Resource Development Council

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

Testimony was April 9, 2013

The House Finance Committee will be taking public testimony on Tuesday, April 9 from 5:00 to 8:00 p.m. Testimony will be taken statewide and the preference is for people to testify in person at your local Legislative Information Office (LIO). Comments should be limited to two minutes.

Throughput in TAPS is declining at a rate of 6-8 percent annually. 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 elsewhere, but not in Alaska.

The State House Majority released its annual statewide survey last week that found Alaskans support modifying ACES and want the Legislature to stop studying the issue and act this session. The survey found that 56 percent believe ACES should be modified and 63 percent say its time for the Legislature to take action to stem the decline.

Action Requested:
Your testimony is needed to encourage lawmakers to move forward with meaningful policy changes this session to attract new investment and increase North Slope production. If you testified on this bill in other committees, THANK YOU! However, the House Finance Committee also needs to hear from you. If you have yet to testify this session, please make your voice count – now. Your participation in the process is vital and it can make a difference.

For a list of Legislative Information Offices, visit:

Points to consider in your comments:

  • Without tax reform, our current tax system guarantees declining production, putting our economy at risk. The legislature needs to act now 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.
  • 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 April 9, 2013

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