Since SB21, Alaskans have paid the producers more in cashable credits than we have received in production revenues. A $1 billion per-year increase is more than fair to the major producers. With this increase, the major producers will actually be paying less on average than they have paid for the past three decades before SB21.
The Fair Share Act makes two changes to the SB21 gross calculation for our three major fields.
- First, it increases Alaskans’ minimum share from 0-4 percent to 10 percent.
- Second, it makes the new 10 percent rate progressive by adding an additional 1 percent for each $5 increase in the price of oil beginning at $50 per barrel, up to a maximum of 15 percent when the price of oil reaches $70 per barrel or more.
Importantly, the Fair Share Act will not apply to other fields until they produce 40,000 barrels per day and 400 million barrels in cumulative total. As a result, it will not impact the development of new fields in Alaska.
Let’s just be honest. Since SB21, Big Oil has made more money from our oil and paid Alaskans less for it than they do anywhere else in the world with major reserves. The Fair Share Act would require them to pay Alaskans a fair share going forward or roughly $1 billion per year more under normal circumstances. They are STILL going to make more than anywhere else – Big Oil isn’t going anywhere!