The Alaska Oil and Gas Association is optimistic about the industry’s future in the state. That was a theme of an update the trade group gave during a luncheon at the Kenai Chamber of Commerce and Visitor Center last week. The presentation came on the heels of a meeting with member companies, including several Cook Inlet developers.
Kara Moriarty is the association’s president and chief executive officer. She said oil and gas production is up from where it was expected to be at this time ten years ago.
“Our production last year ended up 488,000 barrels a day,” she said. “That is 160,000 barrels a day, more than the forecast in 2013.”
She says those numbers are good for the industry, but also for Alaska’s economy. That’s because more production by developers means more money contributed to the principle of the Alaska Permanent Fund.
In 2022, for example, Moriarty said the industry paid more than $4.5 billion in state and local taxes. That includes more than $15 million in property taxes on the Kenai Peninsula, representing about a fifth of the borough’s total property tax base. She said almost 70,000 jobs in Alaska are supported directly, or indirectly, by the oil and gas industry.
“Our industry continues to be a significant source of jobs throughout the state,” she said. “We do have the highest economic impact. … No other industry has that level of economic generation than we do, and we're clearly part of Alaska's future.”
Moriarty also offered industry reflections on the most recent session of the Alaska Legislature, where concerns over a looming shortage of natural gas in Cook Inlet fueled ardent debates over the best path forward. State lawmakers considered a trove of bills to address the problem, but not all of them crossed the finish line.
After the session ended, Moriarty said the industry was two for three on its priorities for Cook Inlet. She first celebrated a new state loan structure under which companies can get loans specifically to develop their proven oil and gas reserves. Next was legislation that allows private oil and gas companies to store natural gas.
What the industry didn’t get last session is royalty relief for oil and gas developers. Proponents of the measure say it would incentivize new development by companies in Cook Inlet by freeing up working capital they’d otherwise spend on royalties.
“So doesn't mean we're giving up,” she said. “It just means we've got more work to do to make sure that we are creating the atmosphere that we need an attractive investment climate to make sure that both legacy companies and that everyone here can be successful, both in the short term and the long term.”
Moriarty said other industry threats include general opposition to pipeline development in the U.S. and federal efforts to limit development in Alaska. That’s on top of a recent petition out of Washington to put Gulf of Alaska king salmon on the federal endangered species list. Moriarty said that move has implications beyond her industry.
“In my view, that would have a negative impact on every industry that's part of the Cook Inlet, both oil and gas, both commercial fishing, both sport fishing, tourism,” she said. “The mitigation measures that could be in place if the king salmon were listed as endangered could be incredibly far-reaching.”
Moriarty’s presentation highlighted just some aspects of a report studying the role of the oil and gas industry’s impact on the state economy. The report was published last year and can be accessed on the Alaska Oil and Gas Association website at aoga.org.
