Maybe you should read Alaska’s constitution before you make a comment like that. If the state tax is the determinant of whether to drill or not then the return on investment is not high enough to drill with a reduction as small as that. Sorry, but the major oil companies are finally realizing they have been dragging their feet on production while the smaller oil and gas companies have gone ahead with fracking. They are now trying to play catch-up and trying to negotiate where they have little leverage.
Bad business decisions like Exxon’s purchase of XTO at an exorbitant premium when they could have bought into the domestic US basins at far lower cost leaves it with a legacy corporate issue they have to deal with themselves, not on the back of the Alaskan taxpayer.
Sorry, but the CHK’s and the EQT’s of the world need the tax break more than the XOM’s and CVX’s of the world do. At least they have been drilling all along.
Perhaps you should read it as well. That only deals with the royalties, which is not an issue or a concern. The royalties are in line with other areas.
The problem is the massive taxes piled upon top of the royalties. These taxes are NOT shared with the people, they only fund the government.
As an example, only oil & gas property pays state property tax. No other industry or property pays tax.
At current pricing, the total take for taxes, royalties to all agencies claiming a piece of the action is about 85% of the selling price. It is an insane amount.
It is also the reason places like North Dakota and Texas are booming for oil drilling and watching production rise, while Alaska continues to decline with little new drilling.