Oil Production Down, Income Tax Inevitable

 A former oil field tech on the North Slope, Herb Butler, relays dire news about oil production dropping off in Alaska in an op-ed in the Fairbanks News Miner. He suggests we prepare ourselves by instituting an income tax structure now, at least by beginning this serious discussion, to prepare for what’s he says is inevitable.

The pipeline system is the weak point. The producers may nix any further budget increases and couple that with the cost of operation and delivery, resulting in a pipeline shutdown. When looking at cost versus sales income, this ratio has a shutdown point. The producers could hold the slope production at ransom by shutting down the pipeline. Concessions would arise and continual debate would occur. At today’s crude oil prices and the future expectations of low prices, it may not be worth producing North Slope crude oil, jeopardizing any plans to produce natural gas fuels.

I would suggest the state of Alaska leadership consider publicizing (telling Alaska citizens) the dim future of the oil and gas production. This would cause uproar and debate, yes, but also cast the foundation for an immediate state income and sales tax structure that would not necessarily arrest an economic slump but slow the decline a great deal. If we act appropriately, somewhere in the future is a stable point.