree to the changes or the bill would go to a conference committee. House Speaker Mike Chenault said it would be a large policy to make with one vote on the floor and no hearings on the changes on the House side. He said the House majority would have to take a look at what it wanted to do.
The House also could just keep the bill in what's known as the limbo file — and let it die.
The Legislature is scheduled to end Sunday. Unknown yet is whether the governor will call lawmakers back into special session to deal with oil taxes. He had said earlier this week that he would if the Senate passed an oil tax bill in the Legislature's last days, to give the House time to vet a bill. But the bill that advanced from the Senate Finance Committee looks far different from SB192.
Work was moving at a brisk pace Saturday morning, as the House Finance Committee advanced an education funding package and a bill extending Alaska's film tax credit program and took up a $2.9 billion state capital budget, which also includes supplemental spending items for the current fiscal year. That budget figure does not include a bond package for state transportation projects.
A conference committee continued work on the operating budget, with funding for Alaska Performance scholarships and tourism marketing among the unresolved issues. Also still outstanding: HB9, an in-state gas pipeline bill that is a Chenault priority.
Early Saturday afternoon, Chenault said he didn't see either oil taxes or HB9 getting wrapped up by Sunday, but he said work on HB9 continued.
On Friday, Senate Finance Committee co-chair Bert Stedman said he thought it unlikely that SB192 would make it out of the caucus. The bill had been pulled from a Senate floor vote Thursday after it failed to garner the votes necessary to pass. But when asked Friday if that meant SB192 in any form, he said he wouldn't say that.
Stedman has said that one of the stumbling blocks among senators has been deciding how to address oil in legacy fields, like Prudhoe Bay and Kuparuk, long the mainstays of Alaska's oil industry, where production has been declining. Thus the decision to find a way to try to move forward on encouraging new oil from new fields.
Sen. Bill Wielechowski, D-Anchorage, said the Senate moves represent a substantial incentive, and meaningful tax change that will "super-charge" new oil production on the North Slope and bring in more independents — companies in addition to the slope's current Big Three players.
An analysis by PFC Energy, a consulting firm that's been working with the Senate on the oil tax issue this session, found that total government take would be around 64-66 percent for new field production at various cost-to-produce scenarios at $120-a-barrel oil. Under the current tax structure, government take at the same price point and scenarios would be 77-78 percent.
Rep. Mike Hawker, R-Anchorage, said this isn't a comprehensive approach to taxes.
At least nine senators had previously signed onto HB276, from Rep. Steve Thompson, R-Fairbanks, as cross-sponsors.