Alaska: New Analysis Shows Current Oil Tax System Shortchanges Alaskans - Yesterday, Representative Les Gara (D-Anchorage) released an analysis of Alaska’s current oil tax system by the Alaska Department of Revenue’s Tax Division. The analysis shows that Alaskans are being vastly shortchanged by the current oil tax system.

“We can’t fund education, roads, and basic services when all new oilfields pay a 0% production tax,” said House Finance Committee member Rep. Gara. “Some walking the halls in Juneau appear to want seniors, the poor, and working class Alaskans to shoulder the greatest burden in solving our budget challenges. A fair plan should be fair to all, not just the wealthiest among us.”

Rep. Gara supports a comprehensive plan to fill Alaska’s roughly $4 billion budget gap and believes fixing Alaska’s flawed oil tax structure should be part that plan.

“Fairness requires the wealthiest corporations in the state to also pay a fair share towards solving our fiscal gap, especially when oil prices rise again,” said Rep. Gara. “A 0% oil tax is a pathway to poverty for Alaska. It will result in unsafe roads, under-educated children, and the inability to build needed energy and other projects.”

The analysis requested by Rep. Gara shows oil companies will contribute little in the form of production taxes to the State of Alaska up to $100/barrel. All oil fields developed after 2002, and all future oil fields, will pay a 0% production tax at prices up to $70/barrel. That includes any oil fields developed in ANWR, ExxonMobil’s Point Thomson Field, and all fields in the National Petroleum Reserve. All of the pre-2003 oil fields, including Prudhoe Bay, Kuparuk, and Alpine pay a minimal 4% tax all the way up to roughly $75 a barrel.

The new analysis made public by Rep. Gara outlines other problems with Alaska’s oil tax structure, including the ability for the oil companies to deduct 35% of their expenses, including big executive salaries, from their taxable income. The 35% deduction is allowed for all post-2002 oil fields despite the fact that Alaska collects almost no oil production taxes on those fields. The deduction also applies to the older oil fields at all oil prices above where the 4% minimum tax is in effect. - More...
Friday AM - February 19, 2016

Southeast Alaska: The Value of Alaska's Marine Highway in 25 Stories - From Akutan to Ketchikan, Alaskans are sharing their personal stories in a new publication about what the Alaska Marine Highway means to those who rely on it.

“The Value of Alaska’s Marine Highway in 25 Stories” was recently published by five of the state’s regional development organizations in order to show how AMHS impacts residents in communities big and small.

“It’s a compelling narrative,” said Shelly Wright, executive director of Southeast Conference. “There has been so much talk about the bottom line when it comes to marine highways. This publication speaks to the value of the ferry system in a personal way, community by community. To me, this publication lets people understand that the marine highway, whether they know it or not, touches every single person in Southeast Alaska. These Alaskans’ stories weave together to form a single tale: Transportation is the lifeblood of coastal communities, and a strong ferry system is essential to local economic development, quality of life, and community well- being.”

AMHS serves as an economic engine for the 35 coastal communities that it provides service to in Alaska. Each year, it ferries more than 300,000 people, generating thousands of jobs and hundreds of millions of dollars in commerce across Alaska. Since the extent of these impacts has never been fully measured, Alaskans who benefit from the state’s ferry system were asked to describe its value. The stories shared came from mayors, tribal leaders, business owners, tourism directors, fishermen, economic development experts and other community leaders.

“Angoon has no road connection, no barge service and no runway,” says former Angoon Mayor Maxine Thompson in the publication. “... It is the lifeblood of the villages.”

“The Lituya is our direct line to Ketchikan in any weather. It gives us access to the hospital. It can be life and death in terms of medical travel. A box of Cheerios here costs $9. To make their dollars stretch further, a lot of people go grocery shopping in Ketchikan because the prices are a lot better there. The Lituya plays a huge economic role between Ketchikan and Metlakatla. Ketchikan’s economy is infused with dollars from Metlakatla. And Metlakatlans enjoy the savings they get in Ketchikan. The Alaska Marine Highway is our highway. It’s our trade route.” Gavin Hudson, Tribal Council Member Metlakatla commented in the publication. - More...
Friday AM - February 19, 2016

Alaska: Scientists Establish Baseline to Gauge How Alaska Communities Will Respond to Change - In a new study by NOAA Fisheries, scientists looked at 347 Alaska communities to assess their dependence on marine resources and socio-economic well-being. This is the first time that NOAA Fisheries has used “quantitative” indicators for this type of assessment in Alaska. Scientists hope to provide marine resource managers with a scientifically sound rapid assessment of community resiliency over time.

A small boat harbor in Dutch Harbor, Alaska.
Courtesy NOAA Fisheries

“In many places throughout Alaska, reliance on marine resources is central to the way people live. Over 90 percent of Alaska’s rural residents rely on wild-caught food for part if not all of the year,” said Doug DeMaster, Director, Alaska Fisheries Science Center.

“We need to carefully consider how changes affect these communities. These changes can be regulatory. They can include national and international forces such as recessions, fuel prices and monetary exchange rates. They can result from environmental factors like shifts in fish stock abundance or environmental disasters. We also need to better understand how well these communities can adapt to these changes,” he said.

In general, the communities with the lowest socioeconomic well-being are found in western Alaska, where few economic opportunities exist. On the other hand, the majority of communities with the highest fisheries involvement indices are located in southcentral and southeast Alaska. Here, local residents are heavily involved in commercial, recreational and/or subsistence harvesting or processing.- More...
Friday AM - February 19, 2016

Fish Factor: Early signs point to no big price boosts for Alaska salmon By LAINE WELCH - Early signs point to continuing headwinds in world markets for Alaska salmon.

Global currencies remain in disarray, the ongoing Russian seafood embargo is diverting more farmed salmon to the U.S., and tons of product remains in freezers from back to back bumper sockeye runs. (The majority of Alaska’s salmon goes to market in frozen, headed and gutted (H&G) form.)

One plus: aggressive market promotions have kept reds moving briskly at retail outlets at home and abroad and removed some of the back log.

“What the Alaska industry really needs is to move that product through the supply chain – clear the decks - so we are not continuing to deal with that overhang in the following year. Whether we are there yet or not, is hard to say,” said Andy Wink, a Fisheries Economist with the Juneau-based McDowell Group.

“When the supply increases as much as it has over the last few years, especially from Bristol Bay, it has a big impact on what the distributors, secondary wholesalers and retailers are willing to pay to processors who are buying from the fishermen,” he said.

And in the case of salmon, size does matter. In the past two years at Bristol Bay, most of the fish have been on the smaller, two to four pound size, meaning they are worth dramatically less than larger fish. Luckily, sales of smaller sockeyes to Japan have moved well, primarily because of the lower prices, and their use of cut up fish in various dishes makes it less of an issue.

“We have seen good sales volume through the supply chain in the past year,” Wink said, adding that Alaska sellers were surprised at the amounts that went to Japan and Europe, due to the global currency situation. The continued strong value of the dollar means it is more expensive for overseas customers to buy U.S. seafood.

“We’ve seen things move a lot faster, and while the currency situation is still terrible, at least it’s been terrible now for a while,” he added. “People are more adjusted and markets have a better grip on where it’s at. Hopefully, they can figure out what everyone needs to operate at these currency levels.” - More...
Friday AM - February 19, 2016