Resource Development Council

RDC Letter:
HJR 4 - Urging the U.S. Congress to provide equitability sharing from OCS production

March 16, 2015

Senator Cathy Giessel
Alaska State Capitol
Juneau, AK 99801

Re: HJR 4, Offshore oil and gas revenue sharing

Dear Senator Giessel:

The Resource Development Council (RDC) is writing to support HJR 4, which urges the U.S. Congress to provide a means for consistently and equitably sharing with all oil and gas producing states adjacent to the federal Outer Continental Shelf (OCS) a portion of revenue generated from offshore energy development.

RDC is an Alaskan business association comprised of individuals and companies from Alaska's oil and gas, mining, forest products, tourism, and fisheries industries. Our membership includes all of the Alaska Native Regional Corporations, local communities, organized labor, and industry support firms. RDC's purpose is to expand the state's economic base through the responsible development of our natural resources.

Under the Gulf of Mexico Energy Security Act of 2006, the federal government recognized the contributions of national security made by the oil-producing states of Alabama, Louisiana, Mississippi, and Texas and agreed to distribute to those states 37.5 percent of revenue from oil and gas development in newly leased federal waters in the Gulf. Alaska also contributes to national energy security through onshore oil and gas development, and has generated billions of dollars to the federal treasury through offshore leasing. These leases could contain tens of billions of barrels of oil, which in turn could generate hundreds of billions of dollars in revenue.

RDC has consistently supported federal revenue sharing to benefit the State of Alaska and local communities. We agree that states sustaining offshore energy development and production deserve a share of the revenue generated because they support offshore operations and experience impacts to local services and infrastructure.

Federal government grants are inadequate in addressing the need for additional investment in state infrastructure or the increased demands on state and local government resources resulting from offshore development, especially here in Alaska which has more coastline, more rural communities, and less infrastructure than any other state.

Given recent actions by the federal government to block future oil and gas development in Alaska, federal revenue sharing is vital. In January alone, the Department of Interior moved to forever block energy development on the coastal plain of ANWR, our greatest onshore energy prospect, and closed nearly 10 million acres of offshore areas to development, essentially putting off limits more than 10 billion barrels of oil.

These federal actions come at a time when Alaskans are facing a multi-billion deficit due to low oil prices and low production. It’s clear that Alaskans and our state’s economy would benefit significantly from increased oil production and federal revenue sharing from offshore development. In fact, the very concept of Alaska’s statehood is predicated on the development of our natural resources. Alaska was allowed to join the union because of the expectation that the development of our natural resources would sustain our economy. With federal revenue sharing, offshore development can help sustain Alaska’s economy for decades.

RDC endorses HJR 4 and fully supports Alaska sharing in the revenues generated from offshore oil and gas leasing, development, and production. Thank you for the opportunity to comment on this important revenue-sharing resolution.

Resource Development Council for Alaska