ALASKA - Executives of the North Slope oil producers appealed to a legislative committee to pass Governor Parnell’s tax cut bill Wednesday.
They said their investment behavior won't change without it.
With the bipartisan majority in the Senate declaring Parnell’s oil tax bill dead on arrival there, executives from ConocoPhillips and BP went before a house committee in an attempt to keep it on the front burner.
"There is no other place on the planet where we have more resources than we do in Alaska with the exception of Russia," said Damian Bilbao of BP. "So this is not a question of opportunity and resources; this is a question of investment attractiveness."
The producers in particularly dislikes the progressive feature in the tax that accelerates the state's take at high prices.
“That next dollar, at $110 a barrel, the state and federal governments can take about 86 cents,"
said Scott Jepsen of ConocoPhillips.
The companies promised a robust program if the legislature approved the governor's bill.
"If nothing passes or nothing similar to that is the inverse of these statements true? Does it mean you will not increase drilling, you'll not pursue satellite development, you won't work to develop major projects with your partners or pursue other projects?" asked Representative Berta Gardner.
Jepsen was quick to respond. “Representative Gardner, through the chair, if things stay the same you should expect to see the same focus that we see right now. We are still drilling, we still are shooting seismic, we are still looking at additional opportunities out there. But the real difference is, how fast are we going to do those? What time frame do they come on-stream?”
And as long as returns on investment look better elsewhere, Bilbao said, "Then the investment will not come to Alaska at the same velocity that it will to other regions and you will not see growth as a result."
The message seems to be: Don't say we didn't warn you.
