Sunday, May 15, 2016
HB 247: My Senate Finance Testimony
I would like to remind Alaskans and the committee that our Trans Alaska Pipeline was shut down in 2011. We were lucky that Alyeska pipeline, and its contractors were able to bring TAPS back online in a number of days and not weeks or months. The Admiral Tom Barrett, President of Alyeska Pipeline has repeatedly spoke about the challenges of operating a pipeline below 500 thousand barrels per day.
TAPS production is tinkering at 508 barrels per day. The cost of operating TAPS rises as oil production declines. The state and Alaska’s oil producers, who are Alaska’s largest taxpayers and investors, like it or not, our futures are linked. Alaska needs to stop its bipolar relationship with the oil producers, and start acting like the partner it should be.
In closing, I want Alaska to be a player in a world oil market. Unfortunately, Alaska lives in the moment, and not in the long-term. I am not opposed to reducing tax credits to companies who have not contributed a drop of oil into TAPS, or who have not contributed a cent to Alaska’s treasury after years of benefiting from Alaska’s generous oil and gas tax credits.
I am for increasing oil production through the Trans Alaska Pipeline by increasing oil production from existing fields. If we ignore the challenges of low oil production through TAPS we will have an 800-mile piece of Chapstick on our hands.
Oil prices will rebound, and its about how Alaska chooses to manage its checkbook, and our oil production through these challenging times.