JUNEAU, Alaska — With oil taxes through the Alaska Legislature, a key Interior senator says it’s now up to the oil industry to produce.
Now that the governor’s bill to cut oil taxes in hopes of staunching the state’s declining oil production is headed to his desk, Sen. Click Bishop says he’s expecting to see production turnaround in two to three years.
“It’s showtime for them,” Bishop said, his office crowded with packing boxes. “In 24 to 36 months, they’ll need to be hitting those marks. ... If they don’t perform, we’re going to know once and for all they’re in harvest mode and they’ll pay the price.”
Bishop was one of 12 senators to sign off on the changes to the oil tax bill the House passed early Sunday morning. The Senate first approved the bill earlier this session with a thin 11-member majority.
The oil industry had been cagey about whether or not Senate Bill 21 was enough to spur increased investment and production on the North Slope. It was a point that opponents to the cuts were quick to point out, but Bishop said he’s confident in the review of the legislature’s consultants.
“We’ve had two very esteemed consultants speak to us and it would defy logic for them not to invest,” he said.
Bishop said he’s set a timeline of between two and three years, which would be within his current term, to see some sort of improved production off the North Slope. If they don’t produce, he said, he’ll be eager to revisit oil taxes.
“Sure, it’s easy to give and it’s hell to get it back, but in this case this is the fifth time now that the public has seen us work on oil taxes,” he said. “The burden of proof and the people of Alaskan have to see increased production and an increase spend.”
Fellow Fairbanks-area Sens. Pete Kelly and John Coghill voted for the oil tax bill both times.
Sen. Lyman Hoffman, D-Bethel and represents parts of Ester and Goldstream Valley, was the lone no-vote from the Interior. Hoffman, a member of the Democratic Minority Caucus and former co-chair of the Finance Committee, said the oil tax bill will cause big deficit spending in the next few years.
“To me, the gamble is just too great,” he said.
Contact staff writer Matt Buxton at 459-7544 and follow him on Twitter: @FDNMpolitics.