ANCHORAGE (KTUU) - With the passing of H.B. 111, it's now the seventh change in oil tax policy in past 12 years. Uncertainty, which industry leaders say has negative impact on Alaska's oil and gas industry.
In the short term, the latest change isn't going to impact the big oil companies like Exxon, BP, Conocophillips and Hilcorp. Instead, it's the so-called little guys, like Armstrong and Caelus, who produce less than 50-thousand barrels each day - who will likely be re-thinking their investment decisions.
Alaska oil and gas officials say taking away cash payments to smaller companies, and replacing it with a deduction, will impact business decisions in the short-term. But perhaps the biggest takeaway from the passing of Saturday nights legislation, for the industry as a whole, was the establishment of a working group.
Alaska Oil and Gas Association President and CEO Kara Moriarty says the working group, which will keep the oil and gas tax debate going, sends a message to the industry that even more changes to oil tax policy could be coming.
"From our perspective, enough is enough," said Moriarty. "Alaska is a high cost environment already, and what is Alaska going to do to continue to attract investment to this state. Because this bill is going to have an impact on investment, so how can we provide a level of stability."
That working group is expected to hold meetings later this fall, and there's a chance there could be a renewed effort to increase production taxes, either by the legislature this year or next, or in a ballot measure.