ANCHORAGE, Alaska—In a Friday announcement before the Alaska Resource Development Council, Gov. Sean Parnell said he wants to make some changes to the state's oil tax structure.
Parnell wants to tinker with ACES, or Alaska's Clear and Equitable Share: the tax system championed by Parnell’s predecessor, former Gov. Sarah Palin, and strongly supported by Parnell after he inherited the job.
“Oil remains the backbone of our economy,” Parnell said.
Parnell told the council that he's met with all the major oil producers to find a way to make the state's tax structure more competitive. Under ACES, the higher the price of oil, the higher the tax rate producers pay.
Parnell asked council members to help win legislative support for his plan, which has two key elements.
“First, I propose eliminating capping progressivity at higher oil prices,” Parnell said. “Secondly, I propose tax credits for technically challenged fields.”
Parnell says the tax breaks would encourage more heavy oil development, which would help to stem the decline of North Slope production.
But Parnell's opponent in the Nov. 2 general election, Democrat Ethan Berkowitz, says his plan is too little, too late.
“I just really want to emphasize this is an incredible admission of failure on his part -- that the policy he's been advocating for just isn't working for Alaska,” Berkowitz said.
Berkowitz says Parnell's plan is aimed at getting votes rather than encouraging investment. He accused Parnell of having what he calls an "Election Day conversion."
Parnell told the council he's been working on a comprehensive plan for some time, which addresses permitting, land availability for development and roads that will bring access to resources. Parnell presented his proposed changes to the council as part of a bigger picture.
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