Would Natural Gas Tax on North Slope Push Big Oil?

Anchorage Daily News

Published: November 29th, 2008 04:00 AM
Last Modified: November 29th, 2008 09:01 AM

Backers of a proposed voter initiative to impose a state tax on natural gas reserves got clearance to start collecting signatures to put the idea on the ballot, the lieutenant governor's office said.

The backers hope that by taxing the North Slope's huge gas reserves, the oil companies there will push ahead faster on plans for a multibillion-dollar gas pipeline project. They want the initiative on the 2010 ballot.

The state Department of Law reviewed the initiative proposal and concluded it was in the proper form, although the department said the proposal has numerous ambiguities and could be difficult to implement as a law if voters approve it, the lieutenant governor's office said.

Key backers are Democratic state Reps. Harry Crawford of Anchorage, David Guttenberg of Fairbanks and Beth Kerttula of Juneau. Their proposal calls for a 3-cent tax on every thousand cubic feet of known gas reserves in very large fields in Alaska. The North Slope has about 35 trillion cubic feet of gas reserves -- resulting in a potential tax levy of about $1 billion a year. But the proposed law would exempt from the tax any gas committed for shipment through a pipeline once it's built.

North Slope oil companies produce natural gas with oil now. They use the gas to power the oil fields and coax more oil from the ground. But they are not shipping it out to markets outside the state for lack of a gas pipeline.

With the lieutenant governor's approval in hand, the initiative backers have one year to gather the thousands of signatures from across the state for the initiative to be placed on the ballot.