• Forecast
  • News Tip
  • Categories
Temperature Precipitation
Estimated read time
2m 8s

Alaska, lagging in oil production, looks to bring back boom

By CBS News 8:21 AM December 27, 2013

The problem isn't that they're running out of oil in Alaska -- the oil industry says there's still billions of barrels of oil in the North Slope alone. But they say the problem is taxes

The U.S. is on its way to becoming the world’s top oil producer. The Energy Department believes American output will soar to 9.6 million barrels a day by the year 2016. But surprisingly, Alaska, one of the country’s top oil suppliers, is being left in the dust.

Paul Hughes owns a snowmobile shop near Anchorage. He says there’s one day each year every Alaskan looks forward to: the day the state announces the oil dividend. He said this year it’s almost $900.

Every man woman and child in Alaska gets a check, their share of the state’s vast oil revenues. Hughes told CBS News’ Ben Tracy some people spend the money on snowmobiles and he used one of his kids’ checks to buy a new stove.

However, those annual oil checks are getting smaller because Alaska is producing less oil. Production on the North Slope peaked at 2 million barrels per day in 1988 but has dropped to less than 500,000 barrels currently. There’s so little oil flowing through the 800-mile Trans-Alaskan Pipeline that some state leaders say it may freeze and shutdown.

The problem isn’t that they’re running out of oil in Alaska — the oil industry says there’s still billions of barrels of oil in the North Slope alone. But they say the problem is taxes.

Kara Moriarty represents Alaska’s oil industry. She blames a 2007 oil tax imposed by the state that climbed as high as 75 percent depending on the price of oil that caused the oil industry to slow production in Alaska. Alaska has now fallen behind Texas, North Dakota and California in oil production.

“If we don’t change things we’re going to be out-surpassed by Oklahoma,” said Moriarty.

Alaska Gov. Sean Parnell has now pushed through a new 35-percent flat tax on oil. He’s hoping to lure companies back to Alaska’s North Slope.

“When California eclipsed us a producing state, that was embarrassing,” said Joe Balash, who runs Alaska’s Department of Natural Resources. “They are the most over-regulated, overtaxed place on the face of the planet – well in the United States.”

Alaska is uniquely dependent on oil. There is no income tax, property tax or sales tax. More than 90 percent of the state budget is paid for with oil taxes. The people in the state also depend on the revenue from oil.

Hughes knows what oil and those oil checks mean to his business, even if they are getting smaller. He told Tracy that he’d “like to see it higher.”

However, that won’t happen unless production on Alaska’s North Slope stops heading south.

Latest Stories

  • Politics

    Early voting begins in Alaska

    by KTVA CBS 11 News on Oct 20, 15:49

    Those who lined up at the Division of Elections headquarters in midtown Anchorage this morning were among the first in the state to cast their ballots for November’s general election. Voters across Alaska have more opportunity than ever before to vote early as the DOE has added 130 new locations for absentee and early voting. Those […]

  • News

    Begich urges more airport screenings for Ebola

    by Associated Press on Oct 20, 15:25

    U.S. Sen. Mark Begich has urged the president to expand health screenings at more international airports, including Anchorage, in response to Ebola concerns. In a letter to President Barack Obama, Begich said such “sensible travel restrictions” must be considered to help contain the outbreak in West Africa and prevent its spread to the U.S. U.S. […]

  • News

    Official: Kenai Peninsula residents oldest

    by Associated Press on Oct 20, 12:07

    A state official says the Kenai Peninsula has some of the highest percentages of older Alaskans in the state. The Homer News (http://is.gd/vHz4EI) says Alaskans 50 and older account for 36 percent of the population on the peninsula, compared with 27 percent of the population in that age group statewide. State demographer Eddie Hunsinger discussed […]

  • On-Air

    Les Misérables actors talk about touring production

    by KTVA CBS 11 News on Oct 20, 12:02

    Based on the classic novel by Victor Hugo, “Les Misérables” is one of the most popular Broadway musicals of all time. The play has been produced in 42 countries and seen by more than 65 million people worldwide, according to the BBC. “Les Misérables” is currently at the Alaska Center for the Performing Arts. Cassandra Niess, […]

  • On-Air

    Teacher of the Week: Mitch Tarter

    by KTVA CBS 11 News on Oct 20, 11:17

    While there’s no need to call the nurse, it’s safe to say the math bug is spreading in Mitch Tarter’s seventh-grade classroom at Mirror Lake Middle School. “He loves the subject so much and he has such a passion for it; it rubs off on you,” said seventh-grader Rivers Ducharne. The former Alaska Pacific University […]

  • News

    Plaintiffs in same-sex suit wed in Anchorage

    by KTVA CBS 11 News on Oct 20, 10:39

    Stephanie Pearson and Courtney Lamb exchanged vows outside the Frontier Building Monday morning in Anchorage. The wedding came moments after the couple picked up their wedding license. Monday is the first day same-sex couples could get their licenses following the Oct. 12 overturn of Alaska’s ban on same-sex marriage, which was approved by voters in […]

  • News

    Sitka Sound Science Center gets $1.3 million facelift

    by Heather Hintze on Oct 20, 9:17

    Hundreds of Sitka residents turned out to get a look at the newly renovated Sitka Sound Science Center, which got a $1.3 million facelift. “Today we’re here to remember the past, appreciate this very moment and look to the future,” said Executive Director Lisa Busch. The Sage Memorial Building was originally built in 1929 as […]

  • Sports

    Sitka roller derby team welcomes competition in first home bout

    by Heather Hintze on Oct 20, 8:29

    It was a sold-out crowd of 400 fans for the Sitka Sound Slayers as they took on the Wrangell Garnet Grit Betties. The bout was the first time a team from Alaska traveled to the small southeast community. The women started Sitka’s roller derby team less than two years ago. Players said they’re thrilled it’s […]