Contact the Governor
Frank H. Murkowski
Juneau Office
P.O. Box 110001
Juneau, AK 99811
907-465-3500 phone
907-465-3532 fax
State info 907-465-2111
Anchorage Office
550 West 7th Avenue, Suite 1700
Anchorage, AK 99501
907-269-7450 phone
907-269-7461 fax
State info 907-269-5111
Kenai Office
11312 Kenai Spur Hwy, Suite 2
Kenai, AK 99611
907-283-2918 phone
907-283-3037 fax
Mat-Su Office
877 Commercial Drive
Wasilla, AK 99654
907-352-2585 phone
907-352-2526 fax
Fairbanks Office
675 7th Avenue, Suite H5
Fairbanks, AK 99701-4596
907-451-2920 phone
907-451-2858 fax
Washington DC Office
444 North Capitol NW, Suite 336
Washington, DC 20001-1512
202-624-5858 phone
202-624-5857 fax
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Volume 7March 27th, 2006
Petroleum production tax continues to move forward
The proposed petroleum production tax introduced by Governor Murkowski this session is arguably the single most
important piece of legislation in Alaska in the last 30 years. The Governor's proposal crafts a balance between
the short-term need for fair tax revenue and the long-term vitality of Alaska's oil and gas industries.
Committee substitutes in both houses continue to work their way through the process. The House version of the
Governor's proposal has moved to the Finance Committee, with hearings taking place today. In the Senate, a
committee substitute is being deliberated in the Senate Resources Committee and is expected to move out soon.
Finding the balance between tax revenues and encouraging investment is important because the oil and gas resources
in Alaska are in decline. The current life span of the North Slope oil fields is roughly another 25 years, declining
six percent annually. With added exploration and development we can push out an additional 20 years to 2050.
The long-term value to Alaska of extending the life of our petroleum industry and increasing production by holding
the rate of decline down must be weighed against the short-term gain from higher taxes. The Governor's proposal is
a good balance between increasing Alaska's share of oil wealth at higher prices while encouraging new investment
over the long haul. A 20 percent tax rate on production doubles the effective production tax rate and would provide
up to $1 billion to the state each year in added annual revenue based on current oil prices.
Finally, the Governor's proposal, which the industry has reluctantly agreed to support, will provide the basis
for a fiscal contract with industry that will lead to the construction of the gas pipeline that will truly underwrite
the Alaskan economy for years to come.
For more information on the Governor's petroleum production tax proposal, visit the Governor's petroleum production tax
website. I encourage you to contact your Legislators, who can be reached via phone, fax, mail and email about this
important proposal.
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