Before ConocoPhillips has even had a chance to get out from under the latest environmental lawsuit over the Willow Project, the Alaska Senate has a plan to tax it at a new level.
SB 114 changes oil production tax calculations, reduces the per-barrel tax credit, closes a loophole that now benefits Hilcorp, and ring fences the Willow Project, limiting the developer’s ability to deduct its capital expenditures against its production tax from other fields.
That’s a big deal, according to those in the business. In addition, there may be other “Easter eggs” in the bill, which also is going to be a big shift for Hilcorp.
It was drafted by oil company foe Sen. Bill Wielechowski, and it has no fiscal note. It was also not sent to Senate Resources, which would have put Sen. Cathy Giessel in an untenable position for her next reelection campaign. Giessel, in the past, has not favored unreasonable oil taxes.
The bill may also be more about pushing the House to not go for a full Permanent Fund dividend. There is also a possibility that Wielechowski did not draft the bill in the manner his colleagues had requested.
ConocoPhillips has not made its investment decision yet on Willow. It first has to get through what it hopes will be the final environmental lawsuit.
These loons in the Senate think they control both houses of the legislature and have little or no fear of the Governor but we will see how it all turns out I think they may have underestimated both the speaker and the Governor and certainly the voters, especially those working to pay the bills…
Nobody underestimates Dunleavy. He’s shown repeatedly he is weak, ineffective, and not one to take seriously.
He might huff, even puff, but he won’t blow anything except hot air. About two weeks after the fact.
They don’t care. Let them eat cake. Oh. My bad. They don’t want any peasants to have cake either.
They saw a HUGE trust fund that everyone has got a piece of, so they want their 30 pieces of silver as well. Too bad it’s going to backfire…
Why does ConocoPhillips have to defend against a lawsuit? They have a fed lease. Shouldn’t the government respond, defend against st a y suits?
They, like you, can be sued for damn near anything in this country.
The term is lawfare. Political war fought in court instead of on a battlefield.
It’s the Bill W. mindset ( or lack of) that made Flint Mi. the way it is these last few decades, since automakers have all but left completely. “OUR FAIR SHARE “ is a great campaign slogan.
Google Earth Flint ……… all the rainbow flags in the world can’t cover the blight there.
Maybe we could take the oil from the pipeline and re-injected into the ground.
Cash in on Dunleavy’s carbon sequestration boondoggle.
Transgenderism isn’t going to teach itself without taxpayer dollars.
Willow is not on state land. Willow is on federal land. That means Alaska does not enjoy revenue like we do at Prudhoe Bay- which is on state land. Conoco wants Alaskans to provide corporate welfare- from Prudhoe Bay revenue to subsidize the Willow development- that’s what this law will fix. Otherwise Alaskans would have to pay over one billion in corporate welfare to subsidize Conoco. Where does that money come from? Are Alaskans ready to pay an income and sales tax to subsidize Conoco?
We don’t want new taxes to pay corporate welfare. A typical Alaska family of four has already lost more than $20,000.00 in lower dividends due to SB-21.
I’m a COP shareholder. Conoco does not need welfare. COP had $14.60 EPS for the trailing 12 months.
The $8/bbl credit was devised to incentivize production in aging oil fields, Willow is a new oil field, with high productio n rates anticipated, there is already capital credits for Willow and very reduced royalties for the State,. New technology (Fracking) made recovery in aging fields much more economical than anticipated resulting in huge profits for producers. The intent of the credit was to share risk, the problem is there is no shared reward so the credit should be eliminated, or reduced.
I hope they vacate their lease, and the state takes it over. When we all see how much revenue that will generate, then it will be obvious that we have been getting ripped off by the oil companies.
Hahahahaha! The State that couldn’t turn a profit selling liquor to a captive audience on a ferry is going to take over private industry and run it better…hahahahaha!
Willow is subject to state production taxes, levied at the wellhead, which means for oil sold on the west coast take ANS oil price and subtract off tanker fees, the TAPS tariff, all other ‘feeder’ pipelines tariffs, and an adjustment for the quality of the oil. That ‘netback’ calculation gives you the wellhead price where the production tax is levied. All oil in the state is subject to production taxes, regardless of who owns the land. The state’s complicated production tax system is a ‘net-income’ system, where operating costs and capital costs can be deducted/credited. So, capital intensive projects, and/or high operating cost projects that have to ship oil through numerous pipelines to get to market can pay substantially less production taxes than fields not meeting that criteria.
Oil produced from state lands is subject to state royalty, at a minimum of 12.5%, using the same netback pricing formula. For oil produced on federal lands like COP’s Willow project in the NPR-A, the state’s royalty share gets dumped into an ‘Impact Fund’, which goes 100% to the local residents, who can use it for just about anything, including funding their government.
Here’s an idea, let’s just continue buying our oil needs from the middle east making them rich(er)…..
America doesn’t need the jobs. From what Ive seen and read lately, not many want to work anyway.
Legislators have zero interest in the costs of doing business or producing anything, The focus is always on the taking of the profits for government expansion. The amount of money the state goes through now is unsustainable in any reality but the legislature will spend it all until it is gone and the state government will collapse because there are not enough private citizens earning to support the unwieldy spending of government.
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