Parnell tells oil and gas congress he wants cuts in state taxes

ANNUAL MEETING: Governor slams feds for regulatory delays.

Anchorage Daily NewsSeptember 20, 2011 

Gov. Sean Parnell continued to bash the federal government Tuesday and said he's lobbying legislators to pass his proposal for a major reduction in how much the state taxes oil companies. Parnell on Tuesday morning gave the opening address at the Alaska Oil and Gas Congress, an annual petroleum trade gathering being held at the Marriott Hotel in Anchorage.

Parnell, as he commonly does, criticized the federal government for its regulation of oil drilling. He complained that companies are being prohibited from drilling in the offshore Arctic Ocean, the Arctic National Wildlife Refuge and within the National Petroleum Reserve-Alaska.

"A little delay here, a little moratorium there, a little slowdown of permitting, tax increases on an industry that can pull us out of the economic doldrums. This is something that we must change. Our economy and our people cannot afford these political games," Parnell said.

President Barack Obama and Congressional Democrats have been calling for an end to lucrative tax breaks for oil companies. Representatives of the oil and gas industry say that's a tax increase that will make it harder for the companies to invest in new domestic drilling projects.

Interior Secretary Ken Salazar came to Alaska in August and said Obama was an advocate for increased drilling in Alaska, including the National Petroleum-Reserve Alaska, and that his attitude about Arctic offshore drilling was "let's take a look at what's up there and see what it is we can develop." But he said any Arctic offshore drilling would need to be done carefully and that there were painful lessons from the Deepwater Horizon spill in the Gulf of Mexico. Obama opposes oil drilling within the Arctic National Wildlife Refuge.

Salazar emphasized that Obama in July signed an executive order to create a new federal working group tasked with having agencies better coordinate Alaska oil and gas permitting and other regulatory oversight. The White House said the working group is designed to simplify oil and gas decision-making in Alaska by bringing together federal agencies to collaborate as they evaluate permits and environmental reviews on Alaska projects.

Parnell said Tuesday that he met with Salazar during his visit. "But we need something more than just the (federal) leadership telling us that we matter, we need the agency staff to timely make decisions and to work cooperatively to make these decisions," Parnell said.

Parnell did praise this week's news that the EPA would issue an air quality permit for a drilling vessel that Shell hopes to use for offshore Alaska exploration.

Parnell also told the Alaska Oil and Gas Congress that he's working to try and get the Legislature to pass his bill lowering state taxes on the oil companies. Parnell's bill, which the Department of Revenue estimated could result in more than $8 billion in less production tax revenue to the state over the next five years, passed the Alaska House of Representatives this spring. But state senators resisted and the bill didn't make it very far in the Senate.

"I've been speaking individually with legislators about how we can move this bill through the legislative session this year," Parnell said Tuesday. "I told one of them, I have no pride of authorship in the bill, if the personalities of the Legislature won't allow a bill from the governor to pass because of partisan differences or somebody else wants to run for governor, I don't care. I said pass a bill that makes us more competitive," Parnell said.

Parnell told the oil and gas congress crowd that Alaska takes too big of a tax bite at high oil prices compared to other oil regions in the globe and that needs to change. Opponents of Parnell's bill dispute that and cite state labor statistics showing oil and gas employment in Alaska up around record levels and reports of increased exploration on the North Slope. It's an argument that could dominate the next legislative session in January.

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