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Pushing for larger share of offshore oil and gas revenues

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U.S. Senator Lisa Murkowski – Alaska

Alaska’s Senator Lisa Murkowski put forward new legislation last week that hopes to bring more revenue from oil and natural gas production on Alaska’s outer continental shelf (OCS) back to the state. The bill, S. 1278, will “ensure revenue sharing for the state and coastal communities and invest in the workforce development, science and infrastructure necessary to bring [Alaska’s] resources to market,” said Sen. Murkowski.

In an interview with OAG360®, Alaska Governor Bill Walker said that the state would like to see a larger share of the revenue from offshore operations. “[Arctic exploration] will create some revenue in the private sector, [but] it doesn’t produce any dollars in the state. Sort of unique to Alaska is that our offshore development, we don’t receive any share of that revenue; it all goes to the federal government,” said Walker. “We’re certainly very supportive of safe and responsible offshore development, but we also believe that we as a state should share in the revenues from that.”


To listen to OAG360’s exclusive interview with Governor Walker, click here.


 

2014_Alaska Exploration_Licensing_MapThis new bill will give Alaska a larger piece of the revenue from drilling done further than 6 miles offshore. Alaska currently receives 27% of revenues from oil and gas leasing and production in the area between three and six miles from shore, but does not receive revenue sharing from production beyond that point, according to a release from the Senate Energy Committee.

According to the text of Murkowski’s proposed bill, for the fiscal years 2016 to 2026, 50% of qualifying income will go to a general U.S. Treasury fund, 27.5% will go to the Treasury to be used for deficit reduction, 7.5% will go to a Treasury account to be distributed to Alaska, 7.5% will be sent to a Treasury account to be distributed to Alaska’s coastal counties, 2.5% will be used to carry out North Slope Science Initiative, 2.5% will provide financial assistance for offshore leasing and development programs in Alaska and development of rights-of-way for pipeline, and the remaining 2.5% will be used to provide grants on a competitive basis to eligible institutions of higher education and workforce investment boards in Alaska to provide a skilled workforce for the oil and gas industry.

For every fiscal year after 2027, 50% will go to a general U.S. Treasury fund, 30% will go to a Treasure fund to be distributed to Alaska, 12.5% will be used for low-income home energy assistance, weatherization programs, and infrastructure in the Arctic and 7.5% will be distributed to coastal counties from a Treasury account.

“In the near term, providing energy and revenues to Alaskans requires increasing access in the areas where Alaska already receives revenue sharing like within the six-mile limit,” Murkowski said. “But in the longer term, my legislation will ensure that the state of Alaska and coastal communities supporting development will receive a substantial share of the revenues from production to compensate for impacts from development.”

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.