Survey says Alaska has poor business climate for oil

Alaska Pipeline

Great Bear said the company could pump one million barrels into TAPS a day, however production has yet to start. (Photo by Timothy Widley/Creative Commons)

A survey of oil company managers and executives has given Alaska poor marks for its business climate.

The annual report by the Fraser Institute, a conservative Canadian think tank, stacks Alaska up against other states and countries in an effort to develop a “policy perception index.” The respondents weren’t kind to the 49th state.

The survey asked about 16 factors, including taxation, environmental regulation, political stability and security.

Nearly 900 oil and gas industry professionals responded.

State and country rankings. (Figure from Pg. 21 of the report)

State and country rankings. (Figure from Pg. 21 of the report)

Alaska came in 79th place, right in the middle. You might see that as a glass-half-full result, but Pakistan wasn’t far behind and it put Alaska just below Tunisia, where a terror attack killed 40 foreign workers at a gas plant in January.

Larry Persily, federal coordinator of Alaska gas pipeline projects, notes the survey was conducted between February and May, so it’s impossible to say how many respondents were aware the Alaska Legislature rolled back taxes on the oil companies in April. Persily says the controversy itself plays a role.

“Oil and gas taxes is an emotional issue in Alaska. It’s in the news constantly. There’s referendums. There are political battles. The industry is aware of that and it certainly colors industry’s perception.”

He also points out the report gauges perceptions, not actual conditions. Still, Persily says perceptions can sting.

“You don’t want that out there. It’s toxic but I think we also have to understand this is a self-reporting survey, it’s not a statistically accurate sample, so we should be concerned about it, but it shouldn’t ruin our day,” he said.

Bob Pawlauski, of the state Oil and Gas Division, says the Legislature made several changes this year that makes Alaska more friendly to industry. It provided flexibility to give companies more time to develop their leases, and it eased some of the permitting requirements. Not to mention the tax rollback. Former Anchorage Mayor Jack Roderick is working to get that repealed. He says the survey is an industry PR tool.

“Of course they’re speaking for their corporate interests,” Roderick said.

The industry named Oklahoma its favorite place this year. At the bottom of the pile is Venezuela.

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