Sen. John Coghill
PRODUCTION IS UP, THANKS TO SB 21
BY SEN. JOHN COGHILL
SPECIAL TO MUST READ ALASKA
Respectfully, Dermot Cole made a number of incorrect statements in his printed June 16, 2018 News-Miner article.
The statement that “[o]il production in Alaska is lower now than it was when SB 21 was approved,” is both inaccurate and an inappropriate comparison.
Although SB 21 was approved in 2013, SB 21 didn’t actually start taking effect until Jan. 1, 2014. See the Tax Division’s historical timeline here.
That being the case, an accurate assessment of Senate Bill 21 (oil tax reform) can only start in 2014.
So, let’s look at that.
According to the Alaska Department of Natural Resources Division of Oil and Gas, the Trans Alaska Pipeline System throughput in 2014 was 512,827 barrels per day.
How does that compare to 2018?
The most accurate assessment of current Trans Alaska Pipeline throughput can be found in the upper right-hand corner of the Alyeska Pipeline Service Company’s website. Alyeska was formed to design, build, maintain, and operate the Trans Alaska Pipeline System.
For 2018, as of June 20, 2018 at 3:23 PM, the average barrels produced per day was 540,763.
540,763 (2018) is more than 512,827 (2014). The difference is about 28,000 barrels per day.
540,763 is also more than Cole’s alleged 2013 figure of 532,000.
Contrary to what naysayers have stated, Senate Bill 21 has been a good step in the right direction.
How do we know?
There is evidence. Alaska has seen increased investment. Stable tax policy is one part of the equation. That overall equation has led to higher production projections. Those projections exist today but did not exist in years past.
That’s good news for everyone.
John Coghill is a state senator representing District B Fairbanks-North Pole.
Here’s a good link to the Historical Legislation in the Tax Division. The one provided didn’t work… http://tax.alaska.gov/programs/programs/reports/Historical.aspx?60650 What’s not clear is what revenue we’re taking in, and how much we’re paying out in credits. In terms of production it appears that we’re up slightly, but in terms of Revenue, which is critical, are we receiving our 1/3 share overall, as originally agreed upon ? There are some saying the Fox is in the Hen House. What does it matter if Production is Up and Revenue is returning to Industry via Credits ? And clearly there are credits in SB 21. It would be more than nice to see a chart showing revenue to the State alongside production…
There is nothing in this article about the taxes Alaska lost, because of SB 21.
Mike Hawker, ex rep who fashioned the “Taj-Ma-Hawker” LIO scandal with a secret “back channel” email between himself and the contractor Pfeiffer, crafting schemes to get around stet law and lease statutes, was key in raising the base oil tax rate.
Ex Alaska Representative Hawker was a key player at getting the oil severance tax`s in SB21 changed from 25% base rate with no “per barrel credits”, to a 35% base rate, with a sliding subsidy up to 8 dollars per barrel when oil is under 90 bucks a barrel. That`s the scam. The companies knew fracking was going to crash the price of a barrel of oil. They took us to the cleaners with SB21. It happened in an amendment in the House resources or finance committee (Hawker sat on both I believe). They can claim they increased production from it, but their snow job to us was “it would bring INCREASED revenue” from that “increased production” to the owners of the oil,..not less. Coghill is only looking at part of SB21`s intent. The revenue side has failed to appear and won`t come close to increasing revenues per barrel unless oil stays over 90 bucks for a year continuously. Absolutely unlikely in the near and mid term thanks to the affect of fracking technology.
If we don`t change SB21`s overly generous subsidies, we can kiss the permanent fund dividend so long no matter what the state does, and that means the health of the fund itself is in jeopardy as well,…all due to SB21. Thanks Mike Hawker (who`s spouse also worked for Conoco…). Coghill is a good-ol`-boy republican CBC member, who pushed SB21, SB91 and the LIO on us? His track record fixing the leaks in our ship hasn`t been too good… and his caveats in the dates of this or that are irrelevant. SB21 is scamming the state of the fair value of our owned-in-common oil. They had inside information about fracking….we didn`t so they put it to us!
.If the owners of the oil (us Alaskans) have to subsidize the profits of the resource extractors, it`s time to find a better investment.
We have done that with SB26 and our revenue generated by the permanent fund, which now produces more revenue for the state than oil severance taxes. Subsidizing a declining production bell curve, as SB21 does, is suicide for Alaska`s dividend program and seriously threatens the fund itself. Especially with these totally bought and clueless “oil-connected-“anti-tax republicans” controlling the state Senate. Hopefully Alaskans fix that as well come election time..
Mike Hawker, ex rep who fashioned the “Taj-Ma-Hawker” LIO scandal with a secret “back channel” email between himself and the contractor Pfeiffer, crafting schemes to get around stet law and lease statutes, was key in raising the base oil tax rate.
Ex Alaska Representative Hawker was a key player at getting the oil severance tax`s in SB21 changed from 25% base rate with no “per barrel credits”, to a 35% base rate, with a sliding subsidy up to 8 dollars per barrel when oil is under 90 bucks a barrel. That`s the scam. The companies knew fracking was going to crash the price of a barrel of oil. They took us to the cleaners with SB21. It happened in an amendment in the House resources or finance committee (Hawker sat on both I believe). They can claim they increased production from it, but their snow job to us was “it would bring INCREASED revenue” from that “increased production” to the owners of the oil,..not less. Coghill is only looking at part of SB21`s intent. The revenue side has failed to appear and won`t come close to increasing revenues per barrel unless oil stays over 90 bucks for a year continuously. Absolutely unlikely in the near and mid term thanks to the affect of fracking technology.
If we don`t change SB21`s overly generous subsidies, we can kiss the permanent fund dividend so long no matter what the state does, and that means the health of the fund itself is in jeopardy as well,…all due to SB21. Thanks Mike Hawker (who`s spouse also worked for Conoco…). Coghill is a good-ol`-boy republican CBC member, who pushed SB21, SB91 and the LIO on us? His track record fixing the leaks in our ship hasn`t been too good… and his caveats in the dates of this or that are irrelevant. SB21 is scamming the state of the fair value of our owned-in-common oil. They had inside information about fracking….we didn`t so they put it to us!
.If the owners of the oil (us Alaskans) have to subsidize the profits of the resource extractors, it`s time to find a better investment.
We have done that with SB26 and our revenue generated by the permanent fund, which now produces more revenue for the state than oil severance taxes. Subsidizing a declining production bell curve, as SB21 does, is suicide for Alaska`s dividend program and seriously threatens the fund itself. Especially with these totally bought and clueless “oil-connected-“anti-tax republicans” controlling the state Senate. Hopefully Alaskans fix that as well come election time..
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