Energy industry leaders reject oil and gas tax hikes

The top energy industry lobbyist in Alaska denounced Gov. Bill Walker’s proposed oil and gas tax changes on Monday.

Alaska Oil and Gas Association President Kara Moriarty told the House Resources Committee that companies can’t afford higher costs when oil prices are low.

“If you want the policy of Alaska to be to raise taxes on an industry that has negative cash flow, then that’s your prerogative, but what we’re saying is that that policy will impact their investment and production,” Moriarty said.

Walker proposed raising the minimum oil and gas tax from 4 to 5 percent. He also wants to eliminate some tax credits for drilling and exploration.

The changes would reduce the state government’s $3.5 billion deficit by $500 million.

Rep. Geran Tarr, an Anchorage Democrat, asked Moriarty to reconcile industry concerns with the actions of some companies, such as Hilcorp, which gave employees $100,000 bonuses last year.

“How can you expect the Alaska public to react to information like that?” she asked.

Moriarty said Hilcorp honored a long-term commitment to their workers with the bonuses. She added that other major employers have been laying off workers in Alaska.

Armstrong Oil & Gas Inc. Chairman Bill Armstrong testifies (Photo by Andrew Kitchenman)
Armstrong Oil & Gas Inc. Chairman Bill Armstrong testifies on Feb. 29, 2016 (Photo by Andrew Kitchenman)

Armstrong Oil and Gas Chairman Bill Armstrong said other states have had stable oil and gas taxes. But Alaska has made several changes over the past decade, making it more difficult to invest.

He said most countries have been cutting taxes on energy companies.

“They’re all making things better, with the exception of three countries that I could find: Congo, Madagascar, and Tanzania. And Alaska,” Armstrong said. “Three countries and a state. So, to make things worse when things are bad is, you’re kind of in rare company.”

The committee will hear testimony from more industry executives on Tuesday.

Andrew Kitchenman

State Government Reporter, Alaska Public Media & KTOO

State government plays an outsized role in the life of Alaskans. As the state continues to go through the painful process of deciding what its priorities are, I bring Alaskans to the scene of a government in transition.

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