House Resources Committee • HB 288 Oil Production Tax Bill 

April 16, 2018 

Good afternoon. My name is Marleanna Hall, and I am the executive director of the Resource Development Council. Thank you for the opportunity to testify today.

RDC is a statewide trade association comprised of individuals and companies from Alaska’s oil and gas, mining, forest products, fisheries and tourism industries, as well as the 12 land-owning Alaska Native corporations. RDC members are truly the life-blood of Alaska’s economy. We believe the best approach to expand the economy and generate new revenues for the state is to produce more oil, attract more tourists, harvest more fish and timber, and mine more minerals. 

With regard to House Bill 288, it represents the third straight year of increasing oil and gas production taxes. By increasing taxes, HB 288 will increase costs and reduce Alaska’s competitiveness for attracting the investment necessary to move forward with promising new projects on the North Slope that have the potential to move the needle in new oil production. Increased throughput in the Trans-Alaska Pipeline System from these projects would help pull Alaska out of recession and generate more revenues than what would be raised from HB 288. 

When crafting legislation, I cannot overstate how important it is for the Legislature to consider the impact on Alaska competitiveness and future production. Oil and gas companies here must consistently compete for capital dollars within their global portfolio of assets and investment dollars. They are working hard to reduce costs in Alaska’s high-cost Arctic environment. However, HB 288 will make their Alaska projects more costly and less attractive. 

Under the current tax system, government share (state and federal combined) is still higher than the producers at every price point. In fact, the state gets paid even when companies are operating at a loss because it still collects royalties, property tax, and a gross production tax.

It is a tax system that is working, even though the taxes paid to the state and federal government is higher than the revenue the producers receive. 

Thank you for the opportunity to offer RDC’s perspective on HB 288 today and I urge you to reject this legislation.