Please explain how loopholes in the existing law will increase our current state deficit and are unfair to Alaskans and to new producers.

SB21 includes loopholes that decrease Alaskans’ share of production revenue and create an uneven playing field for new producers. These loopholes permit costs from unrelated fields to be deducted from our share of profits from the largest legacy fields. These loopholes are unfair to Alaskans and to new producers.

For example, as ConocoPhillips develops several new fields in the National Petroleum Reserve-Alaska (NPR-A), it will be able to deduct its NPR-A costs from Alaskans’ share of production revenues from the Prudhoe Bay field. This makes no sense. Alaskans should not be subsidizing the development of federal lands in which they do not have a royalty interest, and each field must stand on its own to be fair to Alaskans and to new producers.

As the result of these loopholes, Alaska’s production revenues will decrease by an additional $300 million per year for most of the next decade as ConocoPhillips develops NPR-A. Stated differently, unless the Fair Share Act becomes law, our state deficit will increase by an additional $300 million per year simply because of these loopholes in the existing law.

The Fair Share Act will only permit the costs related to each of the major legacy fields to be deducted from our share from those fields. This will be fair to Alaskans and to new producers. This will also prevent our state deficit from increasing by an additional $300 million per year.