JUNEAU – Friday, Senator Wielechowski (D-Anchorage) released the findings of a research report he requested reviewing profit data recently released by ConocoPhillips. The legislature’s non-partisan research division determined that, “On a barrel of oil equivalent (BOE), Alaska is the most profitable region for the company by a wide margin” in the first quarter of 2018. ConocoPhillips netted $26.18 per barrel of oil produced in Alaska, more than twice the next most profitable region, Asia Pacific/Middle East, at $13.01. Alaska earned ConocoPhillips $445 million of its $1.14 billion profits during that quarter. Alaska was also the most profitable area in the world for ConocoPhillips in 2017.

 

“Our tax system is flawed. We all want the oil companies to succeed financially – and they are – but Alaska can simply no longer afford to offer the most generous oil tax credits in the world,” said Senator Bill Wielechowski (D-Anchorage). “It’s fundamentally unfair to take thousands of dollars in Permanent Fund Dividend checks from Alaska families every year to give to the oil industry in the form of enormous tax breaks.”

 

According to the Alaska Department of Revenue Spring 2018 Revenue Forecast, in 2018 Alaska is projected to collect $3.90 per barrel in production taxes and allow $1.2 billion in deductible oil tax credits to major oil producers. Governor Bill Walker and the Republican Senate Majority have opposed changes to the state’s oil tax system, instead seeking to deplete the Permanent Fund Earnings Reserve and cut PFDs to balance our budget.[xyz-ihs snippet=”adsense-body-ad”]”While we praise the oil industry for succeeding, we also have to consider Alaska is still struggling in a recession,” said Senator Tom Begich (D-Anchorage). “Alaska is a place we all love and benefit from, and in light of these substantial profits, I look forward to suggestions and solutions that will effectively contribute to the broader economic recovery Alaska truly needs.”

 

“As this state continues to deflect billions of dollars in oil revenues in the form of per barrel credits, the burden to balance the budget and provide necessary services is solely, and erroneously, forced upon working Alaskans,” said Senate Democratic Leader Berta Gardner (D-Anchorage). “This is not about one company making significant profits. It’s about providing a balance to fixing our economic situation, and it takes all of us to achieve that.”

 

Although more difficult to review their data, it’s expected that the other two major Alaska oil producers, BP Exploration and ExxonMobil, experience similar profitability in the state.