Legislature(2011 - 2012)SENATE FINANCE 532
04/06/2012 01:00 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB192 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 192 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 6, 2012
1:04 p.m.
1:04:48 PM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 1:04 p.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Senator Cathy Giessel; Damian Bilbao, Head of Finance,
Developments and Resources, BP; Tom Williams, Senior Tax
and Royalty Counsel, BP; Senator Tom Wagoner; Bob Heinrich,
Vice-President, Finance, ConocoPhilips, Alaska; Scott
Jepsen, Vice-President, External Affairs, ConocoPhilips,
Alaska; Representative Les Gara; Dale Pittman, Production
Manager, ExxonMobil, Alaska
PRESENT VIA TELECONFERENCE
Todd Abbott, President, Pioneer Natural Resources, Alaska,
Anchorage
SUMMARY
SB 192 OIL AND GAS PRODUCTION TAX RATES
SB 192 was HEARD and HELD in Committee for
further consideration.
SENATE BILL NO. 192
"An Act relating to the oil and gas production tax;
and providing for an effective date."
1:06:34 PM
DAMIAN BILBAO, HEAD OF FINANCE, DEVELOPMENTS AND RESOURCES,
BP, introduced himself.
TOM WILLIAMS, SENIOR TAX AND ROYALTY COUNSEL, BP,
introduced himself. He noted that he worked as the
Commissioner for the Department of Revenue (DOR) for the
State of Alaska thirty years prior.
Mr. Bilbao displayed the PowerPoint Presentation, "British
Petroleum (BP) Testimony to Senate Finance."
Mr. Bilbao looked at slide 2, "Key Messages."
CSSB 192(Fin):
íLVDWD[LQFUHDVHWKDWZLOOFDXVHXVWRUH-evaluate
existing activity plans.
íLVQRWPHDQLQJIXODQGZLOOQRWOHDGWRPRUH
investment.
íOLNHO\WRFUHDWHPLVDOLJQPHQWEHWZHHQSURGXFHUV
that slows/stops activity.
íFUHDWHVPRUHGLVLQFHQWLYHWKDQ$&(6WRinvest in the
long-term.
Co-Chair Stedman requested a definition of the range of
reference. Mr. Bilbao replied that he would address it in a
later slide.
Co-Chair Stedman looked at the word "misalignment", and
requested further explanation. Mr. Bilbao replied that by
having a different target from each producer could
potentially direct investment to a field that could better
achieve that project. He stressed that the producer would
shift to a field that would better achieve its target.
Co-Chair Stedman agreed that a tax increase was a
disincentive. He stressed that there were issues related to
cost and "full-cycle" economics. He referred to earlier
testimony related to the analysis of full-cycle economics.
Mr. Bilbao replied that a tax increase would cause BP to
re-evaluate production and exploration activity.
Mr. Bilbao discussed slide 3, "CSSB 192 (version T) Will
Not Draw More Investment." He remarked that CSSB 192
(version O) was not attractive. He stated that graphs were
provided by PFC Energy, and felt that there was not enough
production incentive in CSSB 192.
1:13:56 PM
Co-Chair Stedman noted that each tax structure increased
tax flow to the companies. Mr. Bilbao responded that CSSB
192 would be a larger tax increase than the Alaska Clear
and Equitable Share Act (ACES).
Senator Thomas wondered if a meaningful incentive would be
a $2 billion addition to the price of the current oil
price. Mr. Bilbao replied that achieving a level of
meaningful tax change would return money that would
otherwise go to the State to the producers to incrementally
invest back into production.
Co-Chair Stedman remarked that there were three entities
that were the focus when engaging in tax discussions:
industry, federal government, and the state. He stressed
that a $2 billion shift back to the industries, as outlined
in HB 110, would also be contributed to the federal
government. He noted testimony from consultants that
stressed no need for significant change. Mr. Bilbao replied
that the assumptions were based on how the costs were
modeled. He stated BP took a different perspective, and
felt that tax change would encourage and enhance
competition in Alaska.
