A new tax structure is set for the gas and oil production in Alaska starting in 2010. This change in taxes has been proposed to assist the state in gaining enough revenue from a large diameter natural gas pipeline before space starts being sold for the proposed pipeline, and also to help stabilize the industry, thus giving more job security in Alaska. The decoupling process will make sure that the gas industry and the oil industry are separately taxed making companies more willing to bid for places during the so called “open season” by the Alaska Gas Inducement Act (AGIA). The goal is to encourage predictability in the industry and improve production and development. One of the concessions made through AGIA is to commit to a tax structure for the 10 years following the open season.
The reason for relooking at the tax infrastructure is because due to the high prices that oils are receiving, the taxes placed upon producers are not conducive for the lower priced gas industry. With companies that produce both oil and gas, the taxes are diluting the revenue that the state and companies receive. The decoupling is expected to encourage companies to keep producing both oil and gas, with the incentive of a higher revenue at the end of the day. It is also hoped that more companies that have only produced oil, will look into natural gas production as well once the taxes are lowered for gas. This enhancement of the industry is good news for those wanting to get jobs in the gas and oil industry. For current job openings in Alaska, you can browse the job board at Oil Job Finder.
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