How will oil and gas tax credits fare in the Governor’s Budget?

It’s no secret that the current administration is looking at oil and gas tax credits as part of the solution to the state’s large budget shortfall.  When Governor Walker introduces his budget tomorrow- Headlamp expects that a reduction or elimination of credits will be a key component.

The chart below shows some of the items the administration has considered and what the impact might be on the state budget:

 

Target

Savings Target

Notes

Exploration Credits to sunset on 7/1/16  

$0

 

Cook Inlet Drilling Credits

$150m-$200m 

Repurchase Limits

$150m-$200m

Payment Deferred, not eliminated

Interest Rate Increase

$25m

 

* These savings are targets, not hard numbers, and are assessed only on their potential savings in the state budget.  The impacts on industry investment, production, private sector jobs and the Alaskan economy have not been considered. 

When the budget details are released, Headlamp will assess what has been done with tax credits and how it might impact Alaska’ economy.