1:18:45 PM
Mr. Williams looked at slide 4, "CSSB 192 (version O) is a
Tax Increase." He stated CSSB 192 was a tax increase at oil
prices that affect project economics. He remarked that over
time, the resources would deplete. He stressed that oil
fields stop producing, before all the oil is taken from the
ground. It stops because of substantial cost increases to
obtain the resource as the resource is depleted. He
stressed that eventually the cost of getting the barrel out
of the ground, is the same as value of the oil once it is
out of the ground, so money would be lost. He explained
that the graph showed curves that assumed that the cost per
barrel is maintained, but stressed that costs would not
remain the same per barrel in real terms. He noted that
between $70 and $130 per barrel there was a "dolphin fin",
because there was a gross tax impact on revenue. He pointed
out that 20 to 30 percent of industry production costs were
not deductible under ACES, because of the 21 categories of
costs that were disallowed in statute.
Co-Chair Stedman looked at the value in the FY 13
projections, which was $22 billion gross. He understood the
issue of declined production and increased costs, but
pointed out that there was a $2 billion increase related to
a volume problem. Mr. Williams replied that the costs for
the new production of heavy oil would be higher than the
current costs.
Co-Chair Stedman furthered that there was some analysis of
incremental production with a lower progressivity charge,
and conversations related to incentivizing heavy oil. He
stressed that the industry was not ready for heavy oil
incentives, because the industry did not know what
financial burdens heavy oil extractions would incur. He
expressed concern regarding the industry's refusal to
disclose its target range; therefore the legislature was
incapable of determining the economics for the individual
oil companies. He stressed that the consultants were
willing to work with the companies to analyze the
economics, but understood that there were disagreements
regarding the imbedded cost issues. Mr. Bilbao replied that
BP was attempting to provide a range of costs, but was
careful about disclosing their confidential planning price.
He felt that the range was accurate, and what was
represented was starting point.
1:32:15 PM
Co-Chair Stedman referred to a "hypothetical amendment"
stating that the profit level should just be split, and the
government take should not level out. Mr. Bilbao replied
that any shift above $120 per barrel would not affect the
way BP looked at their business. He stated that BP was
basing their assumptions on experience and planning. Mr.
Bilbao furthered that it would be premature for BP to
determine incentives for heavy oil production, and noted
that the focus was on efficiency. He remarked that the only
way heavy oil could be produced is if there was enough
light oil to dilute the heavy oil to efficiently flow along
the Trans-Alaska Pipeline (TAPS).
Mr. Williams added that progressivity was becoming a tax on
the gross value, without regard to the cost of oil
extraction. He felt that the problem with the gross tax was
similar to the problem with the gross royalty, because
there was no recognition of the change in the margin per
barrel, which could result in zero profits in an older
field.
Co-Chair Stedman stated that the projection in FY 13 was
$5.8 billion in total costs, with $22 billion in gross
revenue, and $7 billion in transportation, at $110 per
barrel. He felt that the analysis needed to be run in
dollars, because there were blended costs and broad legacy
field calculations. He reiterated that a full-cycle
economic analysis needed to be run to determine the rate of
return to net present value. He pointed out that the
analysis of ACES was currently different that when it was
passed, because the price of oil had almost doubled. He
stressed that Alaska had the second largest oil field in
North America, and wanted to be sure that there was a
severance tax.
1:40:41 PM
Mr. Williams stated that the legislature had originally
created a presumption that could not be rebutted: 300
barrels a day were needed to break even, and 1989
legislation changed that problem.
Co-Chair Stedman stated that he would like to focus on
dollars, rather than barrels. He pointed out that he did
not want the state to be placed at a disadvantage. Mr.
Bilbao suggested that there be an analysis of the economics
below $125 per barrel. He stressed that if there was a
fixed cost per barrel, and production decreased, costs were
going to decrease. He felt that there should be an analysis
run of the low base-cost from an industry perspective.
Co-Chair Stedman understood, and noted that there would be
a factoring of the inflation index. He stated that his
current numbers showed that operating expenditures (OPEX)
were running flat, with declining volume.
Mr. Bilbao discussed slide 5, "Unintended Consequences." He
noted the Incremental Production Incentives:
Issue: Economic Risk. Concept: Existing production
from the legacy fields is the foundation for North
Slope present and future; SB 192 penalizes the base
business. Impact to the state: Weakens the foundation
of the Alaska economy.
Issue: Likely misalignment between operators. Concept:
SB 192 provides each producer with a different
production target; creating misalignment around
projects. Impact to the state: Delay of short-term
projects.
Issue: Short versus long-term focus. Concept: SB 192
provides a financial incentive to shift effort and
resources away from long-term projects in support of
short-term rate. Impact to the state: Delay of long-
term projects.
