Resource Development Council

RDC Action Alert:
Urge the legislature to act now to reverse
North Slope production decline

Testimony was Tuesday, March 12th

Alaskans will get one last opportunity in the Senate to testify on the urgent need for oil production tax reform when the Senate Finance Committee takes public comment on Tuesday, March 12 on the committee substitute for Senate Bill 21. The hearing will begin at 4:00 p.m. Testimony will be taken at your local Legislative Information Office.

Throughput in TAPS is forecast to average 563,000 barrels per day in FY 2013 and is declining at a rate of 6-8 percent annually. The pipeline is Alaska’s economic lifeline since 92 percent of the State’s unrestricted general fund revenues are derived from oil production.

The decline is not because Alaska is running out of oil, it is in part due to Alaska no longer being competitive in attracting industry investment in production. High oil prices have expanded industry investment in production, but not here. Alaska has dropped behind North Dakota in production and is at risk of falling behind California.

Action Requested:
Please present brief testimony (two to three minute limit) at your local Legislative Information Office urging the legislature to make meaningful policy changes this session to attract new investment and increase North Slope production. Your participation at the hearing is vital and it can make a difference. Express support for Governor Parnell’s efforts and his four guiding principles in oil production tax reform:

1. It must be fair to Alaskans;
2. It must encourage new production;
3. It must be simple, so that it restores balance to the system
4. It has to be durable for the long term.

For a list of Legislative Information Offices, visit:

To read the latest version of the governor’s bill (CSSB 21), please visit:

Points to consider in your comments:

  • With steadily declining production and Alaska’s economy at risk, the legislature needs to act this session to reform oil production taxes, attract new investment and increase production.
  • The forecast ten years from now indicates unless more oil comes online, Alaska’s production will fall to about 400,000 barrels per day. Alaska projects need to be competitive with more profitable opportunities elsewhere in order to attract significant additional investment for more North Slope production.
  • Accelerated North Slope production decline is unacceptable and puts Alaska’s economy and jobs at risk. Production has fallen by more than 200,000 barrels a day since 2007 – a decline of 6-8 percent annually – and TAPS is operating at one-quarter of the volume it once carried.
  • Alaska is about to slip to the fourth largest oil producing state in America as California is on the verge of surpassing us. Alaska now supplies only 8 percent of domestic production, down from 25 percent in the 1980s.
  • Oil production reform legislation should adhere to the governor’s four guiding principles: it must be fair to Alaskans; it must encourage new production; it must be simple so that it restores balance to the system, and it has to be durable for the long term.
  • Alaska has the highest costs and tax rates in the nation. Corporate capital is limited, and only the most profitable projects in a company’s portfolio will get funded. Clearly, investors are taking their money where they get a greater return. We need new policy that encourages long-term planning and investment in new production in Alaska.
  • Alaska has the oil but policy makers hold the keys to new production. The State can keep current policy that restricts investment or change it to something that attracts investments in production while securing a long-term future for Alaskans.
  • With policy reforms that move the needle on major investments, Alaska would get a healthy oil and gas industry that could extend decades.
  • New production will promote growth in the private sector economy, leading to more jobs and a more stable and long-term revenue stream for the State.
  • Please achieve meaningful reform of oil production taxes to make Alaska a compelling place to invest. Doing so will prevent a steepening in the decline curve and put more oil in the pipeline, something virtually all Alaskans want.

Testimony was Tuesday, March 12th

Return to Action Alerts