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Juneau, Alaska – The Alaska House of Representatives Monday passed a bill to incentivize natural gas refining and fertilizer production, in an effort to help restart the Kenai Peninsula’s Agrium fertilizer plant. House Bill 100, by Speaker of the House Mike Chenault, allows a company that produces urea or ammonia or gas-to-liquids products to credit their taxes if their feed stock comes from a state lease.
“HB100 is about getting capital to flow to the Kenai Peninsula, rekindle market interest, provide hundreds of family-sustaining jobs, and bringing back a revenue stream to the State,” said Chenault, R-Nikiski. “We’re following a similar incentive structure as those targeting new oil and gas exploration, with a limited window and timeframe for its use and ample protections for the state’s bottom line.”
The credit cannot be carried forward from year to year and its value cannot exceed the amount the state receives for its royalty share. Operators wouldn’t be able to apply the credit for restarting a facility or any other pre-production purposes. The tax credit would sunset in 2024.
“The state royalty gas usage by Agrium could bring the state approximately $18 million in new revenues with a tax break that could amount to $3 million,” said Chenault. “It provides a net gain to the state for a value added product from one of our abundant resources: natural gas.”
HB100 now moves to the Alaska Senate for consideration.