1:49:35 PM
Co-Chair Stedman noted some work by Senator Wagoner
regarding an amendment in the Senate Resources Committee
related to incentivizing incremental production. After the
consultants analyzed the benefit, it was determined that
the incremental benefit was very short-term. He stated that
there should not be an increase to the complexity of the
current structure. Mr. Bilbao replied with slide 6, "What
does meaningful look like." He stated that efficiency,
technology, and tax change would collectively result in
production growth. He explained that no alternative proves
meaningful tax change with a 25 percent base rate. He
remarked that there should be one system for legacy fields
and new fields. He felt that if there were too many
separate tax groups, there was risk of misalignment between
the groups. He stressed that there should be no distinction
between legacy fields and new fields. He pointed out that
most production would be from the existing legacy fields,
but the natural decline of the legacy fields was about 15
percent per year. He stated that billions of dollars were
spent to maintain the decline at 6 percent per year. He
felt that providing incentive for production somewhere
other than a legacy field, failed to recognize a
misalignment with other producers. He proposed a similar
structure to CSSB 192, with a base rate of 22.5 percent, a
minimum tax of 5 percent, and the base rate would be in
effect until $80 at which point the progressivity would
initiate at 0.2 percent. The 0.2 would max out at $130 per
barrel at 10 percent, at which point the progressivity rate
would rise to 0.1 percent and max out 50 percent at $180
per barrel. He felt that this proposed structure would
provide a meaningful impact in the price per barrel horizon
that BP used to look at the projects in the base business.
1:54:13 PM
Mr. Williams stressed that the base tax rate had "gone too
far." He felt that the challenge was to fix the future of
oil development.
Co-Chair Stedman would like to focus on the cash flow, and
wondered how much cash would be moved around in BP's
proposal. Mr. Bilbao replied that the proposal was very
similar to HB 110.
Co-Chair Hoffman looked at slide 4, and felt that there was
a contradiction in slide 6. He wondered why there was a
concern regarding progressivity change, if the company did
not feel that progressivity had an impact in their decision
making process. Mr. Bilbao agreed that there was not a
substantial concern regarding progressivity, but there was
an attempt to create something that could enhance what the
committee had already constructed.
Co-Chair Hoffman wondered if BP would ask for additional
tax rate reductions if the price of oil reached $170 in the
next five years per barrel. Mr. Bilbao replied that he
would be surprised to see the price of oil rise to $170 per
barrel, but felt that $170 per barrel would be good for the
industry and the State. He stressed that BP would encourage
Alaska to remain as competitive as possible in the
international market. He stressed that Alaska was currently
one of the least attractive destinations for investment on
the planet.
2:00:19 PM
Co-Chair Hoffman remarked that discussions in structuring
ACES used projections of $30 to $70 per barrel, with no
concern regarding progressivity percentages above $100 to
$110 per barrel. He felt that the industry would
continually come back to the legislature suggesting tax
rate restructuring, due to continually price per barrel
increases. Mr. Williams replied that in order to avoid
continual industry recommendations, BP proposed a permanent
shift in market prices.
Co-Chair Stedman wondered if the company would be pleased
with this recommendation. Mr. Bilbao replied that the
numbers were looked at a quarterly basis, and the
recommendation was consistent with the change.
Senator Egan wondered if the misalignment would foster
competition. Mr. Bilbao stressed that the misalignment
would provide challenges around short-term decisions. He
felt that the current misalignment impacted budgetary
decisions.
Senator Thomas wondered who needed to agree for the big
projects and investments. Mr. Bilbao replied that the three
major producers in Prudhoe Bay needed to agree, before
advancing projects. He explained that BP made decisions
unilaterally related to the independent fields.
2:05:14 PM
Co-Chair Stedman wondered how much incremental investment
was needed to flatten the decline curve in Prudhoe Bay. He
stated that there had been testimony in the Senate Finance
Committee that showed an investment of roughly $3 to $5
billion annually. Mr. Bilbao responded that $5 million
dollars a day would be needed to offset the decline to 4 to
6 percent.
Co-Chair Stedman asked if $2 billion would be enough to
offset. Mr. Bilbao responded that the $5 million investment
a day was reflective of the next ten years.
Co-Chair Hoffman noted that CSSB 192 would give $1.25
billion to the industry, and wondered what BP's proposal
would give the companies. Mr. Bilbao replied that BP's
estimation would be consistent with HB 110.
