Alaska oil industry defends tax credit program

  • Thursday, October 15, 2015 7:49pm
  • News

ANCHORAGE, Alaska (AP) — Alaska’s oil industry trade group has launched an advertising campaign in an effort to defend the state’s oil and gas tax credit program amid criticism from state leaders.

The Alaska Oil and Gas Association’s campaign, which debuted last month, features a new radio commercial urging listeners to visit the group’s website to learn more about the program from “reliable, third-party sources.”

“In short, oil tax credits are an investment Alaska is making today for the next generation of Alaskans,” a video on the site tells viewers, as cartoon coins roll into a slot on the side of a map of the state.

The campaign comes as a state Senate working group has scrutinized the program, which paid $628 million last year to companies on the North Slope, in Cook Inlet and other areas. With Alaska facing its second consecutive $3 billion budget deficit, Gov. Bill Walker’s administration said the program should be scaled back.

The payments to companies working in the Inlet, which totaled about $400 million in 2014, have served as part of an attempt to revive the natural gas industry in the area, following a period several years ago when officials in southcentral Alaska were warning of shortages.

Kara Moriarty, AOGA’s CEO, said the campaign was in part meant to counter what she described as “misinformation” about the credits — that companies, for example, are getting “free money.”

“We want to provide information about what credits have done, how they’ve worked,” she said.

But defending the existing tax credit program in the upcoming legislative session may present more of a challenge for the oil industry.

Anchorage Democratic Sen. Bill Wielechowski said he thought AOGA’s campaign was evidence that “the dynamic has changed pretty significantly.”

Wielechowski, an outspoken critic of the state’s current oil tax program, said leaving the payments to oil companies at their current rate would force lawmakers to use the state’s Permanent Fund to balance the budget.

“I think when you put it that way to people, that’s going to make a difference,” Wielechowski said. “People are going to start paying attention more closely.”

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