ANCHORAGE — The Alaska Oil and Gas Association has announced that the state had its first year-over-year increase in oil production in more than a decade.
The figures provided by the Alaska Department of Revenue show that oil production between April 2015 and March 2016 was nearly one percent higher from the previous year. The state has not seen a yearly increase in oil production since 2002, Anchorage station KTUU-TV reported.
Sarah Erkmann, a spokeswoman for the association, said the growth can be attributed to tax changes approved by the state Legislature years ago.
“Our view is that in 2013, when the legislature changed the oil tax structure it created incentive for companies to spend money in Alaska’s oil industry,” Erkmann said.
The association’s announcement comes as lawmakers are considering a bill that would increase taxes on the oil and gas industry while reducing tax credits.
Industry officials have opposed the legislation brought by Gov. Bill Walker, arguing that the added tax burden would further harm an industry already struggling with low oil prices.
“Adding taxes to an industry that is cash flow negative isn’t going to help the situation,” said Erkman.
Walker defended the bill in a statement issued Saturday, saying the proposal provides a way to help balance the state’s budget.
“We join with AOGA in celebrating any increase in the TAPS oil throughput. Over the past year we have regularly engaged with Washington D.C. at the highest level to ensure access for more oil exploration and production,” Walker said. “However, as we work to address the state’s $4 billion deficit, it is important that we balance our budget in a fair and sustainable way. HB 247 modifies Alaska’s oil and gas taxes and credits that were approved during a much different fiscal environment that are not sustainable now or in the foreseeable future.”
