Economist Says Tax Terms Must Be Locked in to Attract Oil Investments
ANCHORAGE - A consultant told lawmakers they need to lock in tax terms in order to attract oil investment.
Pedro Van Meurs began two days of presentations to state senators by urging them to seek contracts of 10 to 25 years for all major development projects on the North Slope.
Senator Hollis French (D-Anchorage) objected that fiscal certainty would violate the state constitution, but Van Meurs said it's the only way for Alaska to compete.
"The reason is the history of Alaska terms have changed here rather significantly over the last 15 years,” said Van Meurs. “I think investors would be more concerned about changing terms than they would be in Alberta, Australia or the Lower 48."
"More a question of whether this body would pass a resolution to change the constitution and the people of the state approving it,” said French.
Van Meurs represented former Governor Frank Murkowski when the governor proposed a contract for a gasline that would have tried to lock in oil taxes for 30 years and gas taxes for 45 years.
The legislature never voted on that proposal.