A move to increase oil taxes in Alaska has been condemned as being harmful to the economy.
Members of the State Legislature passed the seventh change to the state’s oil tax law in 12 years in the form of House Bill (HB) 111 on Friday.
But the an industry body has warned that the bill, if signed into law, will raise taxes and add costs to a beleaguered oil industry.
The Alaska Oil and Gas Association say the move will decrease investment in Alaska projects and inevitably make it harder for new oil projects and fields to be developed.
President and chief executive Kara Moriarty said: “HB 111 increases taxes on the industry just one year after the last tax increase became law when HB 247 was passed.
“Make no mistake: HB 111 will cause companies to rethink their investment strategy in Alaska, meaning they will likely spend less money and employ fewer Alaskans.
“With the state mired in an economic recession, these actions will hurt.”
Moriarty added: “Enough is enough.
“If this bill is signed into law, the oil industry, which remains, by far, the largest contributor to the State’s unrestricted revenues, will be giving even more.
“We will have ‘chipped in’ toward solving Alaska’s deficit, despite having financial challenges of our own due to a prolonged period of low oil prices.
“If Alaskans want to see exciting new oil fields developed and new oil flowing through the pipeline, then fiscal stability must be established in Alaska. The constant moving of the goalposts and continued failure to fully reimburse companies for earned tax credits is not only frustrating, but makes Alaska’s chances of attracting desperately needed investment worse with each passing year.”
According to the AOGA HB111 will negatively impact exploration, especially with small firms.
The group claims the proposed changes challenge the prospects of large-scale new oil discoveries from moving forward.