Classifieds | Place a class ad | PDF Edition | Calendar | Discussions | Moderated Chat | Home Delivery| How to cancel
An escrow-type account could greatly ease the concerns over Alaska's oil taxes reform.
The oil companies operating here don't want to guarantee more production in Alaska; the state wants increased production and is willing to provide incentives to get it.
What better way to encourage than to reward production with cash?
Gov. Sean Parnell and the state Legislature worked through reforms this session, and Senate Bill 21 has been delivered to the House for its input. With the session just days from its end, oil tax legislation is likely.
SB 21 would have Alaska give up billions in revenue, hoping for the best. Instead, the state could approve a new tax structure while continuing to collect revenue under the current one — ACES (Alaska's Clear and Equitable Share).
The difference between ACES and the new structure would go into an escrow account.
Then if the oil companies raised production by specified amounts, they would be paid a production rebate from the escrow account based on the new tax structure.
No new production, no rebate.
There's no complicated formula, either. The sole performance measurement would be oil through the oil pipeline — the Parnell administration's only stated goal in this entire debate.
This is cash for results, a proven business strategy, which would give Gov. Parnell and legislative leaders pushing for oil-tax reform much better odds of more oil production and legislators fearful of reduced revenue a financial safety net.
If not this, the state might as well take Alaska's money to Las Vegas and let it ride on one roll of the dice at the craps table. We know what the odds of success would be there.