Co-Chair Stedman wondered if an incremental analysis should
be run on the current economics. Mr. Bilbao replied that
anything that could the state could do to better understand
investment in Alaska would be beneficial.
Co-Chair Hoffman noted that if BP's proposal was close to
HB 110, the benefit would be closer to $2.4 billion as
opposed to the CSSB 192 $1.25 million return to the
industry.
Co-Chair Stedman pointed out that $277 million would be
going out of the state treasury, but that the proposal
would decrease government take by $2 billion.
Mr. Bilbao encouraged the committee to consider the
increased revenue and production, if there was substantial
tax rate restructuring. If there was additional production,
there would be additional government take that would not
reduce, minimize, or entirely offset government take from a
tax decrease.
2:12:19 PM
AT EASE
2:22:04 PM
RECONVENED
BOB HEINRICH, VICE-PRESIDENT, FINANCE, CONOCOPHILIPS,
ALASKA, introduced himself.
SCOTT JEPSEN, VICE-PRESIDENT, EXTERNAL AFFAIRS,
CONOCOPHILIPS, ALASKA, introduced himself.
2:23:27 PM
Mr. Jepsen displayed the PowerPoint Presentation, "CSSB 192
Observations." He looked at slide 2, "CSSB 192-
Observations."
-Tax rate on base still too high.
-New oil incentive insufficient to offset high base
tax rate.
-Floor represents a tax increase at low prices
-Indexing is a positive step.
-CSSB192 insufficient to improve the investment
climate and attract capital necessary to stem the
decline.
Mr. Heinrich looked at slide 3, "Government Take Comparison
vs. ACES." He stated that the graph addressed a range of
prices. He declared that government take included state
production taxes, royalties, property taxes, state income
tax, and federal income tax. He stated that the analysis
was conducted prior to the modeling of the progressivity
trigger point indexation, but that progressivity had no
impact on FY 13. He explained that the red line represented
ACES, the yellow line represented CSSB 192, and the blue
line represented HB 110. He stressed that the high minimum
gross revenue tax, at 10 percent, had a significant effect
on the government rate. He looked at the current price
range, $80 to $100 per barrel, ACES was highly unattractive
competitive with minimal benefit from a reduced government
take to incentive additional investment.
Co-Chair Stedman noted the proposed shift of $142 million
loss to the state in FY 13 that was represented in the
chart. Mr. Jepsen replied that the State's revenue would
actually increase to $1.5 billion, so the share that would
return to the producers was a small share of the government
take.
Co-Chair Stedman noted the freezing of the split of profit
oil, queried ConocoPhilips' position regarding the profit
split. Mr. Heinrich replied that the progressivity aspect
of ACES was not beneficial at any cost per barrel. The
benefit should be moved to the lower end of the scale. Mr.
Jepsen furthered that ConocoPhilips would like a tax
framework that had a sufficient split of share between the
producers and the state in any price environment. He
stressed that there should be a homogenized system, that
did not split different fields, projects, new, or old oil;
rather one that provided incentives to make investments
under any price environment for the best economic projects
for the companies.
2:29:58 PM
Co-Chair Hoffman noted that there were many consultants who
had declared that there were no problems with ACES, and
industry always commented that ACES need to be fixed on the
high end. He wondered why the consultants would be wrong
with the current prices at $100 to $110 per barrel. Mr.
Jepsen replied that the consultants were not investing
money. The producers were looking at opportunities in the
Lower 48 and other locations around the world, and Alaska
was not attractive for the incremental capital investment
in other jurisdictions.
Mr. Heinrich reiterated that Alaska was not able to attract
the investment it needed.
Mr. Jepsen stressed that the industry was currently in the
high price environment, and there was no change in the
investment climate.
Co-Chair Hoffman pointed out that Alaska was in harvest-
mode for many years. Mr. Jepsen replied that the production
in Prudhoe Bay was in decline since 1989. He felt that
Alaska was not currently in harvest-mode.
Co-Chair Stedman noted the recommendations from consultants
that there should be 70 to 75 percent government take for
legacy fields. He noted that the chart did not have the
government take exceeding 75 percent. Mr. Jepsen replied
that the consultants were not making the investment
decisions.
