Tag Archives: natural gas pipeline alaska

Bye bye oil taxes. Hello gas taxes.

Most of us have been enjoying the glorious summer and trying to forget the last two oily legislative sessions. Trying to forget the endless committee hearings, the excruciating testimony from oil executives. Progressivity. Hyperbolic curves. Internal rates of return. Capital expenditures. New producer areas, etc …

While we have been catching fish and amnesia, ExxonMobil is rumored to be hard at work trying to convince Gov. Sean Parnell to call a special session this fall to create a statutory framework to establish and provide authorization to negotiate issues related to gas commercialization.

In other words, just when you thought it was all over, now gas taxes are going to again rear their gaseous heads.

Currently, gas is taxed at an effective rate of 35 percent prior to credits, roughly the same rate as oil. But it’s much less valuable.

According to sources, Parnell isn’t going for the special session idea. He’s upset, they say, that Exxon hasn’t committed enough resources this summer to advance the fabled, up to $65 billion large diameter natural gas pipeline.

In a press release sent last month, Parnell said that although there was progress being made, the companies aren’t “moving as quickly as Alaskans expect.”

Still, Exxon, the North Slope’s biggest gas lease holder, continues to push, and is trying to convince the other major producers — BP and Conoco Phillips – – to push with them.

The Department of Natural Resources has engaged a contractor to model various tax regimes. Acting Commissioner Joe Balash and Department of Revenue’s Mike Pawlowski are said to be working with the contractors and meeting with the producers.

It’s unclear if Exxon’s push has to do with the large diameter line, the one that has been dreamed about for more than 30 years. Or if the push is about the bullet line that’s supposed to bring natural gas to Alaskans if the big line doesn’t.

Or if has to do with the 200 million barrels of liquid condensates at Point Thomson. By 2016, Exxon expects to be producing 10,000 barrels of condensates per day at the Point Thomson site. Condensates are kind of a liquid gas. As it stands, when they are produces they will be treated like gas for royalty purposes but will be taxed like oil.

Perhaps it’s all of the above. One thing’s for sure: if it there isn’t a special session to deal with gas taxes they will be dealt with in the next session. And the committee hearings again will be endless and excruciating.

Contact Amanda Coyne at amandamcoyne@yahoo.com