They get it, we don’t

As throughput in the trans-Alaska oil pipeline continues to decline, the state of North Dakota is booming from a surge in oil production from the Bakken shale formation - producing 80 million barrels of oil last year.

Using horizontal drilling techniques to extract oil from the Bakken formation, North Dakota has leapt ahead of Oklahoma and Louisiana to become the fourth-largest oil producing state in the country. If current projections hold, North Dakota’s oil production could pass Alaska’s by the end of the decade, the Wall Street Journal reports.

As the national economic downturn has begun to affect Alaska and unemployment has steadily risen, North Dakota’s unemployment rate is 4.3 percent. North Dakota has kept oil taxes low and exploration has boomed even though recovery costs are considerably higher for the oil trapped in the state’s shale formation.

Looking at North Dakota’s example, it is clear that increased oil production spurs economic development and creates more job, yet our state legislators have stuck their proverbial heads in the sand, keeping oil taxes high and killing oil exploration. For 2010, ConocoPhillips will not be drilling an exploratory well in Alaska for the first time in 45 years.

Alaska lawmakers must reconsider the state’s entire oil tax structure, which was ratcheted up in 2007 by then-Gov. Sarah Palin’s Alaska’s Clear and Equitable Share oil tax, if they want the state to be competitive against other oil provinces.

Comments (1)