Former Director's Testimony to Congress contradicts current Administration position

JUNEAU -Senator Joe Paskvan, Co-Chair of the Senate Resources Committee, has called on Kevin Banks, former Director of the state’s Division of Oil Gas, to answer questions about his testimony before the United States Senate’s Committee on Energy and Natural Resources less than one year ago.

During the hearing on May 10, 2011, U.S. Senator Lisa Murkowski asked Mr. Banks a question about the throughput decline of TAPS. He responded, in part, that:

“With the exception of development of heavy oil resources known to exist around the Prudhoe Bay, Kuparuk, and Milne Point fields, and the potential resource plays (like the Bakken in North Dakota) that may exist on the North Slope on State controlled lands, the natural field declines cannot be replaced without access to production from Federal lands and OCS. There are no known conventional resources on State or Native lands that are likely sufficient to replace the decline in the existing production rates.”

To read Mr. Banks’ May 10, 2011, testimony to Congress, click here (see page 45).

Senator Paskvan’s questions are simple: Does Mr. Banks still believe that, (1) with the noted exceptions of heavy and shale oil, Prudhoe Bay’s natural field declines cannot be replaced without access to production from Federal lands and the OCS; and (2) that there are no known conventional resources on State or Native lands that are likely sufficient to replace the decline in the existing production rates?

To read Senator Paskvan’s March 27 letter to Kevin Banks, click here.

Senator Paskvan said, “This is a critically important issue in the oil tax debate and it is our fiduciary responsibility to make policy decisions that are based on the best possible information. In order to fully understand the potential benefits of a tax reduction, the Legislature needs to know if Mr. Banks’ statements to the Congressional Committee were accurate.”

“Frankly, I trust Kevin’s professional judgment. I am putting a lot of value in his Congressional testimony and want to verify that it was a sound evaluation of Alaska’s North Slope oil resources based on the best available scientific data.”

Over seven weeks ago, Senator Paskvan also sent a letter to Commissioner Sullivan asking him to respond to Mr. Banks’ Congressional testimony; however, DNR has not responded to Senator Paskvan’s February 12 inquiry.

To read Senator Paskvan’s February 12 letter to Commissioner Sullivan, clickhere.

“It’s important for Alaskans to understand that the State’s oil tax policy (i.e., ACES) does not drive investment decisions on federal lands or the Outer Continental Shelf,” said Senator Paskvan. “The Governor has told Alaskans that one million barrels per day is an ‘achievable target.’ However, if those barrels are from federal lands and OCS, reducing the production tax on state land will simply give the oil companies billions of dollars per year in additional revenue, with little benefit to Alaskans.”

For more information, please contact Jeff Stepp in Senator Paskvan’s office at (907) 465-3709

Source: Office of Senator Joe Paskvan