February 26, 2010 – In testimony before the Senate Finance Committee on Wednesday, Department of Revenue Commissioner Pat Galvin told the legislature for the first time that under likely pricing scenarios a pipeline through Canada will result in the State losing, not making, money.
According to Bill Walker, Republican candidate for Governor, “this should remove any doubt the State must withdraw from AGIA immediately and pursue North Slope gas exports to the world markets.”
“It appears that Governor Parnell’s plan will accelerate the loss of state revenues at a time when we should all be working together to come up with solutions that will off-set declining oil production on the North Slope,” Walker continued. “Our future will remain in jeopardy as long as the Governor and his administration continue to ignore the economic realities of a changing world. The people of Alaska deserve a leader who is willing to admit when he is wrong and Governor Parnell is dead wrong on the one issue most critical to the economic future of Alaska.”
Under AGIA, Governor Parnell’s plan attempts to shift the consequence of Canadian price collapses from the North Slope producers to the State. The primary benefit of a gas pipeline to Alaskans, other than providing access to affordable energy for in-state use and industrial use, is that taxes and royalties from gas sales will offset those from declining oil production.
Yet Commissioner Galvin has indicated that under likely pricing scenarios a pipeline through Canada will result in the State losing potentially $2 billion per year as a result of the unalterable tax structure of AGIA which gives huge tax breaks on North Slope oil to Exxon, BP and ConnocoPhillips when Canadian gas natural gas prices are low. This scenario would be locked in for 10 years, resulting in a $20 billion loss to state revenues.
“Natural gas prices are low now and will remain this way for years to come due to the discovery and development of shale gas in North America. Governor Parnell’s continued effort to mislead the Alaskan people about the viability of the lower-48 market is not just out of touch – it is out of line.”
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Walker Says Governor should act now to remove us from the failed AGIA process
March 10, 2010
February 26, 2010 – In testimony before the Senate Finance Committee on Wednesday, Department of Revenue Commissioner Pat Galvin told the legislature for the first time that under likely pricing scenarios a pipeline through Canada will result in the State losing, not making, money.
According to Bill Walker, Republican candidate for Governor, “this should remove any doubt the State must withdraw from AGIA immediately and pursue North Slope gas exports to the world markets.”
“It appears that Governor Parnell’s plan will accelerate the loss of state revenues at a time when we should all be working together to come up with solutions that will off-set declining oil production on the North Slope,” Walker continued. “Our future will remain in jeopardy as long as the Governor and his administration continue to ignore the economic realities of a changing world. The people of Alaska deserve a leader who is willing to admit when he is wrong and Governor Parnell is dead wrong on the one issue most critical to the economic future of Alaska.”
Under AGIA, Governor Parnell’s plan attempts to shift the consequence of Canadian price collapses from the North Slope producers to the State. The primary benefit of a gas pipeline to Alaskans, other than providing access to affordable energy for in-state use and industrial use, is that taxes and royalties from gas sales will offset those from declining oil production.
Yet Commissioner Galvin has indicated that under likely pricing scenarios a pipeline through Canada will result in the State losing potentially $2 billion per year as a result of the unalterable tax structure of AGIA which gives huge tax breaks on North Slope oil to Exxon, BP and ConnocoPhillips when Canadian gas natural gas prices are low. This scenario would be locked in for 10 years, resulting in a $20 billion loss to state revenues.
“Natural gas prices are low now and will remain this way for years to come due to the discovery and development of shale gas in North America. Governor Parnell’s continued effort to mislead the Alaskan people about the viability of the lower-48 market is not just out of touch – it is out of line.”