The high price of unpaid tax credits in Cook Inlet - Must Read Alaska
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Friday, July 30, 2021
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The high price of unpaid tax credits in Cook Inlet

BLUE CREST WAITING ON $90 MILLION

By ELWOOD BREHMER
ALASKA JOURNAL OF COMMERCE

A pair of small companies working in Cook Inlet are trying to overcome funding shortfalls stemming from the State of Alaska not yet making good on promised tax credit refunds.

Furie Operating Alaska and BlueCrest Energy, both Texas-based independents, had to interrupt their 2017 work plans because expected tax credit repayments from the state did not come through.

BlueCrest CEO Benjamin Johnson said in a prior interview with the Journal that the state owes his company roughly $90 million in tax credits for drilling and development work done at its Cosmopolitan oil project before legislation passed to kill the tax credit program July 1. The state has paid BlueCrest $27 million for its refundable tax credits since the company purchased the “Cosmo” project in 2012, according to Johnson.

BlueCrest is the sole owner and operator of the Cosmo oil project on the edge of the Inlet near Anchor Point on the Kenai Peninsula.

He said in August the company hoped it would have to pause its drilling program only for a month or two after a well was finished in September, if private financing could be secured.

Oil industry backers have roundly criticized Gov. Bill Walker for vetoing $630 million worth of appropriations in 2015 and 2016 to pay the industry tax credits. Walker has been steadfast in his assertion that the state cannot afford to make the large credit payments while still in the midst of $2.5 billion-plus annual budget deficits.

On the other hand, the governor has also insisted he would like to see the state pay down on the obligation as soon as the Legislature passes fiscal reforms to balance the state budget. Walker’s original fiscal plan proposed in early 2016 included $1 billion to pay off the credits entirely.

[Read more at Alaska Journal of Commerce]

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

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  • “Walker has been steadfast in his assertion that the state cannot afford to make the large credit payments while still in the midst of $2.5 billion-plus annual budget deficits.”
    The truth is we CAN afford to pay these credits off. I say stop the shell game with the budget. Lets pay off these credits as soon as contractually possible. BUT let’s also use another $2 billion to pay a Final Dividend of $3000. Ending the Dividend along with a sustainable draw from PF Earnings nearly closes the budget gap. These actions will create a short-term economic stimulus and a safety net as we transition to a smaller economy.

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