2:36:35 PM
Co-Chair Stedman wondered how the decline would flatten out
in Kuparuk. Mr. Jepsen responded that ACES was not allowing
ConocoPhilips the opportunity to devote the resources
necessary to devote money to specific projects. He stated
that the geologists, geophysicists, engineers, and drillers
felt that Kuparuk was "opportunity rich." However, Alaska
did not provide an attractive enough investment climate to
develop those projects. He felt that HB 110 would encourage
investment.
Co-Chair Stedman looked at the graph on Slide 3, and noted
the $2 billion negative spread to the State under HB 110.
He stressed that if $2 billion was taken from the treasury,
he wanted to be certain that the industry was going to
invest. Mr. Heinrich agreed.
2:41:04 PM
Co-Chair Stedman wondered what it would take to stabilize
Kuparuk. Mr. Jepson replied that increased drilling was
required to revitalize Kuparuk. He noted that increased
investment would provide more revenue for the State.
Mr. Heinrich discussed slide 4, "State/Industry Share." He
stated that the data was from the current Department of
Revenue Sources Book. He stressed that there was no
representation of the benefit from the indexation of the
trigger points, and only represented the base progressivity
elements of the gross tax. He stated that the x-axis was
the Alaska North Slope crude oil price; the solid red and
green lines represented the Alaska and producer share at
the industry under ACES; the diamond-marked lines
represented the Alaska and producer share under CSSB 192;
the triangle-marked lines represented the Alaska and
producer share under HB 110; and the dashed lines
represented the severance tax structure, which was a 25
percent net margin tax under CSSB 192. He stated that the
Alaska share represented royalties, production taxes,
property taxes, and state income tax. The producer share
had a deduction of federal income tax. He pointed out that
CSSB 192 was virtually "on top" of ACES in the low price
environment below $105 per barrel.
Co-Chair Stedman requested a restatement. Mr. Heinrich
stated in CSSB 192, there was very little improvement as
prices increased in the $120 per barrel price range, making
industry earnings "essentially flat."
2:48:17 PM
Mr. Jepsen looked at slide 5, "Production Incentive."
-New production incentive insufficient to overcome
high base tax rate.
-All new production investments challenged by costs
and smaller targets.
-Maintaining base decline will require more investment
over time.
-Increases complexity.
-Production incentive does not go as far as HB 110.
Co-Chair Stedman wondered if there was something wrong with
the economics that the legislature was analyzing. Mr.
Jepsen replied that there were not simple variables related
to hypothetical projects. He stated that the industry
analyzed margins and potential upsides. He stressed that
ACES and CSSB 192 did not provide the same kind of "upside"
that was available in other jurisdictions.
Co-Chair Stedman felt that he did not have the same
information that ConocoPhilips used to present their
opinions. Mr. Jepsen stressed that the analysis was similar
to the Department of Revenue, but financial projections
within the company were confidential.
2:58:52 PM
Senator Thomas wondered if ConocoPhilips had utilized local
contractors and sub-contractors. Mr. Jepsen replied that
Alaska Hire would continue to be a focus. He agreed to
provide more detailed information regarding Alaskan hiring
statistics.
Senator Thomas noted that PFC did not reference Alpine, and
wondered if ConocoPhilips considered Alpine to be Colville
River. Mr. Jepsen affirmed that ConocoPhilips considered
Alpine to be Colville River.
Co-Chair Stedman noted that the magnitude of the spread at
$120 per barrel, HB 110 would provide a cash increase to
the companies to approximately $1.3 billion. He stressed
that there was a significant difference between HB 110 and
CSSB 192 that needed to be reconciled. Mr. Jepsen replied
that CSSB 192 needed to be recalibrated.
3:03:09 PM
RECESS
4:42:58 PM
RECONVENED
DALE PITTMAN, PRODUCTION MANAGER, EXXONMOBIL, ALASKA,
recognized the work of the committee's work in organizing
SB 192. He stressed that the current tax system was not
designed to incentive significant increases in investment.
He felt that CSSB 192 was an improvement over ACES, but
still fell "far short" in creating the kind of significant
changes in development investment that was needed by the
state. He encouraged the committee to look at all oil
fields, especially the legacy fields. He felt that the
long-term and near-term future was in the legacy fields. He
continued to thank the committee for their work in
analyzing the tax system restructuring.
Co-Chair Stedman requested a discussion regarding the
needed capital investment to stabilize the production
decline. Mr. Pittman felt that there needed to be
encouragement to continue to invest in legacy fields. He
could not address an exact tactic to stabilize the decline.
