Oil tax hike may imperil Alaskan ‘renaissance,’ governor says

HOUSTON (Bloomberg) - A campaign to increase tax revenues from Alaska’s biggest oil fields must be examined closely to make sure it doesn’t threaten an industry “renaissance” in the state, Governor Mike Dunleavy said.

The petition is currently collecting voters’ signatures and if it gets enough it will go on the state’s ballot next year, bypassing the legislature and the governor.

The tax initiative is a “big discussion” this year, Dunleavy said in an interview on Bloomberg Radio. “We have to make sure that our investment prospects stay positive in Alaska. We’re taking a look at this initiative very closely.”

Campaigners want to increase the state’s share of production revenues and eliminate tax cuts, measures that they say will generate about $1 billion a year for a state that’s in dire need of more funding. The changes would only apply to large, old fields that have turned into cash cows with little future investment needed, they say. ConocoPhillips, Exxon Mobil Corp. and Hilcorp Energy Co. are among the biggest producers in the state.

Dunleavy said it’s important not to deter companies from big expansion plans. About $4.5 billion has been invested over the past two and a half years, and production may increase by about a third to more than 700,000 barrels a day by 2026 as a result, he said.

“We’re having a renaissance in the North Slope,” Dunleavy said. “We’re pretty bullish on the future of Alaska when it comes to oil.”