As Alaskans prepare to vote on another oil tax ballot measure, it’s a good time for a refresher on the details of our oil industry, what it has done, and will continue to do, for our state.
The oil industry is a key part of Alaska’s economy:
- Alaska is the only state that does not have a state sales tax or a personal income tax.
- Revenues from Alaska’s oil industry have funded most of the state government for several decades.
- Since 1982, every eligible state resident has received an annual dividend that is based on the value of oil royalty revenue in the Alaska Permanent Fund.
- The state’s North Slope contains 6 of the 100 largest oil fields in the United States.
- Alaska’s Prudhoe Bay field is among the 10 largest oil fields in the nation.
There’s more to come:
- Alaska’s proved crude oil reserves—about 2 billion barrels at the beginning of 2018—were the sixth largest of any state.
- Large areas of the state remain unexplored for oil.
- In 2017, oil exploration and drilling were no longer prohibited in the Arctic National Wildlife Refuge (ANWR).
- The U.S. Geological Survey estimates the ANWR coastal plain holds 10.4 billion barrels of crude oil.
- The U.S. Energy Information Administration (EIA) doesn’t expect ANWR oil production to start until 2031 because of the time needed for energy companies to acquire leases, drill exploratory wells, and build the necessary production infrastructure.
We can increase the oil in the pipeline.
- Most of Alaska’s crude oil production occurs on the North Slope.
- The Trans-Alaska Pipeline System, which began operating in 1977, transports crude oil from the frozen North Slope to the warm-water port at Valdez, on Alaska’s southern coast.
- The pipeline can carry more than 2 million barrels per day.
- Actual deliveries have been less than 1 million barrels per day since 2003.
- In 2018, deliveries decreased to 509,000 barrels per day.
- New projects on the North Slope can add barrels to the pipeline and dollars to the state treasury:
- Greater Moose’s Tooth 2 – 35-40,000 BPD
- Willow – 100,000 BPD
- Pikka – 150,000 BPD
Alaskans have demonstrated time and again that their tenacity and pride can overcome most any obstacle. Meanwhile, the state has benefitted from the responsible development of natural resources for over 60 years. With so many projects on the cusp of production, it seems foolish to implement an onerous tax— one that will surely lead to less investment, production and jobs. As you fill in a bubble this November, consider the legacy these partners have had in Alaska and what bright futures lie ahead.