Co-Chair Stedman referred to the incremental policy
discussion, and pointed out how the producers were
separated in CSSB 192 according to a calculated decline
curve and a lower progressivity on the incremental
production above the forecasted decline curve. Mr. Pittman
stressed that there were some unintended consequences when
determining tax incentives. He felt that the principle for
new volume investments was good policy, but added that
there would be some disagreement in how to incorporate that
policy.
Senator McGuire referred to testimony from PFC Energy
regarding setting a decline curve. She wondered if there
were concerns from ExxonMobil regarding a set decline curve
in other jurisdictions. Mr. Pittman was not aware of any
jurisdictions in ExxonMobil's business that had set decline
curves.
4:55:38 PM
Co-Chair Stedman pointed out that there was a $180 million
shift to the industry in CSSB192 at $120 per barrel Mr.
Pittman felt that $200 million was a large sum of money,
but encouraged the committee to understand that ExxonMobil
was a large company and $180 million was small on the broad
scope.
Co-Chair Stedman felt that there should be a positive
insurance from the industry that there would be a return,
if there was a significant tax change.
Co-Chair Stedman queried Mr. Pittman's thoughts related to
incentivizing a specific carbon stream. Mr. Pittman replied
that cost allocation could be intensive, but felt that
there would be some consequences to the industry, and would
be detrimental to the state.
5:01:41 PM
TODD ABBOTT, PRESIDENT, PIONEER NATURAL RESOURCES, ALASKA,
ANCHORAGE (via teleconference), thanked the committee for
the work regarding SB 192.
Mr. Abbott noted that Pioneer Natural Resources entered the
Alaska market in 2002. He pointed out that Pioneer was the
first independent operator on the North Slope in 2008. He
stated that Alaska was less competitive now than it was in
2002, because of the lower risk high margin project
elsewhere in the United States. Alaska had many
geographical, logistical, climate, and financial
challenges. He declared that Pioneer had a large inventory
of opportunities in the Lower 48, and those projects were
easier to execute and bore a lower tax burden than the
Alaska projects. He stated that Pioneer had invested $2.1
billion in Texas oil production, versus $135 in Alaska. He
stated that the cost of logistics for finding, developing
and producing the North Slope projects, put those projects
at an immediate disadvantage. He explained that the current
tax system and the proposed version had widened the divide
with the Lower 48, and Alaska's disadvantage was growing as
oil prices increased.
Mr. Abbott addressed the gross progressivity feature of SB
192 was counterproductive, and did not make Alaska
competitive with the domestic partners. He did not feel
that CSSB 192 encouraged investment behavior. He felt that
the three tier progressivity system made some reductions in
the government take, but did not make Alaska competitive
with the domestic alternatives in the Lower 48. He believed
that the proposed structure inherently discouraged
investment on the higher cost, more difficult opportunities
that remained on the North Slope; therefore, lowered the
probability of new fields coming online. He stated that
Pioneer had supported meaningful and significant production
tax reform since the adoption of ACES. While some features
of the current proposal were attractive, the progressivity
remained "broken."
5:06:47 PM
Co-Chair Stedman wondered what would be beneficial in order
to enhance investment. Mr. Abbott replied that the
environment was difficult in Alaska, and there were
difficult challenges. There needed a larger accumulation in
a more productive well in Alaska, versus smaller wells in
Texas, even before taxes. He felt that given the risks and
disadvantages in Alaska, there needed to be a more generous
tax structure than one in the Lower 48.
Co-Chair Stedman noted that the small producers faced some
issues facing a marginal spread, and wondered if Pioneer's
profit would balance out in the processing facilities. Mr.
Abbott responded that Pioneer produced into the
ConocoPhilips station, and ConocoPhilips had a fair working
relationship with Pioneer.
SB 192 was HEARD and HELD in Committee for further
consideration.
5:11:00 PM
Co-Chair Stedman discussed housekeeping.
ADJOURNMENT
5:11:41 PM
The meeting was adjourned at 5:11 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 192 4-06-12 BP Testimony to SFC.pdf |
SFIN 4/6/2012 1:00:00 PM |
SB 192 |
| SB 192 4-10-12 Revision to 4-06 BP-Bilbao Slides for SFC.pdf |
SFIN 4/6/2012 1:00:00 PM |
SB 192 |
| SB 192 4-10-12 Syring signed letter of correction.pdf |
SFIN 4/6/2012 1:00:00 PM |
SB 192 |