The president of BP America responded to Gov. Bill Walker’s recent claim that the state’s new oil production tax is costing Alaska hundreds of millions of dollars, telling a pro-industry group on Friday that the energy giant doesn’t fall under that category. “BP pays more in production taxes than we receive in credits, despite what you see in the papers,” said John Minge, referring to a recent opinion column submitted to media by the new governor.
Walker wrote in his article, “The hard truth about Alaska’s oil revenue,” that policymakers who passed Senate Bill 21 after a long stretch of high oil prices in 2013 gave little consideration to the effect low oil prices would have on Alaska’s budget.
Attending the conference and trade show was incoming Senate President Kevin Meyer, who said the issue of the credits is worth studying to determine which companies are receiving those credits. “I’m hoping it’s just a short-term thing but it’s a serious matter so we’ll take a look at it,” he said. The state’s fiscal situation is “concerning,” Meyer said, but “at low oil prices, that’s when you want to incentivize the oil companies to invest more money.”
Randy Hoffbeck, the state’s new revenue commissioner, who also spoke at the conference, said Walker is going to review the credits like any good businessman, but he said the credits will remain. “We’ll be writing a check this year for about $100 million more than we collect in production tax, but in our view that’s a cash-flow issue,” he said. “That’s an issue driven by oil price and it’s not necessarily something that’s inherently wrong with the credit program.
Kevin Durling, president of the Alaska Support Industry Alliance, said he is not reading anything into the governor’s statements. “I’ve been around a long time, and I’ve heard a lot of saber-rattling from different legislators and governors over the years,” he said. “It’s important to give him the opportunity to see what he does.”
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