After speaking directly with Treasury Secretary nominee Jack Lew on the importance of the oil and gas industry to the Alaska and U.S. economies, U.S. Sen. Mark Begich introduced legislation that would share federal energy revenues generated off Alaska’s coasts with Alaska’s state and local governments as well as Alaska’s Native peoples.
“This is just common sense – Alaskans deserve their fair share just like the residents of the Gulf Coast,” said Begich. “My bill not only encourages increased and responsible development of Alaska’s energy resources, but also makes sure our communities benefit directly from oil and gas being produced in our own state.”
Begich’s bill secures a share of federal revenues from offshore oil and gas development for the State of Alaska and Alaska’s coastal communities equal to that provided to Gulf Coast states from drilling in the Gulf of Mexico. It will provide support to state, local and tribal governments for public-sector infrastructure required to develop the resources, address the impacts in affected communities and, if necessary, respond in terms of emergency.
Begich highlighted for Lew the significant revenues federal, state and local governments can secure with expanded oil and gas development in Alaska’s Arctic. In addition to the current federal leases for the Chukchi and Beaufort seas, new lease sales are scheduled for 2015 and 2016.
Begich also expressed concerns to Lew in a meeting regarding longstanding tax incentives for domestic energy production in anticipation of the President’s 2014 budget.
“I conveyed my long-held support of tax reform to Jack Lew today, but I also reminded him that if we really want to fix our convoluted tax code we must look at the big picture instead of singling out politically easy targets,” said Begich.
Begich also expressed support for Lew, who has served as Director of the Office of Management and Budget and spent the last year as the White House of Chief of Staff.
“During his time both at OMB and the White House, Jack has demonstrated the knowledge and experience to be an effective Treasury secretary. I look forward to continuing our conversation about my revenue sharing bill, budget issues, taxes, and other key economic issues.”
Begich’s bill, the Alaska Adjacent Zone Safe Oil Transport and Revenue Sharing Act, requires oil produced in the federal waters of the Chukchi and Beaufort Seas to be brought ashore by pipeline, a method that is safer than tanker transport and secures future throughput for the Trans-Alaska Pipeline.
The measure breaks down stakeholder sharing by providing Alaska with 37.5% of the federal bonus bids and royalty share from any energy development, fossil or renewable. Of that 37.5%:
• 25% is directed to local governments;
• 25% is directed to Alaska Native village and regional corporations;
• 10% is directed tribal governments;
• 40% goes to the State of Alaska.
The bill also dictates that:
• 15% of the federal share of royalties is directed to the Land and Water Conservation Fund
• 7.5% of the federal share is dedicated directly to deficit reduction.
Press Release, February 5, 2013