Oil clout ebbs in Alaska as billions in tax credits are cut

Four decades after unlocking America's biggest oilfield, Alaska and its drillers are drifting apart.

Facing a $3.5 billion budget gap, state lawmakers narrowly voted in June to trim tax subsidies that have saved oil and gas explorers almost $1 billion a year since 2007. Gov. Bill Walker followed that by freezing $430 million in rebates, and proposing more stringent cutbacks that could be approved as early as next year.

State officials say they have little choice, given the drop in oil prices and a flagging state economy. Drillers on the North Slope, the vast Arctic expanse that once led U.S. oil production and still generates a half-million barrels a day, say the policies threaten a nascent turnaround for the industry. A 6-billion barrel discovery announced this week is a sign the current system is working, they say.

"Other states and countries are looking at how we incentivize companies to keep investing," said Kara Moriarty, president of the Alaska Oil and Gas Association, an industry group in Anchorage. "Alaska is looking at just the opposite."

Read more: http://www.houmatoday.com/business/20161007/oil-clout-ebbs-in-alaska-as-billions-in-tax-credits-are-cut